Sherman Act

The Sherman Anti-Trust Act of 1890 became law while Theodore Roosevelt was serving on the U.S. Civil Service Commission, but it played a large and important role during his presidency.

When Theodore Roosevelt’s first administration sought to end business monopolies, it used the Sherman Anti-Trust Act as the tool to do so. Passed after a series of large corporate mergers during the 1880s, this Act enabled government departments and private individuals to use the court system to break up any organization or contract alleged to be in restraint of trade. The federal government used the Act to invalidate formal and informal arrangements by which different companies in the same industry set prices, though for the first decade of its existence the Act did little to slow the rate of business mergers.

This changed when, in 1902, President Roosevelt urged his Justice Department to dismantle the Northern Securities Corporation. This entity was a holding company, a combination of separate railroads administered by a Board of Trustees. At issue was its control of railroading in the northern tier of the United States from Chicago to the Pacific Northwest. After losing in the lower courts, Northern Security trustees appealed to the Supreme Court, which ruled 5-4 in March 1904 that the Northern Securities Corporation violated the Sherman Anti-Trust Act, the first major example of trust-busting during Roosevelt’s presidency.