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Progressive Era: 1891–1920

Trust Busting and Standard Oil

The Standard Oil Company was a monopoly controlling all aspects of the oil industry, and the Sherman Antitrust Act of 1890 was used to break apart John D. Rockefeller's oil empire into smaller entities.
The Standard Oil Company and Trust was incorporated in 1870, but its beginnings go back to 1863. John D. Rockefeller and his associates started an oil-refining company, which Rockefeller controlled. He bought out one man and added another, soon making his firm the largest network of refineries in Cleveland, Ohio. Standard Oil bought out smaller companies and used unethical business practices to get rid of the competition. The company took over parts of the rail system to reduce its costs in transporting oil. By 1880 Standard Oil controlled 90 to 95 percent of all oil refining in the United States. The company merged with its marking partners in 1882 and created the trust, controlling nearly 40 corporations involved in the oil business.

Standard Oil Reaching for Control of Government

The Standard Oil Company and Trust used unethical business practices to swallow up the competition and control nearly all aspects of the oil industry, from production to refinement to sales.
Credit: Courtesy of the Library of Congress, LC-USZC4-435
The ability to shift money and ownership from corporation to corporation made Standard Oil hard to pin down for illegal activity, but muckraker journalists exposed the company's tactics. Ida Tarbell, an American journalist and lecturer specializing in reports on industry, became famous for her series of articles "The History of the Standard Oil Company" (1904). Tarbell investigated the company's rising oil empire and exposed its unethical business practices. The Ohio Supreme Court dissolved the trust in 1892, but the company still tried to get away with keeping its holdings. Rockefeller transferred everything to his New Jersey company, named it Standard Oil Company, and used it to continue doing business as usual. The Standard Oil Company was not successfully broken apart until the U.S. government sued the company in 1906. Using the Sherman Antitrust Act of 1890, a piece of legislation that curbed powerful companies seeking to reduce competition, the government justified taking away what was considered far too much economic power for one company to hold. On appeal the case moved to the U.S. Supreme Court, which decided for the government in 1911. By the time the company was successfully split apart, Standard Oil consisted of 33 companies.