Essay 17-B: Theodore Roosevelt and the Sherman Antitrust Act

Essay Read by Constituting America Founder, Actress Janine Turner

“I told McKinley it was a mistake to nominate that wild man [Theodore Roosevelt]” as Vice President, Senator Mark Hanna of Ohio said. “I told him what would happen if he should die. Now look. That damned cowboy is president of the United States.” Mark Hanna, sometimes referred to as McKinley’s Karl Rove, and my distant relative, was a champion of consolidating power in large corporations and “trusts.”

When Roosevelt gave his first message to Congress in December, 1901, the nation’s leading industrialists watched to see what the “damned cowboy” would say about their power over the government and the government’s power over them.

Roosevelt did not initially oppose the huge new corporate combinations. “Once the government actually knew what businesses were up to, he said, it could consider regulation or taxation to protect the public interest… In early January 1902, Minnesota sued to stop the Northern Securities Company from organizing on the grounds that such a combination violated Minnesota law… In February, Roosevelt’s attorney general told newspapers that the administration believed the formation of the Northern Securities Company violated the 1890 Sherman Antitrust Act and that he would be filing a suit to keep it from organizing… Business leaders were aghast, not only because Roosevelt was going after a business combination but also because he had acted without consulting Wall Street. When J. P. Morgan complained that he had not been informed, Roosevelt coolly told him that that was the whole point. Morgan implored Roosevelt to ‘Send your man [the attorney general] to my man [one of his lawyers] and they can fix it up.’ The president declined. ‘We don’t want to fix it up,’ explained the attorney general. ‘We want to stop it.’”

Article I, Section 8, Clause 3 of the U.S. Constitution, known as the Commerce Clause, grants Congress the power “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” This establishes Federal authority over interstate commerce …Roosevelt believed the president was the ‘steward of the people’ and thus empowered to do anything for the public nation’s needs unless explicitly forbidden by the Constitution.”

His use of the Sherman Antitrust Act to oppose the Northern Securities Company railroad trust became the first of a string of “trust-busting” actions that were challenged and resulted in severalnotable Supreme Court cases. In Northern Securities, the Supreme Court ruled 5–4 to dissolve the massive railroad holding company, proving the Sherman Act applied to stock-holding combinations that restrained interstate commerce. It was followed by Swift and Company v. United States in which the Court ruled unanimously in favor of Roosevelt’s prosecution of the Chicago “beef trust,” establishing that local business combinations that dominate a national market fall under federal regulatory jurisdiction via the Commerce Clause.

His successor, William Howard H. Taft, strongly rejected Roosevelt’s view of undefined executive powers and independent agency discretion, calling it an unsafe doctrine that undermined private rights and constitutional limits. 

The central question is how Congress may use its Article I lawmaking powers to create federal agencies and offices within those agencies, and prescribe, subject to certain constitutional limitations, how those holding agency offices are appointed and removed. Congress also may enumerate the powers, duties, and functions to be exercised by agencies, as well as directly counteract, through later legislation, certain agency actions implementing delegated authority.

Although the Supreme Court has repeatedly affirmed the validity of these agencies, no less an authority than the Chief Justice of the United States Supreme Court, John Roberts has written, “The administrative state wields vast power and touches almost every aspect of daily life….TheFramers could hardly have envisioned today’s vast and varied federal bureaucracy and the authority administrative agencies now hold over our economic, social, and political activities.… The administrative state with its reams of regulations would leave them rubbing their eyes.”

In spite of their extra-Constitutional footing, and their seemingly unending blizzard of regulations, these agencies have been effectively used to produce public good in addition to imposing a burden on those they regulate. Thus, even though the independent agencies operate outside the tripartite design of the federal government established by the Constitution, they remain subject to Congressional oversight.

Colin A. Hanna is President of Let Freedom Ring, Inc., a public policy nonprofit committed to promoting Constitutional government, economic freedom, and traditional values. Colin is President of Enduring Impact Productions; a film production company currently engaged in developing a feature film for theatrical release on the life of Frederick Douglass.

Colin served as County Commissioner for Chester County, Pennsylvania from 1995 to 2003. Colin was an executive with CBS Radio and Television and a small business owner. Colin is a commentator on American Radio Journal, syndicated to over 200 radio stations, and an op-ed contributor to The Washington Times, Philadelphia Inquirer, The Hill, Roll Call, Atlanta Journal & Constitution, and National Review Online, among others. Colin is a former chairman of the board of Coalitions for America and member of ACU Foundation and CNP Action, Inc.

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