Sherman Antitrust Act Passed but Designed for Non-Enforcement Against Monopolies

On July 2, 1890, President Benjamin Harrison signed the Sherman Antitrust Act into law after it passed the Senate 51-1 (April 8) and the House 242-0 (June 20), creating America’s first federal anti-monopoly legislation—but the law was deliberately vague, weakly worded, and systematically unenforced against industrial monopolies for more than a decade, functioning primarily as political theater to deflect public anger while protecting the very trusts it claimed to regulate. The Act made it illegal to restrain trade through monopolies or anti-competitive agreements, a response to growing public outrage over railroad, oil, steel, and sugar trusts that dominated American industry. By 1890, combinations controlled major sectors of the economy, with Standard Oil controlling 90-95% of oil refining, American Sugar Refining Company controlling 98% of sugar production, and similar monopolies in whiskey, lead, cottonseed oil, and other industries. However, the Act was fatally flawed by design: it failed to define critical terms like ’trust,’ ‘combination,’ ‘conspiracy,’ and ‘monopoly,’ making enforcement nearly impossible. The law’s vagueness was not accidental—Senator Sherman himself sponsored the protectionist McKinley Tariff just three months later in October 1890, which strengthened monopolies by blocking foreign competition. The New York Times wrote on October 1, 1890: ‘That so-called Anti-Trust law was passed to deceive the people and to clear the way for the enactment of this Pro-Trust law relating to the tariff.’ For more than a decade after passage, the Sherman Act was invoked only rarely against industrial monopolies, and never successfully. In 1895, the Supreme Court gutted the Act in United States v. E.C. Knight Company, ruling that the American Sugar Refining Company’s 98% control of sugar refining did not violate the law because manufacturing was not ‘commerce among states.’ Ironically, the Sherman Act’s only effective use was against labor unions, which courts ruled were illegal combinations in restraint of trade. Vigorous enforcement against monopolies did not begin until Theodore Roosevelt’s presidency (1901-1909), and even then was selective. The Sherman Act represents the birth of regulatory theater—passing laws that appear to constrain corporate power while being designed for non-enforcement, a pattern that continues today with inadequately resourced agencies, revolving doors between regulators and industry, and laws written by corporate lobbyists to include loopholes ensuring they cannot be meaningfully enforced.