The Government Imposes Regulations
The great industrialists' methods and their stranglehold on the nation's econ-
omy worried some Americans. The railroad industry was renowned for unjust
business practices, including random and unfair rates and the process of pool-
ing rates and traffic.
Finally, in 1887, the United States Senate created the Interstate Commerce
Commission (ICC) to oversee railroad operations. This was the first federal body
ever set up to monitor American business operations. The ICC could only mon-
itor railroads that crossed state lines, and it could not make laws or control the
railroads' transactions. Still, the ICC could require the railroads to send their
records to Congress, so that Congress could initiate investigations of unfairness.
Over the next several decades, the government would set up many other federal
bodies to regulate American businesses.
Similarly, the federal government slowly became involved in regulating
trusts. In 1890, the Senate passed the Sherman Antitrust Act, which outlawed
any trust that operated "in restraint of trade or commerce among the several
states." For more than a decade, the provision was seldom enforced. In fact, the
law was often used in the corporations' favor, as they argued that labor unions
restrained trade. However, the ICC and the Sherman Antitrust Act began a
trend toward federal limitations on corporations' power.
Checkpoint How did the federal government regulate business?
