Progressive Movement Practice Exam

Federal prosecutions of companies like Standard Oil were primarily based on violations of what?

1. Stock market practices

2. Environmental regulations

3. Labor union protections

4. Antitrust laws

The correct answer is: Antitrust laws

The correct answer is rooted in the actions taken against monopolistic practices that were prevalent in the late 19th and early 20th centuries. Federal prosecutions of companies like Standard Oil were primarily based on violations of antitrust laws. The Sherman Antitrust Act of 1890 was specifically enacted to combat anti-competitive practices and monopolies that hindered trade and suppressed competition. Standard Oil, led by John D. Rockefeller, was targeted because it had effectively monopolized the oil industry, leading to inflated prices and diminished competition. The government argued that such monopolistic control was harmful to consumers and the economy. This led to significant legal action under the antitrust framework, resulting in the breakup of Standard Oil in 1911 into several smaller companies in order to promote competition and protect consumer interests. In contrast, the other choices focus on different aspects of corporate regulation that were less relevant to the immediate context of the actions taken against Standard Oil and similar companies during the Progressive Era. Stock market practices, environmental regulations, and labor union protections cover important aspects of federal regulation but do not directly pertain to the primary legal grounds for the prosecution of Standard Oil and its ilk, which ultimately centered on the preservation of competitive markets through antitrust legislation.