History Timeline 1910's

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U.S. Timeline - The 1910s

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  • 1911 - Detail

    May 15, 1911 - Standard Oil is declared an unreasonable monopoly by the United States Supreme Court and ordered dissolved under the powers of the Sherman Antitrust Act.



    Standard Oil Share 1878

    John D. Rockefeller was an icon, an icon that hated the efforts of the government to restrain trade and the ability of companies to control their own destiny. He disliked and disagreed with the Sherman Antitrust Act of 1890, and ran his business and trust that controlled the Standard Oil Company of New Jersey in the manner he saw fit. Standard Oil controlled the nation's oil business. In 1909, a federal court ruled that Standard Oil Company of New Jersey and the Rockefeller Trust were in violation of the Sherman Antitrust Act. They ordered the dissolving of Standard Oil. Rockefeller protested, appealing the decision until it reached the Supreme Court. For nearly one full year the case was argued, from March 14, 1910 to January 17, 1911. Four months later the Supreme Court ruled. The federal court would be upheld; Standard Oil would be dissolved.

    Standard Oil Company of New Jersey versus the United States had been brewing for many years. In the 1880's, Standard Oil began branching out from what was essentially a refining company into oil exploration and retail distribution. They wanted to control all aspects of the industry from pumping from the ground to gas stations. They succeeded. They succeeded with a variety of tactics. Underpricing to force competitors out of business. Threats to service stations that used competitor products. Purchase of competitors until they had a monopoly in a region or subclass of the industry. After passage of the Sherman Antitrust Act in 1890, the State Attorney General of Ohio, David K. Watson, began looking into Standard's practices. He filed suit and successfully prosecuted them.


    The Case

    By the time the lawsuits made their way to the United States Supreme Court, Standard Oil was a behemoth. In 1909, Standard Oil Company of New Jersey had sixty thousand employees. The U.S. Supreme Court in 1910-1 was run by Chief Justice Edward D. White with Associate Justices John M. Harlan, Joseph McKenna, Oliver W. Holmes, Jr., William R. Day, Horace H. Lurton, Charles E. Hughes, Willis Van Devanter, and Joseph R. Lamar. The case would be decided on the merits of the Commerce Clause and whether the practices of Standard Oil constituted a "restraint of trade" that would prove monopolistic, thus resulting in higher prices, reduced output, and reduced quality. They also referred to the idea that Standard Oil abused the Sherman Antitrust Act, because it "unduly" restrained trade. In a broad vote against the Rockefeller Trust and Standard Oil, the Supreme Court ruled 8-1 that Standard Oil had monopolized the industry and should be broken up. The only dissenting vote, John M. Harlan, actually agreed that they were monopolistic as well, but did not think the "rule of reason" should be adopted.

    The remedy for the monopolistic abuse, Standard Oil, founded in 1870, was broken into thirty-four separate companies, many by region. Standard Oil of New Jersey (ESSO) which became EXXON after merging with Humble Oil, Standard Oil of New York (MOBIL), Standard Oil of California (CHEVRON), Standard Oil of Indiana (AMOCO) today part of BP, Standard Atlantic (ARCO), Standard Oil of Kentucky (KYSO), Standard Oil of Ohio (original company known as SOHIO) now part of BP, The Ohio Oil Company (MARATHON), Standard Oil of Indiana, Standard Oil of Minnesota, Standard Oil of Kansas, Standard Oil of Illinois, Standard Oil of Missouri, Standard Oil of Louisiana, Standard Oil of Brazil, as well as other companies that dealt with pipelines, transportation, and refining.

    Today, many of the broken companies reformed into ExxonMobil, with others becoming part of British Petroleum and Chevron.

    Teepossible.com T-Shirts and Gifts

    Text, Sherman Antitrust Act, 1890

    Fifty-first Congress of the United States of America, At the First Session,

    Begun and held at the City of Washington on Monday, the second day of December, one thousand eight hundred and eighty-nine.

    An act to protect trade and commerce against unlawful restraints and monopolies.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, Sec. 1. Every contract, combination in the form of trust or other- wise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, at the discretion of the court.

    Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof; shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

    Sec. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is hereby declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.

    Sec. 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree, the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises.

    Sec. 5. Whenever it shall appear to the court before which any proceeding under section four of this act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpoenas to that end may be served in any district by the marshal thereof.

    Sec. 6. Any property owned under any contract or by any combination, or pursuant to any conspiracy (and being the subject thereof) mentioned in section one of this act, and being in the course of transportation from one State to another, or to a foreign country, shall be- forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law.

    Sec. 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without. respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.

    Sec. 8. That the word "person," or "persons," wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

    Approved, July 2, 1890.

    Photo above: Share of Standard Oil Company issued May 1, 1878. Courtesy Wikipedia Commons. Photo below: Standard Oil tanks in Bakersfield, California, 1910, West Coast Art Company. Courtesy Library of Congress. Info source: Ourdocuments.gov; "Standard Oil Company of New Jersey v. United States." Oyez, 28 Mar. 2018; Wikipedia Commons.

    Standard Oil



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