The Olneyville times. (Olneyville [Providence, R.I.]) 1887-1917, 1911-12-08
TAKES UP TRUST PROBLEM
Only Matter Touched On In Presidents S
Message to Congress
Additional Legislation to Strengthen Present
Statutes Is Recommended ---Defends Stand
ard Oil and Tobacco Decisions

its unlawful dominion. Under the de-
cree these defendants will hold amounts
OF stock in the various distributee com
panies ranging from Al per cent a
maximum 10 2Sl1 per cent as a minimum,
except In the case or one small company.
the Porto Rican Tobacco company, in
which they will hold 5 per cent The
twenty-nine individual defendants are en-
Joined for three years from buying any
stock except from each other. and the
group is thus prevented from extending
its control during that period. All parties
TO the suit. and the new companies who
are made parties. are enJoined perpetual
ly from In any way efecting any com
bination between any OF the companies
In violation OF the statute by
way OF resumption OF the old trust. Each
or the fourteen companies is enjoined
from acquiring stock in any OF the others.
All these companies are enJoined from
having common directors or officers, or
common buying or selling agents. or com
mon Offices, or lending money TO each
other.
Size of New Companies.
Objection was made by certain inde-
pendent tobacco companies that this set
tlement was unjust because IL left com
panies with very large capital In active
business. and that the settlement that
would be effective 10 put all on an equal
ity would be a division OF the capital and
plant OF the trust into small fractions In
amount more nearly equal to that OF each
OF the independent companies. This con
tention results from misunderstanding
OF the antitrust law and It's purpose.
Ii is not intended thereby TO prevent the
accumulation OF large capital In business
enterprises in which such combination
can secure reduced cost OF production,
iQf
against such an aggregation OF capital
only when its purpose Is that OF sitting
competition, enhancing or controlling
prices and establishing a monopoly. II
we shall have by the decree defeated these
purposes and restored competition be-
tween the large units iSto which the cap
ital and plant have been divided we
shall have accomplished the useful pur-
pose OF the statute.
Confiscation Not the Purpose Of the
Statute.
II is not the purpose OF the statute 10
confiscate the property and capital OF the
offending trusts Methods OF punishment
by fine or imprisonment OF the individual
offenders, by fine OF the corporation, or
by forfeiture OF its goods In transporta-
tion. are provided. but the proceeding in
equity is a specific remedy 10 stop the
operation OF the trust by injunction and
prevent lne future use OF the plduN anu
capital in violation OF the statute.
venture TO say that not In the history
OF American law has a decree more ef-
fectve for such a purpose been entered
by court than that against the Tobacco
trust.
Common-Stock Ownership.
1t has been assumed that the present
pro-rata and common ownership I'm all
these companies by former stockholders
Of the trust would insure a continuance
OF the same old single control OF all the
companies into which the trust has by
decree been disntegrated. This is err
roneous and Is based upon the assumed in
efficacy and innocuousness OF judicial In
functions. The companies are enJOined
from cooperation or combination. they
have different managers. directors pur-
chasing and sales agents. II all or any
OF the numerous stockholders. reaching
into the thousands, attempt 10 secure
concerted action OF the companies with
view to the control OF the market. their
number is so large that such an attempt
could not well be concealed and It's prime
movers and all it's participants would be
at once subject 70 contempt proceedings
and Imprisonment Of "A summary charac-
ter The immediate result Of the present
situation will necessarily be activity by
all the companies under different man
ayers and then competition must follow,
or there will be activity by one company
and stagnaton by another only a short
time Will inevitably lead 20 a change In
ownership OF the stock. az all oppor-
tunitv for continued cooperation must
disappear.
Movement ror Repeal Of the Antitrust
Law.
But now that the antitrust act is seen
10 be effective for the accomplishment OF
the purpose OF It's enactment. we are met
by a cry from many different quarters
for its repeal !, Us said TO be obstructive
OF business progress. 10 be an attempt 20
restore old-fasnioned methods OF de-
structlve competition between small units
and 10 make impossible those useful com
binations OF capital and the reduction OF
the cost OF production that are essential
10 continued prosperity and normal
growth.
In the recent decisions the Supreme
court makes clear that there Is nothing
IN the statute which condemns combina-
tions OF capital or mere higness Of plant
organized % secure economy IN prOduc-
ton and a reduction OF its cost. II is only
when the purpose or necessary effect of
the organization and maintenance ~ the
combination or the aggregation of i'm
nense size are the sitting ~ competition.
actual and potential and the enhancing
that the statute is violated Mere size
Is no sin against the law. The merging
of two or more busines plants necessarily
eliminates competition between the units
thus combined. but this elimination is ln
contraventiOn of the statute only when
the combination is made FOR purpose OF
ending this particular competition in or
der 20 secure control or and enhance.
prices and create monopoly.
Lack OF Oefiniteness In the Statute.
The complaint is made of The statute
that 70 is not sufficiently definite In its
description % that which is forbidden. %
enable business men 90 avoid its viola
ton. The suggestion r.. that We may
have a combination 81 two corporations
which may run on FOR years. and that
subsequently, the attorney general may
conclude that % was a violation % the
statute and that which was supposed by
the coubiners 90 be inocent then turns
,..t % 10 a continuation IN t-fofaf ffon 81