Sherman Anti-Trust Act of 1890 was the first antitrust law passed by the U.S. Congress. It was named after Senator John Sherman. Combinations of business concerns in anti competitive spirit and the concentration of economic power in large corporations led the Congress to pass the Sherman Act. The Act declared illegal every agreement, combination (in the form of trust or otherwise), or collusion in restraint of interstate and foreign trade. For violation of the provisions of the Act, maximum fine of $5,000 and maximum imprisonment of one year was provided for.
However, "Antitrust" is popularly called "competition law." The purpose of the Act was to prevent or break the combination of entities that could harm competition, such as monopolies or cartels. Its reference to trusts is rather a misnomer today. At the time of its passage, the concept of trust was synonymous with monopolistic practice, because in trust form monopolists used to own their businesses, and trust was an avenue for parties to a cartel acting in concert with each other to create anti competitive agreements. Before its enactment, various states had passed similar antitrust legislation, but those were limited in application to intrastate businesses within the state or jurisdiction.
According to Senator George Hoar, a co author of the bill, any enterprise that "got the whole business because nobody could do it as well as he could" would not be in breach of the Act. The law also attempts to prevent the artificial raising of prices by restriction of trade or supply or illicit dealings to create a monopoly. Innocent monopoly, or monopoly achieved solely by merit, is perfectly legal, but misdeeds of a business concern to artificially preserve or create its monopoly web are offensive under the Act.
The Act was unable to achieve its original objectives. The main reason behind this was the absence of a strong independent commission for its enforcement.
.In 1894, the attorney-general, Richard Olney, had invoked the provisions of the Sherman Anti-Trust Act against the American Railway Employees Union to crush their strike. As a result, Eugene Debs, the president of the union, was put behind the bars for contempt of court.
In 1914 the Wilson administration passed the Clayton Antitrust Act in order to supplement the provisions of the Sherman Antitrust Act, and the Federal Trade Commission was set up in the same year. In a suit instituted in 1974 under the provisions
