Popular belief in the American antitrust policy has long been
based on hostility toward great combinations of capital. The hos-
tility reflected the fear of aggressive suppression of competition
and monopoly control of markets. This attitude was deeply rooted
in the English common law. The Sherman Act embodied these
traditional ideas in federal statute law, but the great merger
movement after 1890 created a feeling that the statute was inade-
quate.

The Merger Movement -- The first industrial combination of
large size was created in 1879 with the formation of the original
Standard Oil trust in Ohio. Several other combinations were
formed in the succeeding decade, using the trustee form of or-
ganization. ¹ At that time, however, close combinations were far
less important than various kinds of loose agreements between
firms on price and output policy. ² This early wave of mergers
continued until the panic of 1893. With the passage of the Sher-
man Act in 1890, the Ohio court decision in the Standard Oil
case dissolving that trust in 1892, ³ and the liberalization of the
New Jersey incorporation law in 1889, ⁴ the form of combination
switched from trust to holding company or a single large corpora-
tion. The period from 1897 to 1904 witnessed the all-time high
rate of formation of important combinations of previously inde-
pendent firms into large corporations or holding companies. ⁵

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