Omaha daily bee., 1910-01-08
President Taft's Message to the Con
gress On Railroads and Trusts

demned in the second section.
Legal and illegal Methods.
TT is possible for the owners OF a bust
ness Of manufacturing and selling useful
articles OF merchandise 50 to conduct their
business as not to violate the inhibitions
Of the antitrust law and yet to secure to
themselves the benefits Of the economies
OF management and Of production due to
the concentration under one control OF
large capital and many plants. II they use
no other inducement than the constant
low price of their product and its good
quality to attract custom and their busl-
ness is a profitable one, they violate no
law. II their actual competitors are small
in comparison with the total capital in
vested the prospect Of new investments of
capital by others in such q profitable bust
ness is sufficiently near and potential to
restrain them in the prices at which they
sell their products. 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 II they attempt, by
exclusive contracts with their patrons and
threats Of non-dealing except upon such
contracts or by other methods of a similar
character, to use the largeness of their
resources and the extent of their output
compared with the total output as a means
Of compelling custom anf frightening off
Of competition. then they disclose a purpose
TO restrain trade and to establish a mo-
nopoly and violate the act.
The object of the antitrust law was TO
suppress the abuses Of business of the kline
described.
NO Attack on Large Capital.
1T was not to interfere with a great
volume Of capital which, concentrated under
one organization, reduced the cost of pro-
ductlon and made its profit thereby. and
took no advantage of it's size By methods
akin to duress to stltle competition with 1t.
II wish to make this distinction as en-
Dhatic as possible, because L conceive that
fnothing could happen more destructive to
the property Of this country than the loss
Of that great economy in production which
has been and will be effected in all manu-
featuring lines by the employment of large
capital under one management l do not
mean to say that there is not a limit be-
yond which the economy of management,
by the enlargement of plant ceases; and
where this happens and combination con
tinues beyond this point, the very fact
shows intent to monopolize and not to
economize.
The original purpose of many combine
tons OF capital in this country was nnt
confined to the Legitimate and proper, oh.
jeet of reducing the cost of production. Or
the contrary, the history of most tradCc
will show at times a feverish desire to unite
by purchase, combination or otherwise all
the plants in the country engaged In the
manufacture Of a particular kline of goods.
The idea was rife that thereby a monopol,
could be effected and control of prices
brought about which would insure the profit
of those engaged in the combination. I'M.
path of m Is strewn with failures
of such combinations. Their projectors
found that the union of all OF the plants
dill not prevent competition, especially
where proper economy had not been pur-
sued in the purchase and in the conduct
OF the business after the aggregation was
complete. There were enough, however. Of
such successful combinations to arouse the
Tears of good, patriotic men as to the re-
suit Of a continuance of this movement to.
ward the concentration in the hands of a
Few OF the absolute control of the prices
OF all Manufacture ed products.
sugar Trust Decision.
The antitrust statute was passed in
1871 and prosecutions were soon begun un-
DER IT, IN the case OF the Uniteu states
against Knight, known as the sugar trust
SoSS pNNoNSS a ~ hdIlON scope Oh TIE
pieadings, me combination sought to u.
enJulIeu was nelu not ~ De incluueu within
oIe %prohlUiuon VI the act, because lne
= QUESTION OF manufacturing plants for the
. ~rctlnIng OF sugar, ana dIu MT include tina
u u "a ulect ana Intended RESTRAINT uyul
Grade ana in the safe ana us
Avery VI sugar across staCe boundaries Ii
IOreIBn TRACE. Inc result or the Sugal
- rus, case WAS not happy, iii that il CAV,
otner companies ana combinations seeAln,
= slinllur Lnetnou Oh making profit by CO
,auusnIng aI absolute control ana monupI,
III a particular line or manufacture
-ource OF immunity against prosecution
n tne federal Jurlsuicuon, anu where tina
SutlsalcLIoh Is barred IN respect ~ u busl
Nos wIucn IS necessarily conmensura.
"Itn tne boundaries vi the counlly IA
10 sla.e prosecution is abe To supply tn
decided machinery Tor adequate r,s,raln
8 punishment.
r. "PUi.UwIns the Sugar trust decision, how
ri Yer, mere u1Ne IO"4e - Saw "a. cerlal
he course OF JuulciAi disposition cases IN
yo.Slng "a construction UL me antI-tru.
s,atuts ana us dppIcaCOn un.n nov tie
ne seShI 10 embrace every Phase OF that ia
s. " nIch Gan p4acueaiiy DC presented ~ tn
AhiellCdd pdDIlG hIu 10 tne BONernmel
Ar actIOn. Ihey snow mat the antl-tru,
Let mas "a "Iue scope ana apples 10 man
% ~Ou4DIAa,i UHs Ah aUtuai operation, rendeIIu
" .uem unia wlul ana suUJccL ~ InuielInef
=" alu restrain.
al AIeasOlb4DIe' Restraint Not in Law
M "4He supreme Cour. la seyelaI Ok Is u,
~ GlsIUls mas ueCILleu 20 reau into me sLatul
OF eAu WVtu unreIsJhHO.e' U,Iore 'resrralI
~ VI TRACE on lno ground Indl me sl&tu
he apP4Its 10 ali restraints anu does nos 1,
cy .tnu ~ leaNe ~ lue court the uiscreuon
de 4eseruhne wnat Is a reasUnaule restraint
nd trDue. Ine expression restraint OF trau
int 1Ulnes fIUln tns common Jaw, ana IN coz
nd s..n Jaw IueIe we.e CERTAIN covenants l.
To- -u-n,al 10 uhe carry ins Out VI many
tr- -.~ pl.AG4paI CLnuaC,s "nlCn were SAID
ny 80 ", enduts IA partial RESTRAINT vi uau
is .Au Meie neiu 10 DC enIOrcIDis ueuau
to ..-sunaoy auIp,eu 10 me performan
y. tns ludny OF principal Conl.ac.s. al
he unue. Ntne Genera. ldnsuage useu Dy l.
'as supreme courl III seVeraI cases it Won
I'm S-eDa mat even sucn incidental covenan
am ~ resuaInt OF Interstate Laue were WAN
no. ,ne InHIUIIlon OK the statute ana must
v-rusmntu. IN Urder 10 avert sucn u 1
suit 1 nave thought anu saIu tnal Il InIg