Monopolies and trusts have always been a part of American history and business, but never so much as in late 19th and early 20th century. The situation has gotten so bad that 40 percent of industrial capital in the country was controlled by 100 largest corporations. Some sectors were even worse than that. For instance, American Sugar Refining Company had 98% of American market under its thumb. This was something Teddy Roosevelt meant to exterminate.
Although trust busting is mostly accredited to him, in truth, there were anti-trust laws in place long before Roosevelt became the President. The most notable was Sherman Antitrust Act, passed in 1890, but rarely used. Another piece of legislation President Roosevelt planned to utilize in his fight against trusts was Interstate Commerce Act of 1887, aimed at preventing monopolies in railroads, but failing in its goal. Railroads were the first targets of Roosevelt’s administration. In 1901 a lawsuit was filed against Northern Securities Company, a holding corporation owned by J.P. Morgan, James J. Hill, and E.H. Harriman. This was the start of a long-lasting hostility between Morgan and Roosevelt. Immediately after, Beef Trust was also subjected to a lawsuit. Parallel with this case, Roosevelt also created various bodies within the government which made it possible to better bust trusts. Some of these new institutions include Bureau of Corporations, Department of Commerce and Labor, and Antitrust Division within the Department of Justice.
By 1904, both Northern Securities Company and the Beef Trust were dissolved by the orders of the courts. Roosevelt’s firm stance on trust busting helped him secure his second term in the White House and this time he went even harder against “bad trust,” which in his opinion only served their owners and not the public at large. Answering to the public requests for more regulation on railroad rebates, Roosevelt increased the powers of the Interstate Commerce Commission. In 1906, he managed to push through Hepburn Act, which further regulated railroads, despite the strong opposition in Senate by conservative senators, backed by business interests.
After railroads, Roosevelt turned to the food industry. Breaking up the Beef Trust was just a first step. The Meat Inspection Act and Pure Food and Drug Act, both passed in 1906, introduced food labeling and sanitary inspections in the food industry.
Not all trust busting activities were successful, though. Roosevelt efforts to strengthen Sherman Act and establish National Bureau of Insurance to reduce insurance frauds and regulate the market failed in Congress. He did manage to initiate a lawsuit against Standard Oil in 1906, which led to company’s dissolution five years later.