Trust-Busting: Breaking Up Business Monopolies — Reading Comprehension

In the late 1800s and early 1900s, the United States faced a major problem: huge companies called monopolies controlled entire industries and limited competition. These giant businesses, often known as trusts, could set high prices, reduce product quality, and keep smaller companies out of the market. Famous examples included Standard Oil, U.S. Steel, and the American Tobacco Company. Many Americans worried that monopolies threatened economic fairness and democracy itself.

There were several causes for the rise of monopolies. Rapid industrial growth after the Civil War allowed a few powerful business leaders to buy out competitors and control key resources. Weak government regulation and a belief in laissez-faire economics—meaning little government interference—helped monopolies grow even larger. As a result, business owners like John D. Rockefeller and Andrew Carnegie became extremely wealthy, while workers and consumers often suffered.

Public anger grew as people realized the dangers of unchecked corporate power. Newspapers published stories about factory accidents, unsafe products, and unfair worker treatment. In 1888, a senator declared, "There is a widespread belief that the trusts are injurious to the public." This quote, taken from a Congressional debate, shows that politicians and citizens alike recognized the harmful effects of monopolies. Many demanded that the government take action to restore competition.

The government’s solution was the Sherman Antitrust Act of 1890, the first major law to regulate business monopolies. The law made it illegal for companies to form trusts or agreements that restricted trade. However, early enforcement was weak, and many trusts found ways to avoid punishment. This led to frustration among reformers who wanted stronger action against big business.

President Theodore Roosevelt became famous as a "trust-buster." He believed that some large companies were necessary for progress, but that those abusing their power must be controlled. Roosevelt’s administration used the Sherman Antitrust Act to break up more than 40 trusts, including the powerful Standard Oil Company in 1911. He explained, "We draw the line against misconduct, not against wealth." His point was that wealth alone was not the problem; unfair practices were.

Different groups had different perspectives on trust-busting. Some business owners argued that monopolies created efficiency and lower prices. Others, like small business owners and workers, felt crushed by unfair competition and poor labor conditions. Consumers wanted lower prices and safer products. Lawmakers debated how much control the government should have over private enterprise. These conflicts made antitrust policy complicated and controversial.

Despite these challenges, trust-busting had important consequences for American society. The breakup of big trusts led to more competition, better prices for consumers, and new opportunities for smaller businesses. It also showed that the federal government could step in to protect the public interest. However, debates about the balance between government regulation and economic freedom continue today.

Interesting Fact: The breakup of Standard Oil in 1911 created 34 smaller companies. Some of today’s biggest oil companies, like ExxonMobil and Chevron, began as parts of the old Standard Oil trust.

Who was known as the "trust-buster"?

What year was the Sherman Antitrust Act passed?

Which company was broken up in 1911?

Why did some support monopolies?

What effect did trust-busting have?

What did Roosevelt mean by 'We draw the line against misconduct, not against wealth'?

Trusts always improved product quality. True or false?

What is a monopoly?