From: cramer@optilink.COM (Clayton Cramer)
Newsgroups: soc.history,misc.legal,sci.econ
Subject: Re: Libertarians in WW2 -> antitrust
Date: 19 Nov 92 05:57:35 GMT
Organization: Optilink Corporation, Petaluma, CA

In article <JMC.92Nov17223139@SAIL.Stanford.EDU>, jmc@SAIL.Stanford.EDU (John McCarthy) writes:
> Ted Frank says, and Clayton Cramer replies as follows:
> 
> > We'll even leave aside the argument that the Sherman Act had a positive
> > effect on the economy in its first forty years. 
> 
>      How could it?  Into the 1920s, corporations weren't subject
>      to the Sherman Act -- only unions were.  Remember how the
>      14th Amendment was perverted to find that corporations were
>      "persons", and therefore exempted?
> 
> The Encyclopedia Britannica 14th edition in its article _Petroleum_
> says:
> 
>      In 1900 the total net assets of the Standard organization
>      were listed as $209,408,449.09.  In 1911, as a result of
>      U.S. antitrust legislation, the organization was broken up
>      into more than 30 companies.  Rockefeller resigned as
>      president of the Standard Oil Company (New Jersey), which
>      had been incorporated in 1882 under a slightly different
>      title and which was the holding company for the group.
> 
> Besides that AT&T was prevented from completing its telephone
> monopoly and had to leave telegraphy to Western Union.
> There's more if you want to look for it.
> --
> John McCarthy, Computer Science Department, Stanford, CA 94305

I may have overstated the extent to which the 14th Amendment was
used to vitiate the Sherman Antitrust Act, but not by much.  I
also appear to have been about 10 years off about when it was again
made useful for its intended purpose:
 
	The first case to reach the Supreme Court under the act, 
	_United States_ v. _E.C. Knight Company_ (156 U.S. 1),
	settled in 1895, seriously limited its scope and effective-
	ness.  The American Sugar Refining Company, through contracts
	with four other companies, controlled 94 percent of the
	manufacture of refined sugar in the United States.  The
	government brought an antitrust suit, contending that this
	near-monopoly control of production constituted a restraint
	of trade.[Forrest McDonald, _A Constitutional History of the 
	United States_, (Malabar, FL, Robert E. Krieger Publishing:
	1986), 163]
 
	The decision in the _Knight_ case did not declare the Sherman
	Act unconstitutional, but it limited its applicability mainly
	to railroads.  Indeed, the act was applied to railroads a
	few months later, in a way that surprised many people: to
	stop a strike by a labor union.[McDonald, 164]
 
	Of more immediate importance was the stimulus the _Knight_
	ruling gave to business consolidations...  At the time of the
	_Knight_ decision, there were only a dozen important 
	industrial combinations in America and their total capitalization
	was but half a billion dollars.  By 1904 there were 318
	industrial combinations, representing the merger of 5,300
	separate plants with a total capitalization of more than
	$7 billion...  Truly, the age of big business had dawned.
	[McDonald, 165-166]
 
	Meanwhile, of the forty-three other antitrust actions brought
	by the Roosevelt adminstration, only one resulted in a major
	victory for the government and a significant ruling by the Court.
	[McDonald, 168]
 
McDonald also goes to discuss the continuing successful use of the
Sherman Antitrust Act against labor unions, and how Congress 
eventually clarified the Sherman Act with the Clayton Antitrust
Act and the Federal Trade Commission Act, in 1914.[McDonald, 183]
 
The Sherman Antitrust Act would appear to have been largely 
unsuccessful in breaking up combinations in restraint of trade
until Standard Oil and the American Tobacco Company cases in 1911.
[McDonald, 182]
-- 
Clayton E. Cramer {uunet,pyramid}!optilink!cramer  My opinions, all mine!
"Foxes prefer rabbits with short claws." -- Nadja Adolf
Newsgroups: soc.history