Analysis of Congressional Intent

Sherman views on the policy to be served by antitrust legislation are clear. They appear on the face of the bill he drafted and reported from the committee on finance, S1. Section 1 of that bill declared illegal two classes of “arrangements, contracts, agreements, trusts, or combination”: 1 those “made with a view, or which tend, to prevent full and free competition,” and 2 those “designed, or which tend, to advance the cost to consumer” of articles of commerce. Sherman employed these two criteria of illegality in every measure he presented to the senate.

There is no doubt what the words say. But what do they mean? For those who like the author just quoted work in the tradition of the Chicago school of industrial economics, they mean that Sherman was concerned with the restriction of output.

Though an economist of our day would describe the problem of concern to Sherman differently, as a allocations of resources brought about by a restriction of output rather than one of high prices, there is no doubt that Sherman and he would be talking about the same thing. Indeed, Sherman demonstrated more than once that he understood that higher prices were brought about by a restriction of output.