The Impact Of The Federal Trade Commission

To make the New World habitable the government needed large companies to carry out the large scale public works projects. To do that though the government had to give these companies exclusive contracts. With these contracts came a large outcry from the public to have the government check the price fixing abuses of these companies. To respond to the large outcry and the price fixing the government passed the Sherman Antitrust Act in 1890. This act was passed to ban trusts and monopolies that would lessen the interstate and international trade. Furthermore, the act gave the government the power to break these companies into smaller pieces to suit its own

As shown in Document A, reformers sought to break up large companies that controlled their area of competition, such as the Standard Oil monopoly on oil fields. However, the way at which they were picked was to organize them into good or bad trusts. The way this was done was at the control of the government, thus creating no set standards as to what company trusts to break up to create competition and which ones to keep. Despite the indecision, this was somewhat successful. As the Clayton Antitrust Act states (Document E), “... it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities which commodities are sold for use, consumption, or resale in the United States…”, meaning that women, and other minorities could buy the same items for the same price of others at any store in

It required that all prices must be reasonable and just, rates must be publically posted, outlawed all secret rebates and deals, and price discrimination against smaller companies was now made illegal. While the act promised many changes to reduce the domination of the railroad monopolies, it was not enforced as pro-railroad commissioners were appointed by most of the later presidents. The next act passed by congress in 1890 called Sherman Antitrust Act. The objective of the act was to ban trusts and other contracts that restrained free trade. Much like the Interstate Commerce it was not enforced at all. In fact it was used to help the railroad monopolies even more by regulating labor unions. The very pro-business Supreme Court would rule that strikes violated the prohibition against “a conspiracy in restraint of trade.” In the act. This was the opposite intent of the act, and would not be properly enforced until the early

The Federal Trade Commission(FTC) was created in 1914. It was created to ensure that there were no businesses that were anticompetitive; meaning that there wasn’t one company or business that was creating a monopoly. The FTC has three main goals; they are to protect consumers, maintain competition, and advance performance. They protect the consumers by preventing fraud and making sure businesses are fair in the marketplace. They maintain competition by preventing companies from merging together and creating a monopoly. Finally, they advance performance by advancing the FTC’s performance through organizational, personal, and management excellence. The FTC is very beneficial, and although not everybody knows about it, as a consumer it helps with the economy of every American. Throughout the years since it was created, there has been more laws added that help keep businesses

Finally is the allowance of these monopolies to rise in the first place. Since there were no regulatory agencies back in the second industrial revolution, big businessmen with the idea of trimming fat in their companies could conquer any competitor by using hardball tactics of purposely

During the building of the Transcontinental Railroad, the railroads themselves created a large market for the steel and iron industries.4 The steel and oil industries were booming and corruption was rampant. Andrew Carnegie had cornered the market in the steel industry and John D. Rockefeller had cornered the oil market. Rockefeller bought up his competition after essentially putting them out of business by flooding the market with refined oil bringing down prices and profits. He was determined to pay no one a profit because he wanted it all for himself. He created a plan called vertical integration which consolidated his businesses into one by creating The Standard Oil Trust.5 These two men became known as barons and got rich beyond belief. In 1890, the Government enacted the Sherman Anti-Trust Act to prevent large firms from controlling one single industry and finally put a stop to these monopolies and trusts, 6 but it was not rigorously enforced until the 1900’s. This act was designed to restore competition and

Roosevelt persuaded Congress to create a Bureau of Corporations to investigate and regulate big business, then brought an anti-trust suit against J.P. Morgan's Northern Securities Company, a railroad trust controlled by the Wall Street financier, with the United States Supreme Court upholding the closure of the trust in the case of Northern Securities Co. v. United States issued in 1904. During Roosevelt's Administration, over 40 major corporations were sued for antitrust or price-fixing violations. Roosevelt greatly expanded the powers of the government within the economy, often by endorsing new power for organized labor to organize and put forth leverage against employers. By supporting labor in the settlement of the Anthracite Coal Strike of 1902, Roosevelt became the first president to assume such a direct role in intervening in labor disputes, including the threatened use of the U.S. Army to seize the coal mines and operate them until the owners agreed to arbitration to settle the strike. Rosevelt unlike many of his successors really took advantage of the power given to him as president. During his presidency he revived the Sherman Antitrust Act ,which was an act that sought to prevent companies from combining into trusts and gaining monopolies. Roosevelt was also one to enforce the Hepburn Act, which allowed the Interstate Commmerce Commission to regulate railroads. The railroads had allied themselves with large

There are different types of businesses, for example, some use monopolies, trust and pools, while other eliminate competition for higher prices. As stated in “Progressive reformers regarded regulation as a cure for all sorts of socioeconomic and political problems” , “The Sherman Act of 1890 attempted to outlaw the restriction of competition by large companies that co-operated with rivals to fix outputs, prices, and market shares, initially through pools and later through trusts” , meaning, competition is the

The government also enacted the Hepburn Act, which made shipping internationally difficult on the railroad. Despite the fact that government grants led to incompetent railroads, the Interstate Commerce Commission and Hepburn Act were put into place, which made it so Hill “could not offer rate discounts on exports traveling on the Great Northern en route to the Orient” which was helping improve the economy with increased trade. Hill and other market entrepreneurs were not corrupt or unfair when choosing to not have subsides, but rather the political entrepreneurs were corrupt and insolvent. Also, Folsom argues that John D. Rockefeller was negatively impacted by government intervention. The Sherman Act was intended “to prevent monopolies and those companies ‘in restraint of trade’. Yet Standard Oil had no monopoly and certainly was not restraining trade” . Rockefeller’s goal was not to create a monopoly but in order to keep his business succeeding he needed directors in each state. By enacting the Sherman Act, Rockefeller’s company struggled, due to competition rising. These laws essentially stopped the growth of successful businesses, such as Hill and Rockefeller, who became so successful due to no government intervention.

Antitrust law in the United States is a collection of federal and state government laws regulating the conduct and organization of business corporations with the intent to promote fair competition in an open-market economy for the benefit of the public. Congress passed the first antitrust statute, the Sherman Antitrust Act, in 1890 in response to the public outrage toward big business. In 1914, Congress passed two additional antitrust laws: the Federal Trade Commission Act and the Clayton Act. (The Antitrust Laws. Web.)

Furthermore, in Standard Oil Co., the Supreme Court stated that “The term "monopoly,"… as used in the Sherman Act was intended to cover such monopolies or attempts to monopolize as were known to exist in this country; those which were defined as illegal at common law by the States, when applied to intrastate commerce.” The Supreme Court went on to further state that “the principles of the common law applied to interstate as well as to intrastate commerce.”

The ability for the federal government to regulate businesses’ activity is given in the Constitution. Article 1, Section 8 is known as the commerce clause; it states, “Congress shall have the Power…to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes” (Reed, 173). Through the commerce clause, the government is able to regulate business activity by the use of administrative agencies, which is defined as “a governmental regulatory body that controls and supervises a particular activity or area of public interest and administers and enforces a particular body of law related to that activity or interest” (Administrative Agency, 1). There are two types of regulatory authority that agencies may

The Federal Communication Commission or FCC was created by the Communications Act of 1934. The Federal Communication Commission is responsible for regulating interstate and international communication through modes of communication like radio, television, and satellite. Although the Federal Communication Commission does have some negative consequences the positive implications that resulted because of the creation of the FCC outweigh them.

After that the Clayton Antitrust Act was created to elaborate on the general provisions of the Sherman Act and specified a number of illegal practices that either contributed to or resulted from companies taking over. It outlawed commercial practices such as charging different prices to different customers, the buying out of competitors and combining boards of directors. This allowed for farmers and big companies to be able to compete equally. The government also established the Federal Trade Commission, an agency with the power to investigate possible violations of antitrust laws and to issue

A monopoly is exclusive possession or control of the supply or trade in a commodity or service and in an economy this form of power can create a decline in the welfare of the consumer. The government may seek to regulate monopolies as a way to protect the interests of the consumer and use regulations as a way to limit price increases. These regulations are intended to reduce the practices of unfair business because monopolies have the ability to charge unreasonable high prices for the goods and services proving detrimental to consumers.