At the end of the XIX century American firms shaped their structure until multidivisional companies and some of them became trusts. Many authors began to be worried about the size that these companies had reached; one of these authors was John Bates Clark. The argument of Clark was the loss of welfare which customers have to bear due to the fact that companies controlled the market, and the price; Jeremiah Jenks, Richard Ely and others made similar argumentation. On the other hand companies' counter-argument was, and even is today, that they need a market large enough to achieve economies of scale.
The internalization of market transactions was the strategy of the majority of American companies at the end of the nineteenth century in order to increase the productivity and reduced the costs. Until 1880 the biggest American firms internalized suppliers of inputs and since 1890 included distribution of consumer goods in the United States, at the same time, the builders of the new retailing enterprises amassed impressive fortunes. As a result the problem of trust became a moral issue, supported by the fact that society wealth has been transferred from customers to richest men around the country.
We tried to shade light about the economic arguments in order to restrain the power of big American companies. These theoretical arguments could be considered as the prelude of American antitrust, in fact, Jenks and Clark mixed diverse economic conceptions as economies of scale, market power, abuse, control of raw materials, etc. with the intention to explain all companies' behavior under one analytical framework worthwhile for any kind of business, industries, distribution companies and so on. Ely's early and continued insistence upon the fact that mere size does not give sufficient advantage to be the basis of a lasting monopoly, and that where there is such monopoly there must be some definite source of monopoly power. Clark's thesis was the only power for evil possessed by most of the trusts was the power of predatory competition.
Jenks had a political interest in prevention monopolizing activities. The relevance of Jenks as economist is his active role changing the American framework of competition. In 1899-1901 Jeremiah Jenks were expert adviser and scholar for the United States Industrial Commission on investigation of trusts and industrial combinations in United States and Europe.; which was a United States government body in existence from 1898 to 1902; it was appointed by President William McKinley to investigate railroad pricing policy, industrial concentration, and the impact of immigration on labor markets, and make recommendations to the President and Congress. By 1898-1900, he was acting, as well, as a principal adviser to New York Governor Theodore Roosevelt, especially in matters of corporations and corporation law. Jenks was particularly active in the movement to expand federal authority. He also helped to draft the Hepburn bill of 1907, which aimed to expand the regulatory powers of the Commissioner of Corporations. Jeremiah Jenks also sat on the four-man committee headed by John Bates Clark which drafted a preliminary version of the 1914 Clayton Antitrust Act.