American literature -- Periodicals; Literature -- Periodicals
In the first ten years after the passing of the Sherman Act, the
government attacked most successfully, not the great solidified
aggregations of capital popularly known as trusts, but the more or
less loosely organized federations of corporations, formed chiefly for
the purpose of regulating and establishing prices. Trade agreements,
not monopolistic corporations, became its chief quarry. In proscribing
these agreements as illegal, the Sherman Act was found to be extremely
effective. The very first case under this law was directed against a
combination of coal-mining companies in Kentucky and Tennessee, which
existed for the express purpose of regulating output and fixing prices.
The courts promptly decided that this agreement violated the Sherman
Act. In 1892 eighteen railroads, nearly all operating west of the
Missouri River, organized what they called the Trans-Missouri Freight
Association. This association included many of the great Western roads,
companies of the magnitude of the Santa Fé, the Missouri Pacific, and
the Rock Island. Its object, as clearly stated in the articles of
association, was "mutual protection by establishing and maintaining
reasonable rates, rules, and regulations, in all freight traffic, both
through and local." In other words, it proposed to fix arbitrarily
the price of transportation throughout the enormous territory covered
by the eighteen railroads in question. The old "pooling" agreements,
which had existed for many years, had been prohibited by the Interstate
Commerce Law passed in 1887; and this Traffic Association was an
attempt to accomplish the same end--that is, stop competition among the
railroads and maintain rates--in a different way. The Supreme Court,
by a vote of five to four, decided that this agreement was prohibited
by the Sherman Anti-trust Act, because, as an attempt to fix prices,
it restrained trade. The famous Trans-Missouri decision, which settled
this case, made the Sherman Law an insurmountable bulwark against all
railroad combinations of this kind. Until this decision was finally
given in 1897, this act had not been seriously regarded; after the
Supreme Court had spoken, however, capitalists suddenly awoke to its
significance. The decision settled many important points, which will be
referred to subsequently in this article, and it changed as well the
whole policy of railroad management.
Public-domain text, read in full here on John Shaqi.
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