Trusts Monopolies Progressive Era Essay

Trust Busting: Theodore Roosevelt’s Effectiveness In Regulating Big Business

Before a series of antitrust acts and laws were instituted by the federal government, it was not illegal for businesses to use any means to eliminate competition in late nineteenth-century America. Production technology was now advanced to the point that supply would surpass product demand. As competition in any given market increased, more and more companies joined together in either trusts or holding companies to bring market dominance under their control (Cengage 2). As President Theodore Roosevelt was sworn into office in 1901, he led America into action with forceful government solutions (“Online” 1). Roosevelt effectively regulated offending business giants by the formation of the Department of Commerce and Labor, the Bureau of Corporations, and antitrust lawsuits.
Trusts were essentially agreements between businesses of any certain market to be anti-competitive in relation to one another. The problematic methods and techniques they used included rigorously lowering prices, “buying out competitors, forcing customers to sign long-term contracts, [and] forcing customers to buy unwanted products to receive other goods (“Sherman” 1). For example, financier J. P. Morgan captured the business opportunity presented by the Depression of 1893, which occurred for the same reason as the Depression of 1873—more goods had been produced than could be sold as a result of excessive expansion. Morgan acquired many railroads that had declared bankruptcy (“Domination” 2), as well as buying Andrew Carnegie’s Carnegie Steel in 1901 (Keesee 356).
To differentiate monopolies from trusts, it must be said that single companies were able to form monopolies when in control of “nearly all of one type of product or service… [This] affects the consumer by resulting in higher prices.” Examples of established monopolies in the late nineteenth century included the Northern Securities railroad transportation company, John Rockefeller’s Standard Oil Company (in the business of oil refinement), and Alexander Graham Bell’s Telephone Company. Some of the dishonorable measures taken by the interstate trusts and monopolies were product quality reduction, employee exploitation, and even putting ultimatums on necessary products (“Domination” 1). Such abuse of business combinations consisted of secrecy or misinterpretation in corporate organization, overcapitalisation, and of course, price manipulation (Johnson 572).
Roosevelt became president as a result of William McKinley’s assassination, but his policies were vastly different from those of McKinley (“Theodore” 1). McKinley had been in favor of maintaining the Republican laissez-faire "status quo", and seemed to favor big business (“Online” 1). Roosevelt’s bullish personality and brazen self-confidence was a substantial factor that strongly influenced both the development of governmental regulation of trusts and the supervision of corporations functioning across state lines. He believed that “industrial combination” was...

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Teddy Roosevelt in the Progressive Era Essay

1180 Words5 Pages

Teddy Roosevelt in the Progressive Era

Progressivism originated as the optimistic vision that society was capable of improvement, and that continued growth and advancement were the nation's destiny. This, however, would require direct, purposeful human intervention in social and economic affairs. Progressive reformers wished to limit the disperse authority and wealth by empowering the government to regulate or break up trusts at both state and national levels. They also believed in the importance of social cohesion. Individuals were not autonomous; rather they are each part of a great web of social relationships. Therefore they pushed for reforms to help women, children, industrial workers, immigrants, and even African Americans to…show more content…

Roosevelt acknowledged that consolidation produced dangerous abuses of power and urged for the regulation of monopolies and trusts. Early on in his presidency the Hepburn Act was passed. The Hepburn Act was an attempt to clean up the railroad issues by setting fair rates and demanding to see their accounting records. There were ways to get around the law, but it was a sincere attempt to help.
Roosevelt also went after the Northern Securities, a railroad holding company established by J.P. Morgan. Then, he went after Rockefeller's standard oil trust. By the time Roosevelt left office he had attacked twenty five different monopolies. He created the Department of Commerce and Labor to report on any illegal activities that businesses were participating in. This was truly progressive of him, in his attempt to help the little guy. From 1902 through 1908 a serried of laws were passed called the Conservation Laws. One of them, the Newlands Act, put an end to strip mining. This was very progressive because Roosevelt was the first person to actually come out and say we can't keep abusing our natural resources, because they won't last forever. (Document B) In his 1907 annual message to Congress Roosevelt said: "To waste, to destroy, our natural resources, to skin an exhaust the land instead of using it so as to increase its usefulness, will result in undermining

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