The Clayton Antitrust Act 1914
Woodrow Wilson (1856–1924)
The Clayton Antitrust Act was passed by Congress in 1914 to clarify and enhance the Sherman Antitrust Act (1890). Large firms were able to take advantage of several loopholes in the latter’s imprecise language, allowing them to engage in certain restrictive business arrangements that, although not unlawful in and of themselves, resulted in concentrations that harmed competition.
Despite the trust-busting actions of Presidents Theodore Roosevelt and William Howard Taft under the Sherman Act, it appeared to a legislative committee in 1913 that big business had continued to grow bigger and that a few persons had the capacity to throw the country into a financial crisis. When President Woodrow Wilson requested a major overhaul of existing antitrust laws, Congress reacted by establishing the Clayton Act.
The Clayton Act made unlawful some commercial activities that are favorable to the establishment of monopolies or that result from them, whereas the Sherman Act merely made monopolies illegal.