Good Trusts, Bad Trusts, & Trust Busting - PowerPoint PPT Presentation

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Good Trusts, Bad Trusts, & Trust Busting
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Good Trusts, Bad Trusts, & Trust Busting

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  1. Good Trusts, Bad Trusts, & Trust Busting

  2. Good Trusts • Large corporations that encouraged economic development & cooperation between industries • Businesses that learned new ways to cooperate with other businesses • Businesses that incorporates new ways of self-regulation

  3. Bad Trusts • Large corporations: • Widespread corruption among business leaders • Employed unfair business practices (unfair labor practices, poor working conditions & price fixing) • Restricted ability of workers to unionize • Government Officials (Progressives) seek to break up these Bad Trusts and enact reforms

  4. Teddy Roosevelt & Trust Busting • 1902—Teddy Roosevelt began breaking up trusts (large corporations) • Directed the Department of Justice (DOJ) to begin a series of prosecutions (citing the violation of the Sherman Anti-Trust Act) • 1st Target: Northern Securities Company • Financier J.P. Morgan merged RR Companies, created monopoly over RR’s of nearly all RR’s from Chicago to CA

  5. Northern Securities Company v. the United States • Court held stock transactions constituted an illegal combination in restraint of interstate commerce & restricted competition—thus enabling the company to control prices (price gouging)

  6. Teddy Roosevelt & Trust Busting • No. Securities Co. v. U.S. established T.R.’s reputation as a ‘trust buster.’ • During his 2 terms, the DOJ filed 43 court cases under the Sherman Antitrust Act • Purpose: to restrain to dissolve business monopolies • Targets included major tobacco and beef trusts • T.R. viewed suits as necessary to publicize corruption in big business & to assert the Federal Government’s final authority over big business

  7. Teddy Roosevelt & Trust Busting • While he did support small business, he did not truly advocate breaking up ALL big corporations. • He was interested in breaking up the large corporations that broke the law

  8. Teddy Roosevelt’s 2nd Term • Pushed for greater regulatory legislation • 1906—Hepburn Act • Strengthened the ICC (Interstate Commerce Commission) • ICC—established in 1887 as the 1st regulatory commission/agency • Purpose: authorized to set max Railroad rates and inspect financial records of Railroad Companies