Presented by Willard Hurst as part of his course "Introduction to Modern American Legal History" at the University of Wisconsin Law School in 1978. Hurst continues his discussion of anti-trust law looking at how legislatures and business used public policy to overcome asset scarcity by ensuring investors about of their investment. In 19th century America, few active investors knew what was going on within the corporation, because managers ran the enterprise. Judge-made law recognized that the stockholder did not have the right to run the business. In the 20th century, the basic legal policy changed as corporation law paid more attention to management. The law began to protect investors' returns, and focused on the oversight of the few managers. Between 1790 and 1890 the federal government had a limited impact on the national economy (an Adam Smith notion of government role) as there was no tradition of legal apparatus in corporate action (U.S. inherited English Law tradition toward corporations). By 1890, Congress reacted to the outgrowth of corporations and passed the Sherman Act. The act proved inadequate and looked dead with the U.S. Supreme Court's decision in E.C. Knight. However, favorable Court rulings, T. Roosevelt's revival of the Sherman Act, and Wilson's addition of the Clayton Act revived government's role in regulation.
