that time when corporations were in
their infancy and big combinations unknown, there was no difficulty
in exercising the power granted. In theory, the right of the Nation
to exercise this power continued unquestioned. But changing conditions
obscured the matter in the sight of the people as a whole; and
the conscious and the unconscious advocates of an unlimited and
uncontrollable capitalism gradually secured the whittling away of the
National power to exercise this theoretical right of control until it
practically vanished. After the Civil War, with the portentous growth
of industrial combinations in this country, came a period of reactionary
decisions by the courts which, as regards corporations, culminated in
what is known as the Knight case.

The Sherman Anti-Trust Law was enacted in 1890 because the formation of
the Tobacco Trust and the Sugar Trust, the only two great trusts then
in the country (aside from the Standard Oil Trust, which was a gradual
growth), had awakened a popular demand for legislation to destroy
monopoly and curb industrial combinations. This demand the Anti-Trust
Law was intended to satisfy. The Administrations of Mr. Harrison and Mr.
Cleveland evidently construed this law as prohibiting such combinations
in the future, not as condemning those which had been formed prior
to its enactment. In 1895, however, the Sugar Trust, whose output
originally was about fifty-five per cent of all sugar produced in the
United States, obtained control of three other companies in Philadelphia
by exchanging its stock for theirs, and thus increased its business
until it controlled ninety-eight per cent of the entire product. Under
Cleveland, the Government brought proceedings against the Sugar Trust,
invoking the Anti-Trust Law, to set aside the acquisition of these
corporations. The test case was on the absorption of the Knight Company.
The Supreme Court of the United States, with but one dissenting vote,
held adversely to the Government. They took the ground that the power
conferred by the Constitution to regulate and control interstate
commerce did not extend to the production or manufacture of commodities
within a State, and that nothing in the Sherman Anti-Trust Law
prohibited a corporation from acquiring all the stock of other
corporations through exchange of its stock for theirs, such exchange
not being "commerce" in the opinion of the Court, even though by such
acquisition the corporation was enabled to