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The Muckrakers Effect Change
The Effect of Muckrakers on the US Economy
The Days of Free Business Practice
Businesses from the earliest colonial days were largely left to their own devices. They grew in size and revenue until it was obvious they were monopolies that inhibited the growth of small businesses and competition for pricing and business practices. Ironically, monopolies no longer competed with each other for business.
The Sherman Anti-Trust Act
In 1890, it was obvious that public opinion in the US demanded government interference and regulation of these business monopolies. The first government regulation relative to this was the Sherman Anti-Trust Act of 1890. This legislation outlawed all business contracts and combinations and conspiracies in restraint of trade. Businessmen merely invented ways to evade the Sherman Anti-Trust Act. Intervention and approval by the US Supreme Court created a legal loophole by ruling only "unreasonable" restraint of trade was illegal.
Theodore Roosevelt, The "Trust Buster" President
Theodore Roosevelt, president from 1901 to 1909, attempted to vigorously enforce the Sherman Anti-Trust Act as part of his "Square Deal" program. He hoped it would provide justice to all Americans by unscrupulous businesses. In particular, Roosevelt focused on Northern Securities Company, a railroad holding company formed by J.P. Morgan, E.H. Harriman, James Hill and J.D. Rockefeller. When Northern Securities Company sought to monopolize the railroads in the Northwest, it was dissolved by the Supreme Court.
The Original Muckrakers
Theodore Roosevelt was assisted in his bid to end monopolies by a group of writers that included Ida. M. Tarbell, Lincoln Steffens, Ray Stannard Baker and Upton Sinclair.
Ida M. Tarbell's major work was "History of the Standard Oil Company," which divulged the ruthless practices of the gigantic monopoly Standard Oil Company became. Lincoln Steffens wrote "The Shame of the Cities," which focused on corruption in local politics and its relation to business. Ray Stannard Baker wrote "Railroads on Trial," that shined a spotlight on railroad evils and abuses. Upton Sinclair, most famous of the original muckrakers wrote "The Jungle," a singularly revelation of the revolting practices of the meat-packing industry that so incited public opinion that Congress in 1906 passed the Meat Inspection Act and the Pure Food and Drug Act. These legislations were the precursors of stringent food inspections by today's Food and Drug Administration (FDA).
Other industries of the day involved in business consolidations considered monopolies with links to holding companies were owned by men like Gustavus Swift, Philip D. Armour, Nelson Morris of the meat packing industries. Charles A. Pillsbury of the flour milling industry, James B. Duke in tobacco manufacturing and Andrew W. Mellon of the aluminum industry and Andrew Carnegie of the steel industry were also among these business consolidations. The major evils of industry became obvious: Consumers forced to pay higher prices for inferior goods, smaller independent businesses drive out of existence and the power and supremacy of a government of the people, for the people, by the people challenged when these huge corporations bribed politicians and bought votes of legislators in direct violation of the Constitutional voters' rights.
The Effect of Muckrakers on the Economy
When the muckrakers enlightened the public to the realities of the dangers of monopolies and bad business practices, the result was action by the US government to protect all Americans from corruption. Other important pieces of legislation such as the Clayton Anti-Trust Act of 1914, part of Woodrow Wilson's "New Freedom" program strengthened the Sherman Anti-Trust Act by declaring these business monopolies illegal.
The Importance of Controlling Big Business in the Public Interest
As a result of the courage of the muckrakers to expose big business corruption, the Federal Trade Commission Act of 1914 was passed to prevent unfair competition like misbranding and adulterating goods, false and misleading advertising, spying and bribery to secure trade secrets, and "closely imitating a competitor's product."