Omaha daily bee., 1908-11-16
JUDICIAL VIEWS OF TRUSTS
American Tobacco Decision Shows
Advance Of Courts Position.
INTERPRETING THE SHERMAN ACT
Zach Successive opinion H. More
Sweeping In Character-Conbines
Restricted More and More
in Their scope.

NEW YORK. Nov. iB.-The sweeping
lhAracter OF the recent decision OF the
United States circuit court in declaring the
American Tobacco company 70 De q com
,ination In restraint of trade, IL attracting
yidespread attention in business classes
nd among members OF the legal profess
ion who have given special attention to
the trust question. not so much Tor It's
immediate effect on the allied tobacco In
.erests. but more particularly for It's scope
and effect upon ali classes OF Industrial
combinations engaged In Interstate traffic.
An appeal OF this decision TO the United
States supreme court is now In active pro-
cess OF preparation by counsel in the case.
There has been a series Of judicial in
terpretations OF the Sherman act, both in
the federal, circuit and In the United
states supreme court, but the consensus of
opinion Is that the recent decision In the
tobacco case gives a definiteness and scope
OF Interpretation far beyond any judicial
utterances heretofore made
The full text OF the decision now availa-
bic covering forty-four printed pages, shows
the far reaching nature of this latest ex-
position of the law. II also discloses, in
the language of the Judges, the gradual de-
velopment Of judicial Interpretation OF the
law up to the present time. Judge Coke,
one OF the conourring Judges, stating that
'slnce the knight case against the sugar
refineriesJ the tendency has been con-
SANITY toward a wider scope of the stat
utes."
scope of knight Case.
The Knight case was the first under the
Sherman act to reach the supreme court.
1t was decided in January, 1895, and held
in substance that the combination of a
number OF refineries to manufacture sugar
was not within the act because manufacture
alone is not commerce, and therefore, not
within control Of congress. An examination
Of the numerous decisions since the Knight
case leads to the conclusion, Judge Coke
says. that there has been a general ten
dency towards a broader and more liberal
construction of the statutes. In the North
ern Securities case the ophion reviews all
the prior decision and fofmulates certain
propositions.
Some of these were as follows:
The antitrust act embraces and de-
clares to be Illegal every contract, com
blnation or conspiracy, In whatever" form.
Of whatever nature and whoever may be
the purties to II, which directly or neces-
sarlly operates in restraint of Interstate or
international trade or commerce. The act
is not limited to unreasonable restraint.
but embraces all direct restraint.
The natural effect OF competition is to
increase commerce. and an agreement
whose direct effect Is to prevent this play
OF competition restraints trade and COM
merce. To vitiate such an agreement or
computation IL is not necessary to prove a
total suppression OF trade: 1t IL only essen
tial to show that by its necessary operation
II tends to restrain Interstate or interna-
uonai trade or commerce, or tends to Gre
ate a monopoly in such trade or COM
merce and TO depriye. the public OF the ad-
vantages that flow from free competition. -
Decision Affecting Labor,
In the case OF Leow against Lawler. the
United States supreme court held the sher-
man act applicable to members of labor
organizations who. by means of a boy
colt, were endeavoring to destroy the bust
ness OF a manufacturer of hats. The only
distinction between the Knight case and
the Leow-Lawler case is that, in effect. the
acts complained OF related to the manu-
faoture and sale of sugar. and in the other
TO the manufacture and sale OF hats.
Comparing the foregoing trust decision
with that recently given in the tobacco
case shows the development which has
occurred In the application OF the Sherman
act Judge Lacombe, in his majority opin-
lon defines the status OF the law today as
follows:
"Disresarding various dicta and following
the several propositions which have been
approved by successive ma1orities OF the
supreme court, this language SHERMAN
aep 10 to be construed as prohibiting any
contract or combination whose direct ef.
tect Is to prevent the free play of com.
petition and thus tend to deprive the coun.
try OF the services OF any number of in.
dependent dealers, however small. As thu,
construed the statute is revolutionary. n,
this 1t Is not intended TO imply that tn,
construction Is Incorrect, The act NAV b,
termed revolutionary because before II,
passage the courts had recognized a re
straint OF trade which was held not TO h,
unfair, but permissible, although It oper
ated in some measure to restrain connect
ton.
suppression of Competition.
BY insensible degrees. under the opera
ton of many causes. business, manufactur,
and trading alike has more and more de
yeloped a tendency towards larger an,
larger aggregations OF capital and more ex
ltnsive combinations OF Individual enter
prise. 1t is commended that. under exist
Ing conditions In that way only can produc
ton be increased and cheapened with nev
markets opened and developed. stability Il
reasonable prices secured and industra
progress secured. But every aggregation o
individuals or corporations, formerly inde
pendent, Immediately upon its formatio
terminates an existing competition, whethe
or not some other competition may subs,
Quently arise.
The act, as above construed. pYohibi,