Northern Securities Company

Definition

The Northern Securities Company was a short-lived American railroad trust formed in 1901 by E.H. Harriman, James J. Hill, J.P. Morgan and their associates. It was dissolved by the U.S Supreme Court in 1904 as it violated the Sherman Antitrust Act.

Analogy

Imagine if all the major pizza delivery companies in your town decided to merge and control prices together – that's what happened with the Northern Securities Company, but with railroads instead of pizzas!

Related terms

Sherman Antitrust Act: A federal law passed in 1890 that committed the American government to opposing monopolies.

Trusts: These are large business entities formed with intent to monopolize and control market share.

Monopoly: This refers to when a single company or group owns all or nearly all of the market for a given type of product or service.