Standard Oil Co. of New Jersey v. US, 221 US 1 (1911)
Answer
In 1911, the US Supreme Court used a novel interpretation of "restraint of trade" to rule Standard Oil Company of New Jersey held a monopoly on gasoline production and distribution, and was in violation of the Sherman Antitrust Act. In order to resolve what the Court considered unfair trade practices, they ordered the Standard Oil be divided into 34 independent companies with different boards of directors. Some of the more familiar petroleum company names originally part of Standard Oil are Esso, Mobile, (now Exxon/Mobile), Amoco, Sinclair, Standard, Chevron, and a host of small regional companies bearing the original Standard Oil name (e.g., Standard Oil of New Jersey, Standard Oil Company of New York, aka Socony). They also split off 24 non-gasoline petroleum enterprises.
Explanation
At the turn of the 20th century, Standard Oil was the largest oil producer in the United States, at one time responsible for 91% of production and 85% of final sales (1904). The Commissioner of Corporations, associated with the US Department of Commerce, investigated the company and concluded that Standard Oil was guilty monopolistic practices, identifying four major violations of the Sherman Antitrust Law:
The government also believed Standard guilty of using its dominant position in the petroleum industry to drive competitors and refinery- or distributor-customers out of business by raising prices to industry customers, while reducing them to consumers.
The US Department of Justice filed suit against Standard in 1909; Standard prevailed in the District Court, but the Circuit Court reversed, and Standard Oil appealed that ruling to the US Supreme Court in 1911. By that time, Standard's market share had dropped to 64%, and it was no longer engaging in some of the more egregious business practices the Department of Commerce identified; however, it was still the largest petroleum company in the United States.
The Justice Department charged Standard and its subsidiaries with conspiracy "to restrain the trade and commerce in petroleum, commonly called 'crude oil,' in refined oil, and in the other products of petroleum, among the several States and Territories of the United States and the District of Columbia and with foreign nations, and to monopolize the said commerce" over a 40-year period.
More specifically: "[D]uring said first period, the said individual defendants, in connection with the Standard Oil Company of Ohio, purchased and obtained interests through stock ownership and otherwise in, and entered into agreements with, various persons, firms, corporations, and limited partnerships engaged in purchasing, shipping, refining, and selling petroleum and its products among the various States for the purpose of fixing the price of crude and refined oil and the products thereof, limiting the production thereof, and controlling the transportation therein, and thereby restraining trade and commerce among the several States, and monopolizing the said commerce."
The Supreme Court, in affirming the decision of the lower appellate court, held that Standard Oil was guilty of restraint of trade, creating unfair market conditions and eliminating the competition's "freedom to contract." According to the Court, monopolies "unduly" result in at least one of the following: higher prices, reduced output, or reduced quality.
Standard Oil was ordered to dissolve the present corporation and restructure its holdings into 34 separate businesses, each with an different board of directors. While the Supreme Court affirmed this part of the order, it found several other provisions overbroad or unreasonable, extended the time frame for action from 30 days to six months, and overturned a provision that prevented Standard from engaging in interstate commerce as injurious to the public.
sherman antitrust act
President Roosevelt reacted to the creation of the Northern Securities Company by suing them. He wanted the company to be dissolved and argued that it violated antitrust laws.
Northern Securities Company
Well, it was supposed to eliminate trusts, but it actually did not because it failed to define trust or restraint of trade.After the passage of the Sherman Anti-trust act in 1890, trusts like the Standard Oil Co. just reorganized the trust into an enormous holding company (owned a controlling share of the stock of one or more companies or firms---versus literally owning other businesses.)It did break up a few monopolies, but it really wasn't until 1914 with the passing of the Clayton Anti-trust Act and the creation of the Federal Trade Commission that anti-trust measures really made an impact on monopolies.
It dealt with property rights and economic policies. Ruled that the Northern Securities Company was formed only to eliminate the competition and ordered it to be dissolved.
sherman antitrust act
the Northern Securities because they alarmed the Americans and Roosevelt. The stock battle that led to its creation seemed a classic example of private interests acting in a way that threatened the nation as a whole. Roosevelt decided that the company was in violation of the Sherman Antitrust Act.
building codes requiring fire escapes.The tragedy of the Triangle Shirtwaist Company of 1911 drew attention of the need to address workplace safety issues and women's rights.
Theodore Roosevelt
The Sherman Anti-Trust Act regulated businesses that were deemed to be anticompetitive by creating a monopoly. Some companies affected by the Sherman Act were the Northern Securities Company, Standard Oil, and the American Tobacco Company.
The Sherman Anti-Trust actBecause it was designed to prevent the formation and operation of monopolies, the ShermanAnti-Trust Act of 1890 is the legislation that was most closely related to the work of Ida Tarbell. The History of the Standard Oil Company was credited with contributing to the breakup of Standard Oil, which came about when the Supreme Court of the United States found the company to be violating the Sherman Antitrust Act.
Rockefeller's business practices were controversial but, at the time, did not technically break any laws in place. However, his company, Standard Oil, was eventually found to be in violation of antitrust laws and was broken up by the Supreme Court in 1911.
The Sherman Antitrust Act of 1890 is a federal statute which prohibits activities that restrict interstate commerce and competition in the marketplace.
44 with the Sherman Antitrust Act Source: squaredeal.com
Yes, the railroad holding company's (Northern Securities Co) stock transactions were in restraint of interstate commerce,and came within guidelines of the Sherman Anti Trust Act. The Northern Securities Co vs The United States in which the Supreme Court found in favor of the government was a vindication of Roosevelt's actions. This case also rejuvenated the Sherman Anti Trust Act.- tuffy
The oil, and steel companies, were majorly monopolized during the gilded age, and n doing so created the sherman antitrust act.
Rockefeller and Standard Oil used tactics such as creating monopolies, undercutting competitors' prices, forming secret alliances, and engaging in predatory pricing to gain dominance in the oil industry. They also used aggressive litigation strategies to challenge and delay enforcement of antitrust laws. Ultimately, their actions led to the passage of antitrust legislation like the Sherman Antitrust Act in 1890 to regulate monopolistic practices.