A Great Monopoly

"America," Henry Demarest Lloyd wrote in March, 1881, "has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history."

On Friday, Judge Thomas Penfield Jackson announced his court's finding that the Microsoft Corporation is, in fact, a monopoly, as the United States Justice Department contends, and that it has used its monopoly power to hinder competition and innovation in the computer industry. The confrontation between the government and Microsoft, which has been building for years and has received enormous publicity, has tempted commentators to draw comparisons between Microsoft's chairman and the nineteenth century's most famous monopolist, John D. Rockefeller. Whether or not that comparison is apt, the renewed focus on monopoly and antitrust law in the United States offers an opportunity to look back at one of the most influential and controversial articles ever published in The Atlantic Monthly.

John D. Rockefeller

In March 1881, The Atlantic ran a lengthy piece of reporting by the muckraking journalist Henry Demarest Lloyd, titled "Story of a Great Monopoly." Lloyd, a wealthy, foppish radical who once described himself as a "socialist-anarchist- communist-individualist- collectivist-cooperative- aristocratic-democrat," had made a name for himself as a severe and unrelenting critic of Rockefeller and the Standard Oil Company. An eloquent and cogent writer, with a gift for prose that captivated readers, Lloyd was motivated by a crusading passion that in many instances got the better of his journalism. Ron Chernow, in his recent biography of Rockefeller, calls Lloyd a "slipshod reporter," pointing out that the Atlantic article is "marred" by numerous inaccuracies. Nevertheless, the article's significance is incontestable: Chernow and other historians cite it as one of the earliest pieces of progressive muckraking to be published in a national, well-respected magazine—and as the first exposé of the Standard Oil trust to be taken seriously. The issue in which the article appeared sold out seven printings, and it helped bring antitrust legislation to the forefront of national debate, auguring the passage of the Interstate Commerce Act of 1887 and the Sherman Antitrust Act of 1890.

Lloyd built his argument around Standard Oil's collusive manipulation of the railroads, then the lifeblood of the nation's transportation system and thus of the economy. He wrote:

Their great business capacity would have insured the managers of the Standard [Oil Company] success, but the means by which they achieved monopoly was by conspiracy with the railroads.... The Standard killed its rivals, in brief, by getting the great trunk lines to refuse to give them transportation. [The railroad baron] Vanderbilt is reported to have said that there was but one man—Rockefeller—who could dictate to him. Whether or not Vanderbilt said it, Rockefeller did it. The Standard has done everything with the Pennsylvania legislature, except refine it.

Summing up the position in which Standard Oil stood with regard to its competitors and the railroads, Lloyd pointedly observed, "America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history." In a ringing call to arms, he argued that the oil and railroad trust "must be confronted by a power greater than itself," and that "there is but one such power"—the federal government. Lloyd's conclusion is a tour de force of reformist rhetoric:

In less than the ordinary span of a life-time, our railroads have brought upon us the worst labor disturbance, the greatest of monopolies, and the most formidable combination of money and brains that ever overshadowed a state. The time has come to face the fact that the forces of capital and industry have outgrown the forces of our government.... Our strong men are engaged in a headlong fight for fortune, power, precedence, success. Americans as they are, they ride over the people like Juggernaut to gain their ends. The moralists have preached to them since the world began, and have failed. The common people, the nation, must take them in hand.... The nation is the engine of the people. They must use it for their industrial life, as they used it in 1861 for their political life. The States have failed. The United States must succeed, or the people will perish.