The Washington herald., 1906-11-12
,ionono1r and the Government

The action about to be commenced by
the government against the Standard Oil
Company and the proposed inquiry into
the Hartman railroad combination by the
Interstate Commerce Commission suggest
q consideration Of the principles underIy-
ing governmental relations to monopolies
whether of industry, commerce, or trans
portation. Two somewhat different
methods of procedure against monopoIistic
combinations have been advocated by
antitrust writer's and speakers and put
in practice by governmental agencies
One method seeks the destruction of
monopoly by the overthrow or dissolution
of the combination and the rehabilitation
OF the competitive conditions existing
prior 10 the organization Of the monopoly;
while the other method is that Of GOV
ernmental regulation of the monopoly in
order to secure fair dealing and equitable
competition The proceedings against the
Northern Securities Company and the con-
templated action against the Standard
oil Company afford examples of the first
method and railroad rate legislation an
example of the second.
1t may well be asked whether there is
s not a serious waste of public energy. in
dealing with monopoly by means of sep
arate and somewhat antagonistic methods
q II il be proposed to regulate railway
rates and TO fix by statute the relations
OF railways and the public. what differ
ence does it make whether Hartman
owns half a dozen railway systems or all
Of them2 If railways refuse rebates and
treat all their shippers with fairness. of
what consequence is il to the shippers
whether railway policy is dictated by
twenty men or by only two or three?
If the Standard Oil Company sells its
8 products at a reasonable price and re-
frains from strangling its rivals, what
harm is done by the corporate ownership
81 Of fifty subsidiary companies? In word.
does the real objection to combinations of
capital consist in combination or in the
unlawful and extortionate practices which
combination of capital enables capitalists
10 maintain?
The answer to this question, if one
could be agreed upon, would furnish a
safe guide for public policy respecting
monopolies. The government has acted
in certain cases on the theory that a com
bination was in itself dangerous, as tend
ing to stife competition and restrain
trade, but has not always been success
fui IN restoring competitive conditions.
even when the combination was dissolved
In the Northern Securities case, what the
government really prevented was stock
iobbing operation; it has not been able
% estop the operation Of neminally COM
peting railway lines by substantially the
same owners under harmonious policy.
Similarly, the interstate commerce law
oFbids pooling, and traffic associations
nave been broken up by the courts. but it
has been impossible to restore old com
1etitive conditions IN railway manage
nent- So. while the government may be
bic to dissolve the Standard Oil Com
lany. it viii not necessarily follow that
he monopoly itself has been abolished or
hat it win be deprived Of power to injure
r destroy its rivals The corporation will
sqply find some other way of keeping its
ast interests together.
The solution Is more likely 20 be found
government regulation than in destruc-
ion Of monopoly. Instructive examples
such regulation are found in various
ublic utilities. such as telephone and
treet railway service ana the supply Of
ater and Hgh,, where by common con-
ent monopolies are permitted to exist
nder certain restrictions in the public in
crest That governmental control Of