Individuals and companies suffering losses because of trusts were permitted to sue in federal court for triple damages. Persons forming such combinations were subject to fines of $5,000 and a year in jail. Any combination "in the form of trust or otherwise that was in restraint of trade or commerce among the several states, or with foreign nations" was declared illegal. The Sherman Anti-Trust Act authorized the federal government to institute proceedings against trusts in order to dissolve them. This allowed Standard Oil to function as a monopoly since the nine trustees ran all the component companies. The nine trustees elected the directors and officers of all the component companies. All the profits of the component companies were sent to the nine trustees, who determined the dividends. Every stockholder received 20 trust certificates for each share of Standard Oil stock. A board of trustees was set up, and all the Standard properties were placed in its hands. Attorney Samuel Dodd of Standard Oil first had the idea of a trust. For example, on January 2, 1882, the Standard Oil Trust was formed. Toward the end of the 19th century, trusts come to dominate a number of major industries, destroying competition. In exchange, the stockholders receive a certificate entitling them to a specified share of the consolidated earnings of the jointly managed companies. President Benjamin Harrison signed the bill into law on July 2, 1890.Ī trust is an arrangement by which stockholders in several companies transfer their shares to a single set of trustees. The Sherman Anti-Trust Act passed the Senate by a vote of 51–1 on April 8, 1890, and the House by a unanimous vote of 242–0 on June 20, 1890. (For more background, see previous milestone documents: the Constitution, Gibbons v. The Sherman Antitrust Act was based on the constitutional power of Congress to regulate interstate commerce. Several states had passed similar laws, but they were limited to intrastate businesses. It was named for Senator John Sherman of Ohio, who was a chairman of the Senate finance committee and the Secretary of the Treasury under President Hayes. The Sherman Anti-trust Act of 1890 was the first measure passed by the U.S.
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