River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1910-01-13


former competitors it has reduced the
probability of excessive competition; and,
third, if the combination has been ex-
tensive enough, and certain methods in
the treatment of competitors and GUS
toners have been adopted, the combiners
have secured a monopoly and complete
control of prices or rates.
A combination successful in achieving
complete control over particular line of
manufacture has frequently been called
a trust" I presume that the derivation
of the word is to be explained by the fact
that usual method of carrying out the
plan of the combination has been to put
she capital and plants of various individ-
tails, firms, or corporations engaged in
the same business under the control of
truasoes.
The increase in the capital. of a bust
ness for the purpose of reducing the
cost of production and effecting economy
in the management has become as essen
tial in modern progress as the change
from the hand tool to the machine.
When therefore, we come to construe
the object of congress in adopting the
so-calIed SHERMAN Antitrust Act in
1890. whereby in the first section every
contract combination In the form of a
trust or otherwise, or conspiracy in re-
straint of interstate or foreign trade or
commerce. is condemned as unlawful and
made subject to indictment and restraint
nv Injunction; and whereby in the Sec
ond section every monopoly or attempt
tn monopoliZe and every combination or
conspiracy with other persons to monopo-
Iize any part of interstate trade or COM
noerce is denounced as illegal and made
subject to similar punishment or re-
straint we must infer that the evil aimed
at was not the mere bigness of the en-
terprise. but it was the aggregation of
canital and plants with the express or
implied intent to restrain interstate or
foreign commerce, or to monopolize it in
whole or in part.
Trust Not Necessarily Bad.
Monopoly destroys competition entire
,v and the restraint of the full and free
o,,era+ion Of competition has a tendency
~ restrain commerce and trade. A COM
hination of persons, formerly engaged in
trade as partnerships or corporations or
otherwise of course eliminates the COM
netition that existed between them; but
the incidental ending OF that competition
is not to be regarded as necessarily a
direct restraint of trade, unless of such
on all-embracing character that the in
tantion and effect to restrain trade are
annarent from the circumstances or are
expressly declared to be the object of
the combination. A mere incidental re-
etraint of trade and competition is not
within the inhibition of the act, but it
is where the combination or conspiracy
or contract is inevitably and directly a
substantial constraint of competition, and
60 a restraint of trade, that the statute
is violated.
The second condition of the act is sup
plement of the first. A direct restraint
of trade such as is condemned in the
first section, if successful and used to
suppress competition, is one of the COM
monest methods of securing a trade
monopoly, condemned in the second
section.
It is possible for the owners of bust
ness of manufacturing and selling useful
articles of merchandise so to conduct
their business as not to violate the in
hibitions of the antitrust law and yet
to secure to themselves the benefit of the
economies of management and of produc-
ton due to the concentration under one
control of large capital and many plants
If they use no other inducement than
the constant low price of their product
and it's good quality to attract custom,
and their business is a profitable one
they violate no law. If their actual
competitors are small in comparison with
the total capital invested, the prospect
of new investments of capital by others
in such a profitable business is sufficient
ly near and potential to restrain them in
the prices at which they sell their prod
uct. But if they attempt by a use of their
preponderating capital, and by a sale of
their goods temporarily at unduly low
prices, to drive out of business their
competitors, or if they attempt, by eX-
elusive contracts with their patrons and
threats of non-dealing, except upon such
contracts or by other methods of a SIM
liar character, to use the largeness of
their resources and the extent of their
output compared with the total output
as means Of compelling custom and
frightening off competition, then they
disclose purpose to restrain trade and
to establish a monopoly, and violate the
act
Law to Suppress Abuses.
The object of the antitrust law was
to suppress the abuses of business of the
kind described. 1t was not to interfere
with a great volume of capital which,
concentrated under one organization, re-
duced the cost of production and made
its profit thereby, and took no advantage
of its size, by methods akin to duress, to
stifle competition with it.
I wish to make this distinction as en-
phatic as possible, because I conceive
that nothing could happen more destruc-
tive to the prosperity of this country than
the loss of that great economy in produce
ton which has been and will be effect
ed in all manufacturing lines by the en-
ployment of large capital under one man
agement. 1 do not mean to say that
there is not a limit beyond which the
economy of management by the enlarge
ment of plant ceases; and where this
happens and combination continues be-
yond this point, the very fact shows in
tent to monopolize and not to economic.
The original purpose of many combina-
tons of capital in this country was not
confined to the legitimate and proper OBJ
loot Of hQ Of
On the contrary, the history of most
trades will show at times feverish de-
sire to unite by purchase, combination,
or otherwise, all the plants in the coun-
try engaged in the manufacture of par
ticular line of goods. The idea was rife
that thereby a monopoly could be eff
fected and a control of prices brought
about which would inure to the profit of
those engaged in the combination. The
path of commerce is strewn with failures
of such combinations. Their projectors
found that the union of all plants did not
prevent competition, especially where
proper economy had not been pursued in
the purchase and in the conduct of the
business after the aggregation was COM
plete. There were enough, however, of
such successful combinations to arouse
the fears of good, patriotic men as to the
result of a continuance of this movement
toward the concentration in the hands of
a few of the absolute control of the
prices of all manufactured products.
Refers to Sugar Trust Case.
The antitrust statute was passed in
1890. and prosecutions were soon begun
under it. In the case of the United States
VS.. knight, known as the sugar trust
case" because of the narrow scope of
the pleadings, the combination sought to
be enjoined was held not to be included
within the prohibition of the act, because
the averments did not go beyond the