El Paso herald. (El Paso, Tex.) 1901-1931, 1911-12-05

as to rates complained Of was reasone-
bic at common law. because it was said
that the statute was directed against all
contracts and combinations in restraint
of trade whether reasonable at common
law or not 1t was plain from the rec
ord however that the contracts COM
planned of in those cases would not
have been deemed reasonable at COM
mon law. In subsequent cases the court
said that the statute should be given
q reasonable construction and refused
to include within its inhibition, certain
contractual restraints OfGt trade (which
1t denominated as incidental or as in
direct.
These cases Of restraint Of trade
that the court excepted from the OPP
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aad Tobacco cases, therefore, the court
merely adopted the tests Of the common
law, and in defining exceptions to the
literal application of the statute, only
substituted for the test Of being Incl
dental or street. that OF beng reasona-
Bile, and this, without varying in the
slightest the actuaI scope and effect
of The statute. In cihsr words, all the
cases under The statute which have now
been decided WOLI1 have been decided
the same way If the court had original
" accepted in its construction the rule
at common law.
Does Not Weaken Law.
Itehas been said that the court, by
Introducing into the construction Of
the statute common law distinctions,
has emasculated 1t. This is obviously
untrue By its judgment every contract
and combination in restraint Of inter-
state trade made with the purpose or
necessary effect Of controlling prices
by sitting competition, or Of estab-
fishing in whole or in part monOpO-
" Of such trade, is condemned by the
statute. The most extreme critics can
not Instance a case that ought to be
condemned under the statute which is
not brought within its terms as thus
construed
The suggestion is also made that the
supreme court by its terms in the last
two cases has committed to the court
the underlined and unlimited discretion
to determine whether a case of
restraint Of trade is within the terms
Of the statute. This is wholly untrue.
A reasonable restraint Of trade at COM
mon law is well understood and is
clearly defined It does not rest in the
discretion Of the court. It must be lin
tied to accomplish the purpose Of a
lawful main contract to which, in or
der that II shall be enforceable at all,
it must be incidental. If 1t exceed the
needs of that contract, it is void
The test OF reasOnableness was never
applied by the court at common law to
contracts or combinations or conspira-
cies in restraint of trade whose purpose
was or whose necessary effect would
be to stifle competition, to control
prices, or establish mOnopOlies. The
courts never assumed power to say that
such contracts or combinations or con-
spiracles might be lawful if the par
ties TO them were only moderate in
the use Of the power thus secured and
did not exact from the public too great
and exOrbitant prices. It is true that
many theorists, and others engaged in
business violating the statute, have
hoped that some such line could "a
drawn by courts; but no court of au-
n0.r m at 2 4
" there IS nothing in the decisions Of
the latest two cases from which such
a dangerous theory of judicial discre-
ton In enforcing this statute can de-
rive the slightest sanction.
Jail Sentences.
We have been q years making this
statute effective for the purposes for
which il was enacted The Knight case
was discouraging and seemed to remit
to the states the whole available power
to attack and suppress the evils Of the
trusts. Slowly, however. the errors Of
that judgment was corrected, and only
in the last three or four years has the
heavy hand OF the law been laid upon
exercised such an absolute dominion
over many Of OCr industries. Criminal
have been brought and a
number are pending, but juries have felt
averse to convicting for Jail sentences,
and judges have been most reluctant
to impose such sentences on men Of re-
spectacle standing in society whose Of
fence has been regarded as merely stat
utory. Still as the offence becomes
better understood and the committing
OF It partakes more Of studied and de-
uberate defiance Of the law, We can be
confident that juries will convict in
dividuals and that Jail sentences will be
imposed.
The Remedy BY Dissolution.
In the Standard Oil case the supreme
and circuit courts found the combina-
ton to be monopoly Of the interstate
business Of refining, transporting and
marketing petroleum and its products,
effected and maintained through 81 diff
ferent corporations, the stock Of which
was held by New Jersey company. It
in effect commanded the dissolution OF
this combination, directed the transfer
and pro rata distribution by the New
Jersey company Of the stock held by Il
in the 81 corporations to and among its
stockholders; and the corporations and
individual defendants were enjoined
from conspiring or combining to re-
store such monopoly; and all agree
ments between the subsidiary corpora
lions tending to produce or bring about
further violations OF the act were en-
Joined
In the tobacco case, the court found
that the individual defendants. % in
number, had been engaged in a sue
cessful effort to acquire complete do
miniOn over the manufacture. sale and
distribution Of tobacco in this country
and abroad, and that this had been done
by combinations made with a purpose
and effect TO stifle competition, control
prices and establish a monopoly, not
only in the manufacture of tobacco, but
also of tinfOu and ucorice used in its
and Of its products Of ci-
gars, cigarets and snuffs. The tObac-
co suit presented a far more compli.
Gated and difficult case than the Stand
ard Oil suit for a decree which would
effectuate the viii Of the court and end
the violation of the statute. There was
here no single holding company as in
the case of the Standard Oil trust The
main company was the American To-
baccO company a manufa curing, SELL
ing and holding company. The plan
adopted to destroy the combination and
restore competition involved the redi-
vision Of the capital and plants OF the
whole trust between some Of the COM
panies constituting the trust and new
companies organized for the purposes
Of the decree and made parties to il.
and numbering. new and old, a.
Situation After Readjustment.
The American Tobacco company (old),
readjusted capital, $92. 200, 900: the Lig-
gett & Meyers Tobacco company new,
capital S67 OOO 600: the P LoriIlard COM