The Sherman act was passed by Congress in 1890. It was entitled "An Act to Protect Trade and Commerce against Unlawful Restraints and Monopolies." Since its passage various cases falling under it have been decided, but until the decisions in the Standard Oil Company and the American Tobacco Company cases the extent and intent of this act have not been understood. In the Standard Oil case the question involved was this: Was the Sherman act violated by the existence and conduct of this corporation, which owned or controlled some eighty corporations originally in competition? The control had been acquired for the purpose of monopolizing the sale and distribution of petroleum products in the United States, and had been acquired by various means of combination with the intent either by fair or unfair methods "to drive others from the field and to exclude them from their right to trade." The proof was that, to destroy competitors, prices had been temporarily reduced in various localities, spies had been used on competitors' business, bogus independent companies operated, and rebates given and taken. In the case of the American Tobacco Company, there were more than one hundred formerly competing companies united under the control of a single organization and the market in nearly all tobacco products was monopolized. This domination was secured "by methods devised in order to monopolize the trade by driving competitors out of business." In each case the court found the defendants guilty on the grounds that the agreements and the conduct of the defendants indicated a purpose to destroy competitors and monopolize trade in certain articles. The desired result was accomplished by wrongful means which injured the public as well as the competitors. The facts in neither case required the consideration of the question as to whether the Sherman act prohibited every unification of formerly competing properties and every restraint of trade, reasonable or unreasonable but, owing to the uncertainty of the public concerning the meaning of the law, the court stated definitely the meaning and scope of the act. From appearances the Supreme Court has practically amended the Sherman act by limiting its application to "unreasonable" restraints of trade. The significance of the decisions lies here rather than in the fact that both companies were compelled to dissolve. The best legal authorities believe that the new interpretation of "reasonableness" and "unreasonableness" of restraint of trade has increased rather than decreased the effectiveness of the law, inasmuch as the meaning has always been obscure. The new policy is a notification to combinations of capital that to exist without prosecution they must not resort to any unfair, oppressive, or illegal methods to control competition or crush competitors. CHAPTER XIII PRESIDENT ROOSEVELT'S SECOND TERM--CONTINUED [1907]