America's History: The Standard Oil Company
When Ida Tarbell wrote The History of the Standard Oil Company in 1904, it inspired other journalist to write about large and corrupt businesses.
Although the book itself is accredited for later breaking up the company and contributed to the United States government’s antitrust actions against Standard Oil. In my opinion, my stance on a large company that is getting more business than smaller companies is biased. Many of the smaller companies, while still profitable believe they are not receiving as much as a very publicized company. It’s understandable why the Court decided to break up Standard Oil; having just one company making millions of dollars a year gives that company too much power. Even today we have the debate of whether or not some corporate businesses are too powerful alone. The act is was not meant to chastise businesses that overpower their market passively or on their own merit, only those that intentionally dominate the market through misconduct.
The main issue before the Court was whether it was within the power of the Congress to prevent one company from acquiring numerous others through means that might have been considered legal in common law, but still posed a significant constraint on competition by mere virtue of their size and market power, as implied by the Antitrust Act. The Standard Oil Company conspired to restrain the trade and commerce of certain elements, in violation of the Sherman Act, and was split into many smaller companies. Several individuals, including John D. Rockefeller, were fined. It seems that it’s safer to assume smaller companies are better than one large company, not just for competition wise but, it allows consumers to choose a variety of different plans that that company offers.
On the contrary, the more companies are broken down the less profit they make and the more consumers they lose. For instance, why would someone go for a small corporation like Virgin Mobile when they know that they can get better calling times by paying more to a bigger corporation, like T-mobile. However, in the late 1800s, John Rockefeller was using economic threats against his competitors by using secret rebate deals with railroads to build more companies out of his own. While that is considered unfair to his competitors, in the end it’s just business. His violation of the Sherman Act, which prohibits certain business ideas that reduce competition in the marketplace, caused his company to split up into what is now the oil company Mobil.
In conclusion, Standard Oil has a legacy that not only impacted the company but also impacted those who dismantled it. For instance, Ida Tarbell, who’s expose on John Rockefeller caused the companies downfall. Standard Oil has impacted the business market in a way in which lessons are learned from companies who try to breach out and make companies that compete against themselves. The issue of monopolizing was brought into question because of Standard Oil and was a very broadcast part of business history, and the fact that it was dismantled it was harmful to the future of the Standard Oil Company.