Abstract
Before passage of the Sherman Act, states sometimes dissolved industrial combinations through the use of quo warranto proceedings. This paper examines the efficacy of one of these results - the breakup of the Chicago Gas Trust in 1889. The breakup had a negligible effect on market structure and performance. Although the dissolution of the Gas Trust reduced the market value of Chicago gas securities by about a third, producers later recouped virtually all of these losses. Also, accounting data indicate that the costs of production did not rise after the breakup. Finally, controlling for industry-wide shocks, gas prices in Chicago did not fall after 1989.
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