Standard Oil Broken UP


In the largest and most visible anti-trust case in American history to date, the Standard Oil Company of New Jersey was ordered to divest itself of its 37 interlocking firms. An appeal to the Supreme Court was turned down.

In 1890 the Congress had passed the Sherman Anti Trust Act. The impetus for the law was the collusion between railroads who raised their rates. Standard Oil Company was founded in 1870 and initially specialized as a refining oil, but as it consolidated its control over the refinery market, it also expanded to up and down market purchasing both oilfields on one end and service stations on the other.

By 1904 it is estimated that Standard Oil controlled 91% of the production and 81% of the sale of final petroleum products in the United States.
In 1909 the United States Justice Department sued Standard Oil for violating the Sherman Act by sustaining a monopoly and restraining trade. The most egregious act by the company to maintain their monopoly was collusions with the railroads to ensure they received lower shipping rates than their competitors.

The United States Court initially heard the case Standard Oil Company of New Jersey vs. the United States for the Eastern District of Missouri; it was then heard by the US Supreme Court. Arguments were initially held in March of 1916. The court delivered its verdict in favor of the government on March 15, 1911, and ordered the company broken up into 37 smaller companies.