The Washington herald., 1908-03-08
Kentuekv's Trust LegisI.tior

| The embattled tobacco farmers OF Ken
lucky, in their contest with a trust. have
brought about a curious economic and
| political situation in that State. Dis
satisfied with the prices paid by the to-
bacco trust for their output. which they
alleged TO be far too low. the farmers
procured the enactment OF a law an
thorizing the formation Of combinations
to secure higher prices for agricultural
products. notwithstanding the presence
on the statute books of a sweeuin. pro.
hibition OF ali combinations for regulst
/ ing prices. Under the new law the So
ciety of Equity and other associations
were formed TO hold and market to-
baccO- These associations have accumu-
lated immense stocks OF the weed. the
value OF which IS threatened by the
planting OF new crop. as well as by the
marketing Of tobacco by persons oltside
Of the associations. In other words. the
raw tobacco pool gotten up by the Ken
lucky farmers IS in danger OF the same
rate that has overtaken such enter
prises, namely. the breaking OF the mar
ket by underselling or by the competition
Of increased output.
To stave off the evil day. independent
farmers are threatened with the destruc-
ton OF their tobacco stores and OF their
newly planted tobacco beds. So-caued
night riders responsibility for whose
operations IS disclaimed by the respect
able farming element have put these
threats into effect by murder. incendiar-
ism, and lawless destruction OF propertv
In at least one instance the courts were
! resorted to for protection against the
sale OF pooled tobacco, and an injunction
obtained restraining member Of the
pool from disposing Of his product. on the
ground that to do so would jeopardize
the price Of 15OOOOOOO pounds Of unmar
/ keted tobacco. This Injunction would
seem to establish the principle that once
you are In an agricultural trust. Won are
bound TO stay in, and to reverse the old
common-law doctrine that restraint of
trade is in violation Of public policy.
However. the Kentucky Court OF An
peals has upheld the law authorizing ae-
ricultural pools. on the theory that these
pools are formed only for the purposa ~
getting fair and reasonable price for
Iarm products. based on their real value
Combinations formed by manufacturers.
traders and others are presumed 10 be
formed with the object OF obtaining IN
fair. unreasonable. and fictitious prices
As the law permitting agricultural COM
binations TO secure higher prices was an
parently In direct conflict with nrior Iap-
islation forbidding all combinations for
the purpose of fixing or regulating prices
the court was able TO reach its decision
only by assuming that the first mem
toned law does not authorize or nerroIt
pool or combination to enhance the
cost of crops above their real value "
Thus the court reached the conclusion
that any combination is legal which has
for its object obtaining fair and re-
munerative prices" Yet the court was
not altogether certain that this principle
did not apply TO all combinations.
whether agricultural or other. nor was IL
quite assured that the law forbidding all
combinations did rot apply with equal
force 20 agricultural combinations. That
is to say, the status of combinations for
the regulation OF prices is still somewhat
uncertain under the Kentucky law. not
withstanding the opinion OF the court. for
differing and somewhat antagonistic prin-
ciples appear 10 have governed the law
makers in enacting legislation relating to
combinations.
The question raised in the Kentucky
court is the same as that raised by many
objectors 70 the Federal antitrust law.
who say that it ought not to forbid ali
combinations, even all Of those for the
purpose of maintaining prices. for II is
conceivable that in the conduct OF mod
ern business there may be combinations
and agreements in restraint OF trade. and
for the fixing of prices at fair and re-
munerative level. that are in no way