Monopolies, Trusts and Antitrust Laws

As industries grew, a few giant firms came to dominate markets in oil, steel, railroads and sugar. Standard Oil used efficient refining, secret railroad rebates and aggressive price-cutting to buy or drive out rivals, and by around 1880 it controlled roughly 90 percent of American oil refining. Firms combined into 'trusts' and holding companies to coordinate prices and production.

Supporters argued that big business brought efficiency, lower prices and stability; critics argued that monopolies crushed competition, exploited consumers and corrupted politics. Investigative journalists, such as Ida Tarbell, whose history of Standard Oil appeared from 1902, exposed abuses. The Interstate Commerce Act of 1887 began regulating railroads, and the Sherman Antitrust Act of 1890 outlawed combinations that restrained trade. In 1911 the Supreme Court ordered Standard Oil broken up into 34 companies.

The debate over how big companies should be continues.