Economic Impact of Trusts.

By 1890, the year the Sherman Antitrust Act was passed, many saw the power of large business monopolies, or trusts, as a serious problem. Encouraged by the expansion of the transportation and communication sectors, trusts had proliferated since the Civil War, resulting in a continual squeezing out of small businesses and a concentration of economic power among fewer, larger businesses. But the effects of trusts were not wholly negative. As opposed to the duplication of efforts inherent in a competitive environment, trusts provided substantial savings and allowed for higher production capacity by assuring that businesses had dependable supplies of critical parts as well as reliable transportation and financing. The savings, however, were not necessarily passed on to the stockholder, working laborers, or the consumer.

Deficiencies of the Sherman Antitrust Act.

The Sherman Antitrust Act had...