The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-07-11
THURSDAY. JULY Il, 1907.
The New Way of Fighting Trusts.

INC department OF JUSTICE mas begun
an action against the American Tobacco
Company. under the sherman antitrust
act, with avOwed mis6iv!ngs as TO the
utility and effectiveness Of the proceed
ing. It IS confessed that the tangible re-
suits of similar actions in other cases
have not been extensive, either in the
way Of restoring competitive industrial
conditions or of reducing prices TO the
consumer. In other words. while the de-
partment has been successful IN maintain
ing its actions, in obtaining favorable
verdcts and court decisions, It has not
been able to check in any appreciate
manner the strong modern economic ten
dency TO capitalistio combinations, lead
ing inevitably TO restraint upon freedom
OF competition and 70 mOnopOlistic
methods of production and distribution
On a former occasion The Washing
ton Herald commented on the apparently
inharmonious nature Of the various fea-
lures Of the administrations trust policy.
the President, himself. advocating a con-
structive policy OF stringent regulation IN
his state papers, and the Department Of
Justice attempting, in accordance with his
orders. TO carry out n destructive policy.
This conflict Of legislative with legal
policy is explained. Of course, by the
fact that the President is in duty bound
TO enforce the statutes as he finds them,
though, at the same time, he may disap-
prove their principle, and may seek to
have them altered. Mr.. Roosevelt has
made no secret Of his belief that the Sher-
man antitrust law IS unfortunate IN
some OF its prohibitions and practically
impossible OF enforcement without doing
harm to legitimate industry, and IN his
message OF 1905 he predicted exactly what
would be the consequences Of trying to
enforce that law. We quote a significant
passage:
1T has been misfortune that the national laws
on this subject the regulation Of cororaOns) have
hitherto bsen Of q negative rather than an aflrma-
tive kind and still more that they have in part
sought TO prohibit what could not be effectively
prohibited. and have in part in their prohibitions
confounded what should be allowed and what
should not be allowed Il is generally useless 10 Try
70 prohibit all restraint competition whether this
restraint be reasonable unreasonable ard where
Il is not useless It Is generally hurtful.
Events have shown that it IS not possible ade
quatsy TO the enforcement Of any law Of this
kind BY incessant appeal to the courts The Depart
eDt o. Justice has for the last four years devoted
more attention to the enforcement Of the antitrust
legislation than 70 anything else. Much has been
accomplished, particularly marked has been the
moral effect Of the prosecutions but It IS increas
insy eT1deut that there viii be a very insufficient
beneficial result in the way Of economic change
The successful prosecution Of one device 10 evade
irnr sa7f4 at
complsh the same purpose.
What h needed IS not sweeping prohibition OF
every arrangement. good or bad. which NAV tend 70
restrict competition. but such adequate supervision
and regulation VIII prevent any restriction NJ
competition from being 70 the detriment Of the rub
lie. as we'll as such supervision and regulation as
vii prevent other abuses IN no way connected with
restriction Of competition"
To brace up the weak points Of the anti.
trust law the Department OF Justice has
hit upon a form Of legal action Of a
rather novel and startling character-ap-
plication for a receiver for the affairs of
such corporations as cannot be made TO
conform to the law In any other way
than by placing them in the hands Of a
Federal official empowered to conduct
their business. Should the courts fan In
with the departments new theory as to
the functions and scope Of q receivership.
that It may be employed TO secure the
enforcement Of law, as well as the disso-
luton OF winding up Of the affairs of a
corporation, then the government may be
able to bring about some Of the results
in the way Of economic change that It
has hitherto failed TO accomplish. In fact,
Federal receiverships for recalcitrant
trusts would at once take the process OF
trrst-"busting'' out Of the judicial realm,
and place il IN that Of commerce and in
dustry- The government would step right
into business for itself Il would have
the whole game In its own hands. II eco
nomio changes were not at once forth
coming II would be wholly the fault OF
the Federal receivers. What is there, If
the orders Of tho court permitted. 10 pre-
vent them from reducing prices. as well
as restoring competition?
But after the receiver had performed
his duties. and had been discharged. what
would there be to estop the resumption
IN that particular industry OF the ten
dency TO combination which led 10 its or
ganiZation in the first place? What would
there be 10 prevent the reorganization Of
the dissolved trust on a different basis,
or even on the same basis? The same OBJ
lection applies We think. TO the receiver
ship plan OF lighting trusts az to the