The Clayton Antitrust Act was part of the early 20th-century efforts to curb the power of big businesses. Clayton Antitrust Act APUSH questions focus on the reasons for and impact of this key legislation.
What is the Clayton Antitrust Act?
In the late 1800s and early 1900s, industrial giants grew in the United States largely unchecked. They engaged in unfair business practices such as monopolies, pools, and price fixing. The Sherman Antitrust Act of 1890 was the first piece of legislation to try to deal with this problem. The law was weak, however, and let corporations avoid prosecution through numerous loopholes. Despite the best efforts of trust-buster Theodore Roosevelt to enforce the law, big businesses continued to grow and hinder healthy competition. That’s where the Clayton Antitrust Act came in.
In 1914, Congress passed the Clayton Antitrust Act. It expanded and strengthened the provisions of the earlier Sherman Act, allowing the government to more effectively restrict harmful business practices. It provided a more precise definition of anti-competitive business practices and gave the government more power to enforce the law. The government could now restrict not only monopolies but also certain mergers, holding companies, exclusive dealing, and price discrimination.
Important year to note for the Clayton Antitrust Act:
1914: Clayton Antitrust Act is passed
Why is the Clayton Antitrust Act so important?
The Clayton Antitrust Act was much more effective than the earlier Sherman Antitrust Act and gave the government the power to protect both competition and consumers by restricting certain unhealthy business practices.
What are some historical people and events related to the Clayton Antitrust Act?
- Sherman Antitrust Act: earlier 1890 law that the Clayton Antitrust Act built upon
- Woodrow Wilson: President who signed the Clayton Antitrust Act into law
What example question about the Clayton Antitrust Act might come up on the APUSH exam?
“It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.”
-Clayton Antitrust Act, 1914 (Source)
The legislation above was designed to expand and strengthen which earlier congressional act?
A) Revenue Act
B) Sherman Act
C) Interstate Commerce Act
D) Glass-Steagall Act
The correct answer is (B). The Clayton Antitrust Act gave the government greater power to break up monopolistic corporations than it had under the earlier Sherman Antitrust Act (1890).