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May 9, 2022 Blog by Jonathan Coppess, Department of Agricultural and Consumer Economics, University of Illinois Increased prices, new and continuing supply chain problems, and more in the wake of Russia's unprovoked war on Ukraine and the Covid-19 pandemic may be reinvigorating discussions and questions about the markets, competition, antitrust and agriculture (see e.g., farmdoc daily, April 26, 2022; April 13, 2022; April 5, 2022; and Irwin, April 14, 2022). From fertilizer prices to cattle markets, the issues are increasingly in the spotlight, front and center in policy discussions (see e.g., U.S. Senate, Committee on Agriculture, Nutrition, and Forestry, Hearing, April 26, 2022; House Committee on Agriculture, Hearings, April 27, 2022). Antitrust and competition policies possess a long, complicated history and agriculture has often been in the middle of the discussion. For background to the discussion, this article presents a summary review of the legislative history for the major antitrust, antimonopoly and fair competition statutes. Background U.S. antitrust legislation originated in the era known as the Gilded Age at the end of the 19th Century; it was the reign of the Robber Barons, famous names such as Andrew Carnegie, John Pierpont Morgan and John D. Rockefeller. The years around the turn of the 20th Century were dominated by the Trust Movement, in which economic concepts were mixed with Social Darwinism to achieve the goal of monopoly control across all sectors. At the time, the trusts were new entities that sought to eliminate competition and competitors, accumulating vast amounts of wealth and power, including political power. As just one example, to create the U.S. Steel monopoly, J.P. Morgan bought out Andrew Carnegie for an amount that made Carnegie the richest man in the world. Morgan also created the Northern Securities Company to monopolize the western railroads and, of course, Rockefeller created the Standard Oil Company, which monopolized the oil industry and abused power through a cartel with the railroads. For American agriculture these issues were prevalent and important; commodity trusts were also created, including for tobacco, cotton and sugar, while monopolization in the railroad sector was particularly problematic for farmers. (see e.g., Sawyer 2019; Wu 2018; Hovenkamp 2015). Discussion: Legislative History of Antitrust Law (1) The Sherman Antitrust Act, 1890 Senator John Sherman (R-OH), the younger brother of the famous Civil War general William T. Sherman, introduced legislation to protect trade and commerce from "unlawful restraints and monopoly" (S.1 of the 51st Congress; December 4, 1889; H. Rept. 51-1707). On the Senate floor, he argued against the "new form of combination commonly called trusts, that seeks to avoid competition" by "placing the power and property of the combination under a few individuals, and often under the control of a single man" and that the "sole object of such a combination is to make competition impossible." He added that if the "concentrated powers of this combination are intrusted [sic] to a single man, it is a kingly prerogative, inconsistent with our form of government, and should be subject to the strong resistance of the State and national authorities," because if the United States "will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life" (Congressional Record, March 21, 1890, at 2457). The Sherman Act passed the Senate on April 8, 1890, by a vote of 52 to 1 (29 absent) (Congressional Record, April 8, 1890, at 3152-43). The House amended the Senate bill and passed it without a recorded vote on May 1, 1890 (Congressional Record, May 1, 1890, at 4104). The Senate concurred in the conference report on June 18, 1890, by unanimous consent and without further debate or votes (Congressional Record, June 18, 1890, at 6208).
The House agreed to the conference report on June 20, 1890, by a vote of 212 to 0 (85 not voting) (Congressional Record, June 20, 1890, at 6314). President Benjamin Harrison, the 23rd President (1889 to 1893) and graduate of Miami University in Oxford, Ohio, signed the Sherman Act into law on July 2, 1890 (Congressional Record, July 2, 1890, at 6922; The White House, Presidents: Benjamin Harrison). Figure 1 illustrates the voting in Congress on the Sherman Act and Figure 2 summarizes the Act's key provisions.
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