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The Commoner.
VOLUME 11, NUMBER 48
PRESIDENT TAFT'S MESSAGE
(Continued from Pago 7.)
purposes and restored competition
between the large units into which
tho capital and plant have been
divided, we shall have accomplished
the usoful purpose of the statute.
It is not tho purpose of the
statute to confiscate the property and
capital of tho offending trusts.
Methods of punishment by fine or
imprisonment of the individual
offenders, by fine of tho corporation
or by forfeiture of Its goods in trans
portation, are provided, but tho pro
ceeding in equity is a specific remedy
to stop the operation of the trust by
Injunction and prevent the future
use of tho plant and capital in viola
tion of the statute.
Effectiveness of Decreo
I venture to say that not in the
history, of American law has a de
cree' more effective for such a, pur
pose been entered by a court than
that against the Tobacco trust. As
Circuit Judge Noycs said in his
Judgment approving tho decree:
"The extent to which it has been
necessary to tear apart this combi
nation and force it into now forms
with the attendant burdens ought to
demonstrate that tho federal anti
trust statute is a drastic statute
which accomplishes effective results;
which so long as It stands on the
statute books must be obeyed, and
which can not be disobeyed without
incurring" far-reaching ponalties.
And, on the other hand, the success
ful reconstruction of this organiza
tion should teach that the effect of
enforcing this statute is not to
destroy, but to reconstruct; not to
demolish, but to re-create in accor
dance with the conditions which the
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shall exist
the United
congress has declared
jimontr the neonle of
States."
Common-Stock Ownership
It has been assumed that the
present pro rata and common owner
ship in all these companies by former
stockholders of the trust would in
sure a continuance of the same old
single control of all the companies
into which the trust has by decreo
been disintegrated. This is erron
eous and is based upon the assumed
ineffieacy and innocuousness of judi
cial injunctions. The companies are
enjoined frem co-operation or com
bination; they have different manag
ers, directors, purchasing and sales
agents. If all or many of the nu
merous stockholders, reaching into
the thousands, attempt to secure con
certed action of the- companies with
a view to the control of the market,
their number is so large that such
an attempt ceuld not well be con
cealed, and its prime movers and all
its participants would be at once
subject to contempt proceedings and
imprisonment of a summary charac
ter. The immediate result of the
present situation will necessarily be
activity by all the companies under
different managers, and then compe
tition must follow, or there will be
activity by one company and stag
nation by another. Only a short time
will inevitably lead to a change is
ownership of the stock, as all oppor
tunity for continued co-operation
must disappear. Those critics who
speak of this disintegration in the
trust as a mere change of garments
have not given consideration to the
inevitable working of the decree and
understand little the personal danger
of attempting to evade or set at
nan eh t the solemn injunction of a
I court whose object is made plain by
the decree and whose inhibitions are
set forth with a detail and compre
hensiveness unexampled in the his
tory of equity jurisprudence.
Voluntary Reorganizations of Other
Trusts at Hand
The effect of these two decisions
has led to decrees dissolving the com
bination of manufacturers of elec
tric lamps, a southern wholesale
grocers' association, an interlocutory
decree against the Powder .trust with
directions by the circuit court com
pelling dissolution, and other combi
nations of a similar history are now
negotiating with the department of
justice looking to a disintegration by
decree -and reorganization in accor
dance with law. It seemsposeible to
bring about these reorganizations
without general business disturbance.
Movement for Repeal of the Anti
Trust Iav
a
But now that the anti-trust act is
seen to be effective for the accom
plishment of the purpose of its enact
ment, we are met by a cry from many
different quarters for its repeal. It
is said to be obstructive of business
progress, to be an attempt to restore
old-fashioned methods of destruc
tive competition between small units,
and to make impossible those useful
combinations or capital ana the re
duction of the cost of production
that are essential to continued pros
perity and normal growth.
In tho recent decisions the supreme
court makes clear that there Is noth
ing in the statute which condemns
combinations of capital or mere big
ness of plant organized to secure
economy in production and a reduc
tion of its cost. It is only when the
purpose or necessary effect of the
organization and maintenance of the
combination or the aggregation of
immense sizo are tho stifling of com
petition, actual and potential, and
the enhancing of prices and estab
lishing a monopoly, that the statute
is violated. Mere size is no sin
against the law. The merging of two
or more business plants necessarily
eliminates competition between tho
units thus combined, but this elimi
nation is in contravention of tho,
statute only when the combination is
mado for purpose of ending this par
ticular competition in order to secure
control of, and enhance, prices and
create a monopoly.
Lack of Dcflnitencsa in the Statute
The complaint is made of tho
statute that it is not sufficiently defi
nite In its description of that which
is forbidden, to enable business men
to avoid its violation. The sugges
tion is, that we may have a combi
nation of two corporations, which
may run on for years, and that subse
quently the attorney general may
conclude that it was a violation of
the statute, and that'which was sup
posed by the combiners to be inno
cent then turns out to be a combina
tion in violation of tho statute. The
answer to this hypothetical case is
that when men attempt to amass
such stupendous capital as will
enable them to suppress competition,
control prices asd establish a monop
oly, they know the purpose of their
acts. Men so not do such a thing
without having it clearly in mind.
If what they do is merely for the
purpose of reducing the cost of pro
duction, without the thought of sup
pressing competition by use of the
bigness of the plant they are creat
ing, then they can mot bo convicted
at the time the union is made, nor
can they be convicted later, unless it
happen that later om. they conclude
to suppress competition and take the
usual methods for doing so, and thus
establish for themselves a monopoly.
They can, in such a case, hardly com
plain if the motive which subse
quently is disclosed is attributed by
the court to the original combination.
New Remedies Suggested
Much is said of the repeal of this
statute and of constructive legisla
tion intended to accomplish the pur
pose and elaze a clear path for honost
merchants aad business men to fol
low. It may bo that such a pi as will
be evolved, but I submit that the dis
cussions which have been brought
out in recent days by the fear of
the continued execution ef the anti
trust law have produced nothing but
glittering generalities and have
offered no line of distinction or rule
of action as definite and as clear as
that which the supreme court itself
lays down in enforcing the statute.
Supplemental Iegislatiom Needed
Not Repeal er Amendment
I see no objection and indeed I
can bo decided advantages in tho
enactment of a law which shall
describe and denounce methods of
competition which are unfair and are
badges of the unlawful purpose de
nounced in the anti-trust law. The
attempt and purpose to suppress a
competitor by under-selling: him at a
price so unprofitable as to drive him
out of business, or the making of
exclusive contracts with customers
under which they are required to give
up association with other manufac
turers, and numerous kindred
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