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On February 4, 1887, both the Senate and House passed the Interstate Commerce Act, which applied the Constitution’s “Commerce Clause”—granting Congress the power “to Regulate Commerce with foreign Nations, and among the several States”—to regulating railroad rates. Small businesses and farmers were protesting that the railroads charged them higher rates than larger corporations, and that the railroads were also setting higher rates for short hauls than for long-distance hauls. Although the railroads claimed economic justification for policies that favored big businesses, small shippers insisted that the railroads were gouging them.
It took years for Congress to respond to these protests, due to members’ reluctance to have the government interfere in any way with corporate policies. In 1874 legislation was introduced calling for a federal railroad commission. The bill passed the House, but not the Senate. When Congress failed to act, some states adopted their own railroad regulations. Those laws were struck down in 1886, when the Supreme Court ruled in Wabash v. Illinois that the state of Illinois could not restrict the rates that the Wabash Railroad was charging because its freight traffic moved between the states, and only the federal government could regulate interstate commerce. Continued public anger over unfair railroad rates prompted Illinois senator Shelby M. Cullom to hold the hearings that led to the enactment of the Interstate Commerce Act.
That law limited railroads to rates that were “reasonable and just,” forbade rebates to high-volume users, and made it illegal to charge higher rates for shorter hauls. To hear evidence and render decisions on individual cases, the act created the Interstate Commerce Commission. This was the first federal independent regulatory commission, and it served as a model for others that would follow, from the Federal Trade Commission to the Securities and Exchange Commission and the Consumer Product Safety Commission.
Evolving technology eventually made the purpose of the ICC obsolete, and in 1995 Congress abolished the commission, transferring its remaining functions to the Surface Transportation Board. But while the ICC has come and gone, its creation marked a significant turning point in federal policy. Before 1887, Congress had applied the Commerce Clause only on a limited basis, usually to remove barriers that the states tried to impose on interstate trade. The Interstate Commerce Act showed that Congress could apply the Commerce Clause more expansively to national issues if they involved commerce across state lines. After 1887, the national economy grew much more integrated, making almost all commerce interstate and international. The nation rather than the Constitution had changed. That development turned the Commerce Clause into a powerful legislative tool for addressing national problems.
From Ballotpedia
The Sherman Antitrust Act is a federal law passed in 1890 that banned trusts and monopolies in industry, authorizing the federal government to dissolve trusts and break up monopolies as part of its power to regulate interstate commerce. It was the first modern American antitrust law and laid the foundation for Presidents Theodore Roosevelt and William Howard Taft's attempts to break up large industrial trusts.[1]
Background
The Sherman Antitrust Act was signed into law by President Benjamin Harrison in 1890. It was sponsored by Senator John Sherman of Ohio and came in response to public concerns over the increasing prevalence of trusts and their power to artificially increase prices and discourage competition.[2]
Provisions
Ban on Trusts
Section 1 of the act banned all industrial trusts.
“ | Every contract, combination in the form of trust or other- wise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.[1][3] | ” |
Section 2 contained a similar ban on monopolies, specifically ones that did not occur naturally and were instead the result of anti-competitive practices.
“ | Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor...[1][3] | ” |
Enforcement
Like the Interstate Commerce Act of 1887, the Sherman Antitrust Act relied on the federal circuit courts for its enforcement. If a violation occurred, a federal district attorney could initiate proceedings in equity, which could result in a temporary restraining order, an injunction, or the dismantling of a trust.[1]
Section 6 of the act held that any property held by a trust or organization that violated Section 1 could be seized by the federal government after forfeiture proceedings.[1]
Section 7 gave standing to sue for damages in a circuit court to any person or corporation injured in their "business or property" by any entity that violated Section 1.[1]
Amending statutes
Below is a partial list of subsequent laws that amended provisions of the Sherman Antitrust Act:
- Clayton Antitrust Act of 1914 expanded on the Sherman Antitrust Act and added new provisions and enforcement schemes.[4]
See also
- Clayton Antitrust Act
- Interstate Commerce Act
- Gibbons v. Ogden
- Wickard v. Filburn
- A.L.A. Schechter Poultry Corp. v. United States
- United States v. Lopez
External links
- Full text of the act
- Search Google News for this topic
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 OurDocuments.gov, "Sherman Anti-Trust Act (1890)," accessed January 2, 2018
- ↑ OurDocuments.gov, "Sherman Anti-Trust Act (1890)," accessed January 2, 2018
- ↑ 3.0 3.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ History.House.gov, "The Clayton Antitrust Act," accessed January 2, 2018
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