So what led to the great merger wave from 1897 to 1903, if not the tariff? Ironically enough, the antitrust laws may have been a contributing factor. In 1890, Congress passed the Sherman Antitrust Act prohibiting contracts or combinations in restraint of trade. Three key Supreme Court decisions in the late 1890s ruled that cartels, or horizontal agreements to fix prices, were illegal, but mergers that accomplished the same result were legal. By making informal business cartels illegal, the Sherman Antitrust Act may have triggered the mergers that resulted in legal consolidations.85
