American Progressive Movement: Trust Busting

trust busting
Figure 1.--In this 1902 issue of "Puck", a matronly President Roosevelt gives a thorough scrubbing to a shady financer in his role as trust buster. 'Puck' was the most notavle American political magaine in the late-19th and early 20th century." Many of the greatest American political cartoons appeared on its front cover.

The industrial expansion of the United Staates began in earnest after the Civil War (1861-65). Gradually a number of industrials managed to establish monopolies or near-monoplies in key industries: chemicals (Dupont), finance (Morgan), oil (Rockefeller), railroads (Gould and Vanderbilt), steel (Carnegie), tobacco (Duke), and several others. These monopolies became known as trusts in the United states. At the time there was virtually no legislation limiting take overs and mobopolies. Once established, these monopolies could set prices and dominate their industry. These industrialists were more influential than the Government. And by the late 19th century, the American economy was the most productive and powerful in the world. The Progressive Movement a it developed took on the trusts, The one that was most powerful was the railroads. The railroad industry was not as monoploized as oil and steel, but in local areas, the large rail roads could set prices and farmers and small companies had no bargaining power. Ironically many of the other trusts actually lowered prices. The legislative basis for action against the trusts was the Sherman Antitrust Act (1890). It was Republican presidents who launched upon trust busting. President William McKinley appointed the U.S. Industrial Commission on Trusts which actually interrogated steel magnate Andrew Carnegie. The Commission's report was acted upon by Roosevelt soon after he became president (1901). Roosevelt used the Sherman Anti-Trust Act to break up a large railroad conglomerate--the Northern Securities Company. He continued this effort during his two terms with legal action against 43 other important corporations. As a result, he became known as a "Trust Buster". President Roosevelt who is most associated with trust busting. Actually it was his chosen successor, William Howard Taft, who is often criticized for back tracking on the Roosevelt reforms whose administration initiated the most actions against the trusts. Legal actions during his single term broke up 90 trusts in one term. The process was continued during the Wilson Administration, although by this time the largest trusts had already been disolved. The Clayton Antitrust Act (1914) gave the Federal Government even greater authority to act against the trusts.

American Industrial Expansion

The industrial expansion of the United Staates began in earnest after the Civil War (1861-65).

The Trusts

Gradually a number of industrials and groups of financeers managed to establish monopolies or near-monoplies in key industries: chemicals (Dupont), finance (Morgan), oil (Rockefeller), railroads (Gould and Vanderbilt), steel (Carnegie), tobacco (Duke), and several others. These monopolies became known as trusts in the United states. They were giant holding compnies. At the time there was virtually no legislation limiting take overs and mobopolies. Once established, these monopolies could set prices, squash competitin, and dominate their industry. Not oinly were their no laws prevented this, but government interference in business at the time was considered not only unconstitutional, but imoral. In this atmosphere indistrialists steadily built vast monopolies.

Progressive Involvement

These industrialists were more influential than the Government. And by the late 19th century, the American economy was the most productive and powerful in the world. The Progressive Movement a it developed took on the trusts, The one that was most powerful was the railroads. The railroad industry was not as monoploized as oil and steel, but in local areas, the large rail roads could set prices and farmers and small companies had no bargaining power. Ironically many of the other trusts actually lowered prices.

Sherman Anti-Trust Act (1890)

The legislative basis for action against the trusts was the Sherman Antitrust Act (1890). It wss, however, at first little used.

Ptesident McKinnely (1897-1901)

It was Republican presidents who launched upon trust busting. President William McKinley appointed the U.S. Industrial Commission on Trusts which actually interrogated steel magnate Andrew Carnegie.

President Roosevelt (1901-09)

President McKinnely's assasination was a huge shock to the country's conservative Republican establishment (1901). Party leaders like Mark Hanna had maneuvered to get him out of the New York governship where he was causing problems. The vice-presidency was seen as a political graveyard. The new president sent a message to Hanna, "I shall go slow." Tt was not, however, in his character, he impetus he had shown for reform as Governor of New York was too strong. The U.S. Industrial Commission on Trusts shocked many Americans and President Roosevelt decided to act on it (1902). Roosevelt used the Sherman Anti-Trust Act to take on a large railroad conglomerate--the Northern Securities Company. The Norther Trust had suceeded in largely dominating rail oads between Chicago and Seattle including most of the Mid-West. THis involved taking on not only railroad tycoons (James J. Hill and E.H. Harriman, but also oil man John D. Rockefellera mf finamceer J. Pierpont Morgan. These man wre not used to government interference and public criticism. Morgan rushed to Washington to meet with the President. He told him, "If we have done anything wrong, snd your man to my man and they can fix it up." Rooseveklt relied, "THat can't be done." Subsequently, Attorney General Philander C Knox, tld Morgan, "We don't want to fix it up, we want toi stop it." After breaking up Northern Trust, he launched a series of actions agains many of the largest trusts in Amrica. President Roosevelt continued this effort during his two terms with legal action against 43 other important corporations (American Tobacco, the Chicago Meat Packets, Dupont, and Standard Oil. He won every case brought. The way in several instances had been paved by mucjkraking journalists. The President referred to the industrialists and financeers who created the trusts as "malefactors of great wealth". Many of these mens were individuals who played a key role in building America as a great industrial powerhouse. President Roosevelt became known as a "Trust Buster" andis the president most associated with trust busting.

President Taft (1909-13)

Actually it was President Roosevelt's chosen successor, William Howard Taft, who is often criticized for back tracking on the Roosevelt reforms whose administration initiated the most actions against the trusts. Legal actions during his single term broke up 90 trusts in one term.

President Wilson (1913-21)

The process was continued during the Wilson Administration, although by this time the largest trusts had already been disolved. The Clayton Antitrust Act (1914) gave the Federal Government even greater authority to act against the trusts.





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Created: 3:41 AM 1/16/2009
Last updated: 3:41 AM 1/16/2009