Wednesday, May 15, 2013

May 15 (1911) US Supreme Court Orders Standard Oil to Dissolve "Enormous and unreasonable profits"

Political cartoon showing a Standard Oil tank as an octopus with many tentacles wrapped around the steel, copper, and shipping industries, as well as a state house, the U.S. Capitol, and one tentacle reaching for the White House.


On this day, May 15, 1911 the US Supreme Court found the Standard Oil Company of New Jersey in violation of the Sherman Antitrust Act, arguing that the company monopolized the petroleum industry through uncompetitive and abusive practices, and ordered its dissolution within six months.

Though the Sherman Act was signed into law in 1890, it wasn't until Theodore Roosevelt's administration that the law was fully enforced.

Below is an excerpt from the ruling which articulates the evil vs. good debate regarding monopolies, arguments echoed today.

"The Standard Oil Company of New Jersey -- with the vast accumulation of property which it owns or controls, because of its infinite potency for harm and the dangerous example which its continued existence affords, is an open and enduring menace to all freedom of trade, and is a byword and reproach to modern economic methods.

"On the other hand, in a powerful analysis of the facts, it is insisted that they demonstrate that the origin and development of the vast business which the defendants control was but the result of lawful competitive methods, guided by economic genius of the highest order, sustained by courage, by a keen insight into commercial situations, resulting in the acquisition of great wealth, but at the same time serving to stimulate and increase production, to widely extend the distribution of the products of petroleum at a cost largely below that which would have otherwise prevailed, thus proving to be, at one and the same time, a benefaction to the general public as well as of enormous advantage to individuals."

Image taken from Wikimedia Commons, originally published in Puck, v. 56, no. 1436 (1904 Sept. 7). Summary: Political cartoon showing a Standard Oil tank as an octopus with many tentacles wrapped around the steel, copper, and shipping industries, as well as a state house, the U.S. Capitol, and one tentacle reaching for the White House.
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Flannery O'Connor

You shall know the truth and the truth shall make you odd.