Sherman Antitrust Act

As the United States experienced the rise of industry and big business at the turn of the twentieth century, trusts became a problem. A trust is a company comprised of several companies that have joined together to take control of a particular sector of business. Trusts have total control and operate without fear of competition.

The concept of trusts made it difficult at best for smaller businesses to grow and thrive. For years, however, nothing was done to strip trusts of their power, mainly because the wealthy big-business owners donated large sums of money to powerful politicians. It was a you-help-me, I'll-help-you sort of relationship that benefited both sides.

On July 2, 1890, U.S. Congress passed the Sherman Antitrust Act, which was named after U.S. senator John Sherman (1823–1900) of Ohio , who introduced it. The law declared it illegal to form monopolies and trusts (similar to trusts; one person or company is the sole seller of a specific good or service) both within the United States and when dealing with foreign trade.

At first the law was not strictly enforced because the maximum fine of just five thousand dollars and one year imprisonment was not enough to deter powerful businesspeople from breaking the law. But when Theodore Roosevelt (1858–1919; served 1901–9) became president, he enforced the Sherman Act with full force. So intent was he on bringing down trusts and leveling the playing field for all businesses that he became known as the “trust-busting” president.