Monopoly with Real Money

February 11, 1903
The Expedition Act was Passed

If you’ve ever played the board game Monopoly, you know that the goal is to collect real estate or control railroads. If you have hotels on Park Place and Boardwalk, you’re in good shape, but if you don’t, then they’re expensive places to land. During the late 1800s, life was becoming a bit like a Monopoly game. A person or company would merge businesses with related industries, making it possible to control production and prices. One example was J.P. Morgan’s U.S. Steel Corporation. This company controlled all the stages of steel production, from iron-ore mining to steel manufacturing. When one company has such strong control over an industry, it makes it difficult for others to compete. This is called a monopoly. Having a monopoly makes it easier for the company to keep prices high and wages low because it has few competitors. What do you think was done about companies like this?

Critics of companies like J.P. Morgan’s U.S. Steel Corporation said that allowing a company to control so many aspects of an industry hurt the general public. By 1902, there was such concern about huge “trusts” such as U.S. Steel that President Theodore Roosevelt ordered the Justice Department to use “antitrust” laws to prosecute not only the steel industry trust but also the meatpacking, oil, and railroad trusts. He said that these industries took advantage of the public by limiting competition. As a result, the Expedition Act was passed on February 11, 1903, making the antitrust suits a high priority in the nation’s legal system. Roosevelt quickly gained a reputation for breaking up trusts. What nickname do you think he was given?

Roosevelt became known as a “trustbuster,” but that didn’t mean that he thought all business combinations were bad. He made the distinction between good trusts that streamlined business production, and bad trusts that used their position to keep prices high. Roosevelt continued to fight against “Big Business,” and he led a successful crusade to break up the Standard Oil monopoly in 1907. Roosevelt’s actions were popular with the public, but some historians have argued that his trust-busting behavior was motivated by politics as much as by the government’s desire to control corporate America. What do you think?