Final answer:
The first federal action against monopolies was the Sherman Antitrust Act, signed into law in 1890. It was extensively used by Theodore Roosevelt for trust-busting, leading to significant legal actions against large monopolistic trusts, particularly in the railroad industry.
Step-by-step explanation:
The first federal action against monopolies, signed into law by President Benjamin Harrison and used by President Theodore Roosevelt for trust-busting, was the Sherman Antitrust Act. Passed by Congress in 1890, the act targeted trusts and other large business combinations that restricted trade and interfered with the free market, particularly affecting interstate commerce.
Roosevelt's administration filed 44 antitrust suits under the Sherman Act, including a significant case against the Northern Securities Company that led the Supreme Court to order the dissolution of the monopoly over Northwestern Railroads in 1904. Roosevelt's assertive use of the Sherman Antitrust Act earned him a reputation as a 'trust buster' whose real goal was federal regulation of the companies to protect public interest.
While the act itself faced challenges, including interpretations by a conservative Supreme Court, it laid the foundational federal policy for controlling monopolistic practices. Later laws like the Clayton Antitrust Act of 1914 and the creation of the Federal Trade Commission would build upon the Sherman Act's provisions to further regulate and define unfair competition.