The Sherman Antitrust Law, adopted in the United States at the beginning of the 20th century, literally declared war on monopolies and large companies. In theory, it had a very promising future, but in practice it turned out to be ineffective. What was its essence and what are the reasons for the failure of its application, read in the article.
The beginning of the 20th century in the USA: the role of the state in the economy and social relations
America at the end of the 19th century. - early 20th century rapidly transformed into a country of classical corporate capitalism. Monopolies and gigantic trusts functioned without any restrictions. It is quite logical that they severely restricted the freedom of market competition and dictated to small and medium-sized businesses such conditions that led to its ruin. They couldn't compete. What is the giant owned by John Rockefeller called Standard Oil, which by the beginning of the 20th century captured the US oil market by 95%! The first act adopted for the purpose of protecting trade and commerce from monopoly andrestrictions, became Sherman's law. However, contrary to expectations, it did not become the so-called "industrial freedom charter" by the people.
Who is Sherman?
The initiator of the bill mentioned above was the well-known American politician John Sherman, whose name the act later received. The future member of the House of Representatives and Ohio State Senator, as well as the 35th Secretary of State and Secretary of the Treasury, was born on March 7, 1897 in Lancaster. His father worked as a judge, and the family was quite large and consisted of parents and 11 children. Sherman received his education in a regular school, then he became interested in law and, after training, was admitted to the bar.
After his marriage, he was attracted to politics. In 1854, at the age of 43, he was elected to the Ohio House of Representatives. In 1980, he made an attempt to take the post of president of the country, but lost to D. Garfield. His personality is very significant in the history of the country, but the rest of the world is most familiar with the Sherman Act, adopted in the United States. It belongs indirectly to the field of labor law and, meanwhile, has become a prerequisite for positive changes in this area of legislation.
The essence of the law
The Sherman Act was America's first antitrust law. Named after its initiator, it was approved by the Senate in April 1890 (51 votes to one), the House of Representatives (unanimously) and approved by President Harrison. The law came into force on July 2, 1890.
The text proclaimed it,that preventing free trade by creating trusts (monopolies), as well as colluding with these goals, is nothing but a crime. It should be noted that the Sherman Act was dormant for a decade until it was addressed by the twenty-sixth US President Theodore Roosevelt.
The act was not directed against trusts and monopolies as such. However, it concerned direct and explicit restrictions on free trade not only on a national scale (between individual states), but also internationally. D. Rockefeller and his company became the main target. So, in 1904, a series of antitrust suits were filed against Standard Oil. The Supreme Court decided to split the company. D. Rockefeller, having split Standard Oil into 34 subsidiaries, meanwhile, retained control over them.
What's wrong?
The Sherman Act, adopted in the United States, refers to the sphere of economics and partly social policy - areas that at that time required updating. Its effect was rather limited. Moreover, the act was very often applied not for its intended purpose. Arbitrary interpretation of the law by the judiciary has led to workers' unions being treated as monopolies and strikes as collusion to restrict free trade. In fact, the act passed for the people eventually turned against them. This loophole in the law was eliminated only in 1914 with the help of the Clayton Act. It is noteworthy that the Sherman Law in a certain partis valid in our time, it is included in the US Federal Code.
What happened next?
The long-awaited and first antitrust law did not bring the desired results. Social stratification in society continued to worsen, ordinary American citizens found themselves in a very distressed situation, there were all signs of an economic depression. All this naturally led to the growth of dissatisfaction with the growing corporate capital among the most diverse sections of the population: progressive intelligentsia, farmers, workers. The country is plunged into an antitrust movement, accompanied by an increase in trade union activity and the struggle of the poorest class for a system of state protection. Gradually, the demands for a "renewal" of social and economic policy swept the party leaders not only Democrats, but also Republicans. The first step towards solving the problem was the "Act for the Acceleration of Judicial Proceedings and the Resolution of Proceedings in Justice" (1903), followed by the adoption of a law establishing the Ministry of Trade and Labor.
Being ineffective in practice, it was the Sherman Act adopted in the USA that became the precondition for positive changes. What law does this normative act belong to, what is its content, where was one of the main mistakes - the answers to these questions are reflected in the article. The full text of the document is available both in the original language and in translation. It will be especially relevant for those who are interested in modern and recent US history.
