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The American Pageant (12th Edition)
Chapter 30 – Page 689
689 “The keynote of Wilson’s campaign [in 1912] was not regulation but fragmentation of the big industrial combines, chiefly by means of vigorous enforcement of the antitrust laws.”
Bailey and Kennedy talk about President Wilson’s “New Freedom,” which was his program to implement progressive ideas. It was much more interventionist than the text suggests. This sentence alludes to the Sherman Anti-Trust Act, passed in 1890. That law was supposed to discourage “trusts” (multiple companies run by the same board of directors—Bailey and Kennedy never clearly define the term). Wilson’s idea here was that bigness was inherently bad, and smaller independent corporations needed to be given a legal advantage. A key provision of the Sherman Anti-Trust Act states that any “combination” that is “in restraint of trade … is illegal.” That wording is a huge problem because it is so vague. What does it mean to “restrain trade”? A small business selling shoes in the mall is “restraining trade” from another shoe store four blocks away in the local business district. Should someone be prosecuted? Should the mall shoe store be banned?
When a law is vague, that means courts and higher executive powers will be interpreting law (in this case, the “in restraint of trade” clause) and imposing their decisions on all businesses. Progressives like that because it takes market decisions out of the hands of buyers and sellers at the grassroots and puts more legal power into the hands of administrators, who are supposedly experts and thus better able to direct the economy. This leads us to Bailey and Kennedy’s approval of Wilson’s planning “vigorous enforcement of the anti-trust laws.” In other words, Wilson wanted to take some power out of the hands of consumers to choose which corporations to buy from, and put that power into the hands of administrators at the Justice Department to determine how big some corporations would be, and judge whether or not consumers ought to be allowed to buy products from those big corporations. Notice in the last chapter that Teddy Roosevelt, a Republican, wanted to prosecute James J. Hill, a Democrat, for trying to buy a bankrupt railroad. Next, President Wilson, a Democrat, will have his turn to use the Justice Department to prosecute corporations he may not like.