Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-12-12
Effect Of the Decision in the Addys-
ton Case.
View OF SOLICITOR GENERAL RICHARDS
Will Prevent Restraint of Inter-
state Commerce.
SCOPE OF THE ACT1

solicitor Geaeral John X. Richards, who
argued and won the Addyston pipe trust
case before the Supreme Court for the gov
eminent. was asked today for his views on
the effect and scope of this important case.
Mr. Richards said:
The Addyston Pipe Company case is I'M
portant because 1t is the first in which the
Supreme Court has applied the Sherman
antitrust law TO an industrial combination.
The first case before the court under that
act was the Knight case, the sugar trust
case. In that case it was held that the
creation of monopoly in production did
not necessarily operate as a restraint upon
interstate trade commerce. and it is
only restraint upon interstate commerce
which the antitrust law forbids. The next
two cases were the Trans-Missouri and The
Joint Traffic Association cases. In these
the court held that agreements among in
terstate railways to fix and maintain rates
and fares come within the prohibition OF
the act. In the Hopkins and Anderson
City, were held valid, in the first case he
cause the business Of the members was not
interstate commerce and in the second be-
cause the agreement creating the exchange
put no restraint upon such trade.
Nature of the AddystoD Case.
THE Addyston case grew out of a COM
blnation among six shops located. one in
Ohio, one in Kentucky. two in Tennessee
and two in Alabama, which were engaged
in making cast iron pipe for gas, water
and sewer purposes. These shops con-
trolled the market In that commodity in
thirty-six states west Of the Aileghenies
and south OF Virginia. They entered into
an agreement to control prices by suppress
ing competition among themselves. This
htr Dt,,tt, Sat,t1 tive
board of one from each shop to which all
inquiries for pipe were referred. The board
fixed the price 1t thought the job would
stand. The job was then sold over the
table. the shop which bid the highest bonus
for the benefit of the pool getting 1t. AT
the public letting the shop that got the
job bid the fixed price and the other shops
over-bd in order to deceive the public.
"On behalf of the combination it was
contended that the power Of Congress un-
der the interstate commerce clause, does
not extend TO agreements among private
corporations, but is limited to acts of in
reference by the states and by quasi-public
corporations, such as railroads. Private
manufacturing corporations, it was insist
ed, are not public agencies and cannot be
compelled to keep their shops running or
sell their goods to any person who applies.
In the next place 1t was urged there was
no restraint put upon interstate commerce
and that under the Knight case the creae
ton of monopoly in the manufacture of
a commodity, however useful, is not pro-
bibited by the antitrust law.
Powers of Congress.
THE Supreme Court held, however, that
Congress may prohibit the performance of
any contract between individuals or cor
porations where the natural and direct eff
feet of 1t is to regulate or restrain inter-
state commerce. In other words, the anti
trust law applies to every agreement in
restraint of interstate trade, whether made
by corporations Individuals.
I'm the next place, the court held that
any agreement or combination which d.
recty restraints not only the manufacture
but the sale of commodity among the
several states comes within the antitrust
law. This holding that any agreement or
combination which directly operates not
alone upon the manufacture but upon the
sale of an article of interstate commerce,
by preventing restricting its interstate
sale, is denounced by the Sherman law,
SHOWS how far reaching the act is. The
precise form of the combination is, I take
it, immaterial, If there be "a combination
The Sherman act prohibits every contract,
combination in the form of trust or other
wise, or conspiracy. Whatever the form
of the combination, If it operates directly
to put restraint upon trade or commerce
among the several states it is Illegal
What Must BE Shown.
1.-THE distinction between direct and in
cidental operation is to be observed in all
prosecutions under this act. A trust form
ed for the purpose of monopolizing the
manufacture Of a commodity within the
states may, indirectly and incidentally,
suppress competition in the sale of the
article among the several states. But the
Supreme Courta held in the Knight case
that such indirect and incidental result
would not be sufficient to bring the COM
bination within the reach of the act 1t
must be shown that the combination was
formed not only to monopoliZe the produce
ton of the commodity, but to suppress
competition and enhance prices In its sale
among the several states.
1.-The effect Of the combination upon inter-
state commerce is the essential thing
Interstate commerce consists of inter-
course and traffic between the citizens of
different states, and between the citizens of
portatiOn but the sale and exchange of
commodities. If the natural and direct eff
feet of combination is to restrict the sale
and exchange of a commodity among the
states, suppress competition in such sales
and arbitrarily fix and enhance the price
of things so sold, the Sherman law is
potent to reach and break it up.
Scope of the Act.
"And here l may point out that it is
claimed the act as now interpreted by the
court is in its fundamental provision about
as comprehensive and far reaching as it
can be made. The statute was passed I'M
der the power conferred upon Congress to
regulate commerce with foreign nations and
among the several states The United
States has no constitutional power to in
terfere with the transaction Of ordinary
business within the several states what
ever the nature of the combination which
carries 1t on. To give it such power the
business must directly relate to interstate
commerce. Whenever commerce among
the states Is directly affected and regulated
by a combination, Congress may intervene
and it has done SO by passing the Sherman
act. Every restraint upon such trade or
whether the restraint be reasonable or un-
reasonable. 1t was so held in the Traffic
Association cases.
.'The precise scope and meaning of the
phrase every contract, or combination in
the form of a trust, or otherwise. or con-
spiracy,' has not yet been defined, and some
interesting questions in this connection
may arise in the further enforcement CT the
law re-