1.3.1 Study: Limits on Big Business

Progressives feared the significant influence of powerful trusts on government officials.
Although local leaders addressed some issues, many required national intervention.
Major corporations like U.S. Steel and Standard Oil dominated the economy, extending nationwide.
Goals of Progressives included:
- Breaking up trusts.
- Establishing laws to regulate business practices.

In the early 1900s, the term "trusts" referred primarily to monopolies.
Monopolies are companies that dominate an industry to the extent that competition is virtually eliminated.

Standard Oil was an influential giant in both the U.S. and the global market, founded by John D. Rockefeller.
Rockefeller was known for driving smaller companies out of business, creating a monopoly that allowed for price manipulation.
The belief was widespread among Progressives that only government intervention could curtail companies like Standard Oil.

Ida Tarbell, a significant journalist and muckraker, began her investigation into Standard Oil in 1900.
Her motivation stemmed from the financial ruin caused to her father's small oil business by Rockefeller's monopoly.
Tarbell’s investigative work included:
- Document analysis.
- Interviews.
- Publication of findings in 19 articles in McClure's Magazine and later in her book "The History of the Standard Oil Company" (1904).
Impact of Tarbell's work:
- Generated public outrage against Rockefeller and his practices.
- Drove demand for reform and contributed to the election of Progressive politicians.

The Interstate Commerce Act (1887) was established in response to complaints from farmers and small businesses about railroad companies.
Railroads were accused of:
- Collaborating to fix high prices.
- Charging higher prices for short distances compared to long distances.
- Offering preferential rates to large corporations in exchange for illegal payments.
Provisions of the Interstate Commerce Act:
- Required railroad companies to charge fair rates.
- Established the Interstate Commerce Commission (ICC) to oversee railroad regulation.

John Sherman was the primary author of the Sherman Antitrust Act.
This act aimed to regulate companies to prevent monopolistic practices.
Legal vs. Illegal Trusts:
- Legal: A successful acquisition of another company for expansion.
- Illegal: Using stock to control companies solely to eliminate competition.
Difficulty in enforcement:
- Proving the legality or illegality of trusts became a challenge, leading to minimal enforcement in the first decade following its enactment.

Elected in 1897, promising to support business growth while showing some inclination to reform.
McKinley's presidency was cut short by assassination on September 6, 1901, which interrupted his potential impact on Progressive reforms.

Theodore Roosevelt assumed the presidency at a young age following McKinley's assassination.
Roosevelt's Background:
- Came from wealth, overcame health challenges as a child.
- Developed an energetic personality, often associated with outdoor activities and vigorous exercise.

Roosevelt championed the "Square Deal," focusing on fairness for both workers and business owners.
Significant Achievements:
- Used the Sherman Antitrust Act to dismantle monopolies in various sectors including oil, steel, and railroads.
- Intervened in labor disputes, promoting fair treatment.
Quotation from Roosevelt: "We draw the line against misconduct, not against wealth."

Roosevelt became popularly known as a "trustbuster" through actions against powerful monopolies.
The Roosevelt Administration sued 45 different companies for antitrust violations.

Roosevelt endorsed William Taft to succeed him, anticipating Taft would continue his Progressive policies.
Taft, however, had less enthusiasm for active reform and failed to maintain Roosevelt's popularity.

Roosevelt aimed to regain the presidency, feeling Taft was ineffective and unsatisfactory.
Four candidates ran:
- William Howard Taft (Republican): Saw dwindling support due to failure to please reformers and business leaders.
- Theodore Roosevelt (Progressive/Bull Moose Party): Ran on a fervent Progressive platform emphasizing business regulation and worker support.
- Woodrow Wilson (Democrat): Positioned himself as a moderate reformer benefiting from a divided Republican vote; platform known as the New Freedom.
- Eugene Debs (Socialist): Aimed at raising consciousness around Socialism, despite limited chances of winning.

Wilson won the presidency despite only securing 42% of the popular vote, largely due to the divided Republican electorate.
Roosevelt's Progressives and Wilson both advocated for reform but differed in approach to government regulation.
Debs achieved an impressive 6% of the popular vote for a Socialist candidate.

Upon taking office in 1913, Wilson enacted various reforms, focusing on trust-busting without distinguishing between "good" and "bad" trusts.
Clayton Antitrust Act of 1914:
- More detailed legislation that specified prohibited corporate actions and aimed to prevent monopolies from forming.

The establishment of the Federal Reserve aimed to stabilize the U.S. economy by providing a federal banking solution.
Created emergency lending capabilities for private banks and designating monetary policy.
Adjustments were made to placate progressive concerns regarding private banker control over the Federal Reserve.
Since its inception, the Federal Reserve has contributed to economic stability.