Prelude to Progressivism: Party Decay, Populism, and the Doctrine of “Free and Unrestricted Competition” in American Antitrust Policy, 1890–1897

On December 8, 1896, the Supreme Court heard arguments in United States v. Trans-Missouri Freight Association.1 The defendant was an association of 18 railroads locked in competition for traffic between the Missouri River and the Pacific Ocean. By memorandum of agreement, member railways had voluntarily agreed to cease all price-based competition and abide by a common schedule of rates. Attorneys for the railroads maintained that the effects of ruinous competition upon solvency justified the imposition of competitive restrictions. The rates set by the association, they argued, afforded the roads a fair return on their investments, simultaneously offering the public both reasonable rates and adequate facilities. In addition, uniformity of rates facilitated compliance with the Interstate Commerce Act’s prescription that charges be nondiscriminatory as to person and place. Suit was brought against the Trans-Missouri Freight Association for pricefixing and restricting competition in the market for railroad freight services. At issue was the meaning of Section 1 of the Sherman Antitrust Act, which declared illegal “every contract, combination in the form of a trust or otherwise, and conspiracy” in restraint of interstate trade or commerce. Railroad counsel argued that the Sherman Act merely federalized the common law governing restraint of trade and, as such, prohibited only unreasonable restraints of trade. Attorney General Judson C. Harmon denied that common law tests of reasonableness governed the application of Section 1. The Sherman Act “stands on its own terms without reference to the Common Law,”