Standard Oil was founded in 1870 by John D. Rockefeller and has since become the largest trust or holding company in the United States with a current capital of $110,000,000. The Standard Oil Trust directly owns and controls 34 companies, including local subsidiaries like the Standard Oil Company of New Jersey or the Standard Oil Company of California. Officially, Rockefeller retired 14 years ago, but he remains a major shareholder and titular president. The company will likely be broken up along the lines of their splitting up into the constituent companies with the over-arching trust being dissolved as a corporate entity.
In reaching their decision, led by Chief Justice Edward White, elevated last year after the death of Chief Justice Fuller, the court applied a "rule of reason" to the Sherman Act. Essentially, Standard Oil actions in the petroleum market place were seen as unreasonably restraining trade, though conversely, reasonable restraints on trade would not be considered illegal under the Anti-Trust Act. According to the New York Tribune, the justices state that "the history of the company, the course of its projectors, and the results of their acts clearly establish a purpose to monopolize the trade in petroleum, which monopoly is equally clearly a violation of the intent of the statute." The majority opinion states that the statute leaves "to the court to enforce the public policy embodied in the statute and to exercise its judgement in the case of each particular act brought before it."
Justice John Harlan, a Hayes appointee, while voting with majority in that Standard Oil violated the Sherman Anti-Trust Act and agreed that the company must be broken up, issued a dissenting opinion, stating that the statute sought to remove all restraints on trade, reasonable or undue or not. In his "concurring in part, dissenting in part" opinion, Justice Harlan stated that trusts have sought to restrict the Sherman Act with a "rule of reason" legislative amendment, and now they sought redress through the courts. It is thought that this "rule of reason" will relieve the anxiety of companies who have the appearance of creating a monopoly, but without an intent to create one, they may be able to show that the restraint on trade is reasonable given market conditions.
The NY Tribune lists two main reasons the Supreme Court came to this conclusion, from the White decision:
Because the unification of power and control over petroleum and its products, which was the inevitable result of the combining in the New Jersey corporation, by the increase of its stock and the transfer to it of the stocks of so many other corporations, aggregating so vast a capital, gives rise in and of itself in the absence of countervailing circumstances, to say the least, to the prima facie presumption of intent and purpose to maintain the dominancy over the oil industry, not as a result of normal methods of industrial development, but by new means of combination which were resorted to in order that greater power might be added than would otherwise have arisen had normal methods been followed, the whole with the purpose of excluding others from the trade, and thus centralizing in the combination a perpetual control of the movements of petroleum and its products in the channels of interstate commerce.The Supreme Court, to redress Standard Oil's unreasonable restraint on trade, have ordered that the company be dissolved within six months.
Because the prima facie presumption of intent to restrain trade, to monopolize and to bring about monopolies, resulting from the act of expanding the stock of the New Jersey corporation and vesting it with such vast control of the oil industry, is made conclusive by considering (1) the control of the persons or corporations who are mainly instrumental in bringing about the extension of power in the New Jersey corporation before the consummation of that result and prior to the formation of the trust agreements of 1879 and 1882; (2) by considering the proof as to what was done under those agreements and the acts which immediately preceded the vesting of power in the New Jersey corporation, as well as by weighing he modes in which the power vested in that corporation has been exerted and the results which have arisen from it.
Link: Standard Oil Company Ordered Dissolved; Reasonable Restraint on Trade Not Unlawful [The New York Tribune]
Link: Standard Oil Trust is Ordered Dissolved by U.S. Supreme Court and Must Quit Within Six Months [The Bisbee Daily Review]
Link: Government Wins Sweeping Victory in Standard Oil Case; Union Labor Leaders Still Facing Contempt of Court Proceedings [The Washington Herald]
Link: Interests Regard Standard Ruling Favoring Them [The Washington Times]
Link: Standard Oil Co. of New Jersey v. United States - 1911 [Supreme Court Decision]