Monday, January 16, 2012

A Century-Old Clawfoot Cartel

In school you and I learned about the era of trusts and monopolies in the late Gilded Age and early Progressive Era. Standard Oil, the Chicago-St. Louis meat packing giants, U.S. Steel, gigantic railroad companies, American Tobacco, and even a group of linseed oil manufacturers. But in the winter of 1912, a rather unusual cartel had been hauled into court and grilled about its anti-competitive practices. In the papers, as here in the January 16, 1912 Ypsilanti Daily Press, it was referred to as the "bathtub trust."

16 manufacturers of bathroom enamelware, led by the Standard Sanitary Manufacturing Co., colluded to arrange to use a set of fixed prices to sell their wares to plumbers. The case went to the U.S. district court in Detroit and eventually to the Supreme Court, which ruled the group's practices illegal under the Sherman Anti-Trust Act.

The Sherman Anti-Trust Act was passed in 1890 to eliminate businesses' collusion to restrict market competition among them and control prices. The Act came into heavy use during this era of trusts, but is hardly irrelevant today. In 2003 the band the String Cheese Incident sued Ticketmaster, claiming that the ticketing giant was violating the Sherman Anti-Trust Act. The case was settled out of court for a settlement and a non-disclosure agreement, perhaps sadly. And thus are linked a contemporary Colorado jam band and the clawfoot tub you remember from your grandmother's house.


Dusty D said...

Note: the February Harper's (not yet available online) has an excellent article about our modern-day return to such corporate structures. Scary article, recommended.

Dusty D said...

One small personal data point suggests that there were even small-scale trusts. My husband's great-grandfather manufactured ornate wooden bar furnishings and billiard tables in Chicago. His ads and catalog prominently proclaim, "NOT A MEMBER OF THE TRUST!" So apparently there was even a trust of manufacturers of bar furnishings and pool tables (!?).