In 1895, however, the Sugar Trust, whose output originally was about fifty-five per cent of all sugar produced in the United States, obtained control of three other companies in Philadelphia by exchanging its stock for theirs, and thus increased its business until it controlled ninety-eight per cent of the entire product.

Under Cleveland, the Government brought proceedings against the Sugar Trust, invoking the Anti-Trust Law, to set aside the acquisition of these corporations.

The test case was on the absorption of the Knight Company.
The Supreme Court of the United States, with but one dissenting vote, held adversely to the Government.

They took the ground that the power conferred by the Constitution to regulate and control interstate commerce did not extend to the production or manufacture of commodities within a State, and that nothing in the Sherman Anti-Trust Law prohibited a corporation from acquiring all the stock of other corporations through exchange of its stock for theirs, such exchange not being "commerce" in the opinion of the Court, even though by such acquisition the corporation was enabled to control the entire production of a commodity that was a necessary of life.

The effect of this decision was not merely the absolute nullification of the Anti-Trust Law, so far as industrial corporations were concerned, but was also in effect a declaration that, under the Constitution, the National Government could pass no law really effective for the destruction or control of such combinations.
This decision left the National Government, that is, the people of the Nation, practically helpless to deal with the large combinations of modern business.