The sun., 1904-06-14
| INalCH Law sHALL PhSYAIis'
.Ihe 6Aerman Act And tho Eakins Acs
Ifrecencilab,e.
From Me Roilody Ace. Z

acts w wh1Ch ,cOmpStlt1On OetWeoU I"bhoo,AD
may be brought about. rsmely. reoatins and
secret rate cutting. While the Federal Govern
ment 10 Anoderating with one hand the bitter
ness Of competition. with the other II ID at-
tempting to break up the relattons OF harmony
which II already has created. While the
Elkins law says that the acts which coDst-
tute real Competition are unlawful. and VIII DO
restrained BY the equity powers OF tho court
ths Sherman law is saying that competi-
tion must be maintained. Anything. 1t says
which tends to restrain competition VIII Dc
regarded as an unlawful thins--any such
agreement win be regarded as void-and the
court will put forth the same equity powers
To render nun and void restrictions on nee
and unlimited competition. In the Trans
Missouri Freight Association case an agree
ment TO apportion freight between paralei
lines was pronounced to be such restraint
on competition. and In the recent decision
of the United States Supreme Court In the
Northern Securitiss merger case the con-
troll OF two parallel lnes by the instrumental
ity of n holding company was declared to be
another restraint on composition Thus the
Sherman law says to the railroad companies:
You must compete. there must be no such
conditions. of harmony or mutually OF m
terests al are involved In pooling Of freight
or Joint control OF the stocks OF parallel lines.
But at the same moment the Elkirs law 10
commanding the road to 50 conduct ts
dealine q With the shipper and with the public.
including rival lines. that competition IN
freight rates shall be eliminated.
A railroad, no more than an individual.
can serve two masters 1t cannot obey the
spirit of tYo laws which are fundamentally at
cross purposes. It cannot live up TO tne !uti
measure Of statute which is framed on the
theory that unrestrained competition Is the
one desideratum. and at the same time be
fully obedient to another which proceeds
on the economic proposition that moderate
restra are necessary and desirable. The
Sherman anti-trust law was framed In ao-
cordanoe with an economic theory WHICH
is summed UP in the saying that "competi-
tion 10 the life Of trade" The Elkins law
was framed in accord with the lessons Of en-
lightened experience. which have taught that
there are other things more to be desired BY
both railroad and shipper than unrestrained
competition In rates. Stability and equality
OF rates. II has been discovered. contribute
more to the prosperity Of shipper and carrier
practtces OF unmodifed competition. Com
petition Of a certain sort may be the life Of
certain trades. but no economist Of modern
schools whose opinion b worth considers
tion will contend that the great natural monop-
olies which constitute the pubic's carrying
facilities are to be treated in all respects like
other business institutions.
stability and equality Of rates the roads must
necessarily run counter to the spirit Of the
law which commands unrestrained strife.
The question inevitably arises. then, as to
which law Is to prevail. And the answer u
suggested by glance at the actual condi-
tions a. they exist. The statute which vio-
lates a superior law Of economics must fail.
The mandate which seeks to compel unre-
strained competition between parallel rail-
way systems has failed. IL failing and will
fall. There IL no human power which can
enforce IT, Neither the Executive nor the
legislative arm Of this or any other Govern
ment can compel such conditions. II two
men purpose to live In peace with one an
other no law can compel them to strive. II
two railroad managers intend to refrain
from competition no powers Of injunction
otherwise. There are in the United States
thousands Of miles Of parallel lneA Of rail-
roads which do not, and doubtless never again
will, compete. The Great Northern and
Northern Pacific systems are not reduced to
composition by the decision on the Northern
Securities Company. The instrumentalty
Of holding company was destroyed by that
decree, but the mutually Of interest in the
two systems was not destroyed. And the
emptiness Of the Governments victory is
made ridiculously apparent by q contenl-
plation Of the alternative which liz brought
into view by the suit Of the Hartman inter-
ests, which. II II succeeds. will result in an
other merger" Of much vaster proportions
than the one attacked by the Government,
In that Il will bring under single control the
Southern Pacific. the Union Pacific. the Ore
gon Short Line. the Burlington and the North
ern Pacific systems. Thus while the COM
bination between tho Great Northern and
tho Northern Pacific roads might be balked
for the time being. the outcome would be
greater combination and a stronger one.
since It would be accomplished by ownership
instead Of mere holding company and be
followed by a much greater extinguishment
of competition. So far as the country at
large is concerned there Is evidently little to
choose between the results Of the two "mer-
gers
The main thing to be kept In view is the
fact that the enforcement OF the Sherman
law and the complete success Of the Federal
Government is an empty victory. 1t accom-
plshes not one iota Of results in the direction
ofthe object sought by the legislation. namely.
lower rates for the shipper,
What theni II the Sherman antitrust
law does not check the general movement
Of railroad systems toward Joint ownership
and cooperative MANAGEMENT. are the COM
mon carriers to be always beyond the pale
Of law and beyond the reach Of reeulative
measures prescribed by the Federal authori-
ties? Not at all. Already the Elkins inter-
state commerce law has demonstrated the
posi- bilities Of reasonable regulation. What
the public is really concerned about is service
and rates. Given these. good. reasonable
and equitable. and the ownership or merging
are not matters In which they have any vital
interest. It Is readily admitted that. with
the extiguishment Of competition by the
econo omio evolution which 10 Welding the rail-
road systems into great harmonious entities
there must be something to take its place
in the regulation Of rates and the supervision
Of the service. Selfish greed could not be
trusted with so great power. But there arc
ways in which the interests Of the public, the
stock owning. the travelling and the con.
sumins public a. well as the shipper. may Be
conserved without attacking the integrity
Of the systems and attempting to split them
up and to drive them back into q condition
which they have outgrown and never more
can resume.
aEement are not necessarily iniifical to the
best service to the public. Combination and
concentration are not necessarily antaRo-
not the enemies Of the public. In the long
run their interests are mutual. SAoe legisla-
tion OF a restrictive character will not be op-
posed by the modern enlightened men who