Question

What is Sherman Act and how does it differ from the Clayton Act?

How did Rockefeller make his money?

Why was it seen as monopoly?

Did he still benefit from his company being dismantled? If so, how?

Describe his upbringing.

Answer 1

The Sherman Antitrust Act of 1890 is a United States antitrust law that regulates competition among enterprises that was passed by Congress under the presidency of Benjamin Harrison. It is named for Senator John Sherman, its principal author.

The Sherman Antitrust Act of 1890 was proposed by John Sherman from Ohio and was later amended by the Clayton Antitrust Act. The Sherman Antitrust Act prohibited trusts and outlawed monopolistic business practices, making them illegal in an effort to bolster competition within the marketplace.

The act contained three different sections. The first defined and banned different types of anticompetitive conduct. The second section addressed the end results considered to be anticompetitive. The third and final section extended the provisions in the first section to include D.C. and any U.S. territories.

But the language used in the Sherman Act was deemed too vague. This allowed businesses to continue engaging in operations that discouraged competition and fair pricing. These controlling practices directly impacted local concerns and often drove smaller entities out of business, which necessitated the passing of the Clayton Antitrust Act in 1914.

While the Clayton Act continued the Sherman Act's ban on anticompetitive mergers and the practice of price discrimination, it also addressed issues the older act didn't cover by outlawing incipient forms of unethical behavior. For example, while the Sherman Antitrust Act made monopolies illegal, the Clayton Antitrust Act banned operations intended to lead to the formation of monopolies.

Rockefeller founded the Standard Oil Company in 1870. He ran it until 1897, and remained its largest shareholder. Rockefeller's wealth soared as kerosene and gasoline grew in importance, and he became the richest person in the country, controlling 90% of all oil in the United States at his peak.

John Rockefeller lived in an age when owners of industries operated without much interference from government. Even the income tax did not exist. Rockefeller built an oil monopoly by ruthlessly eliminating most of his competitors.

On May 15, 1911, the Supreme Court ordered the dissolution of Standard Oil Company, ruling it was in violation of the Sherman Antitrust Act

John Davison Rockefeller was born on July 8, 1839, in Richford, New York, the second of six children. His father owned farm property and traded in many goods, including lumber and patent medicines. His mother, who was quite the opposite of his father's fun-loving ways, brought up her large family very strictly. After living in Oswego, New York, for several years, the family moved to Cleveland, Ohio, in 1853, when it was beginning to grow into a city. John graduated from high school there and excelled in mathematics.

After graduation Rockefeller attended a commercial college for three months, after which he found his first job at the age of sixteen as a produce clerk. In 1859, at age nineteen, he started his first company, Clark and Rockefeller, with a young Englishman. They grossed (money earned before expenses) four hundred fifty thousand dollars in the first year of trading. Clark did the fieldwork while Rockefeller controlled office management, bookkeeping, and relationships with bankers.