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 , or at least the “promise and potency” of great advantage to all concerned. There is also, however, the possibility of abuse and therefore of evil, and this possibility was more than once realized. Great business combinations, or trusts as they came to be called, unjustly and unwisely used their power to prevent competition and to compel retail establishments to purchase supplies from them alone. About 1890 such practices became so marked and so offensive as to cause a widespread demand for their abatement and prevention. The result was the enactment in that year by the Republican Congress and President of the so-called Sherman Anti-Trust act forbidding the making of contracts in restraint of trade or commerce.

This beneficent act was at first held, notably by a Supreme Court decision in 1895, not to apply to manufacturing concerns but only to interstate commerce, and its utility was not as great as had been anticipated. But during the administration of President Roosevelt, in 1902, an attempt was made to have the act more liberally construed, so as to apply its prohibition to the “holding company” principle. The government selected as the object of its attack the Northern Securities Company, a trust incorporated in New Jersey for the purpose of purchasing and holding the stocks of two competing railroad systems in the northwest, the Great Northern and the Northern Pacific. It would not have been permissible for one of these roads to purchase and control the other, so it was sought to reach the same end by having a third corporation purchase them both. The government prosecuted the case with much vigor and won a sweejingsweeping [sic] victory which not only nullified the Northern Securities Company but also established a