Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-07-09
RECEIVERS FOR M0NOPOLIES
Gigantic Power Government Will Be
Able to Weld.
LAWYERS TAKEN BY SURPRISE
In Cases Of the Tobacco and Powder
Trusts, Both Composed Of Hold
ing Companies.

A sensation of magnitude has been
caused throughout the financial and bust
ness world by the exclusive publication in
The Star yesterday, since disseminated
throughout the country, of a new policy to
be pursued toward the trusts by the De-
partment Of Justice. Attorney General
Bonaparte and Milton D. Purdy, trust ex-
pert, have been flooded with inquiries
from all directions as to the accuracy Of
the story. and they have been compelled
to admit It's correctness.
The gigantic power the government
would be able to WELD should it secure re-
ceivers through the courts for giant mo-
nopolies Is quickly apparent. Through
that method 1t would hold a club that
would batter down the strongest combina-
ton, and make further laws against the
trusts unnecessary.
Lawyers Taken by Surprise.
Reports from New York are that the
great corporation lawyers there have
been taken by surprise at the request
the government will make in future trust
actions before the courts and especially
in the cases of the tobacco and powder
trusts. Since it became known that the
Department of Justice was preparing to
proceed against the two trusts infurma-
ton has been reaching the department
that the heads of the two great trusts
have rapidly been trying to wind I'D the
business of the holding COMPANIES Inv
purchasing the subsidiary companies out
right, the business thereby passing into
the hands Of the central company IT ia
to meet just this contingency that the
Department of Justice is preparing to
ask for receivers. Under the decision Of
the supreme Court in the Northern Sc
curities case, holding companies are il
legal The tobacco and powder trusts
are both composed of holding companies
TO avoid hostile decisions of the courts
when the government enters complaint
against the holding companies the two
trusts are hurriedly working toward
combining everything under one com
pany by actual ownership. They will
then pc able to lay before the court the
fact that their businesses are no longer
conducted under the holding company
plan. When they do this the Department
OF Justice will step in with the alIega-
tion that monopoly of any business or
stitution and laws of the land. and that
the only way to do away with it is by
the appointment Of receivers who will
operate the establishment in harmony
with the laws of the country.
1t Is contemplated that the receivers will
handle the business with view of protect
ing both the stockholders and the public,
and that gradually the various plants of tho
trusts will be sold off to independent con-
Germs and operated independently SO as to
bring about and permit competition.
The Injunction End.
The injunction end Of the plan of the pov-
eminent will be utilized should It be annar-
ent that the trusts still continue business
under the holding company plan, as is done
by the Standard Oil and many others. In
the case of the tobacco and powder trusts.
the plan will be to present to the courts the
allegation that these two are oneratins an
violation Of the laws of the country, and
that they should be enjoined from doing
business by means of holding companies.
this Is untrue. the motion for an injunction
would be In order before the courts and, it