The citizen. (Honesdale, Pa.) 1908-1914, 1911-12-06


one-Federal Incorporation Recon-
mended and Federal Corporation
Commission Proposed-The Test Of
"Reasonableness."
To the Senate and House of Repre-
sentatives:
This message is the first Of several
which l shall send to congress during
the interval between the opening Of
its regular session and its adjourn
ment for the Christmas holidays. The
amount of information to be commu-
nicated as to the operations of the
government. the number of important
subjects calling for comment by the
executive and the transmission to con-
gress of exhaustive reports of special
commissions make it impossible to in
clude in one message of a reasonable
length a discussion of the topics that
ought to be brought to the attention
of the national legislature at its first
regular session.
The Antitrust Law-The Supreme
Court Decisions.
In May last the supreme court hand
ed down decisions in the suits in equi-
ty brought by the United States to en-
join the further maintenance of the
Standard Oil trust and of the Ameri-
can Tobacco trust and to secure their
dissolution. The decisions are epoch
making and serve to advise the bust
ness world authoritatively of the
scope and operation of the antitrust
act of 1890. The decisions do not de-
part in any substantial way from the
previous decisions of the court in con-
STRUNG and applying this important
statute, but they clarity those deci-
sions by further defining the already
admitted exceptions to the literal con-
struction of the act. By the DEGREES
they furnish a useful precedent as to
the proper method Of dealing with the
capital and property of illegal trusts.
These decisions suggest the need and
wisdom of additional or supplemental
legislation to make it easier for the
entire business community to square
with the rule of action and legality
thus finally established and to pre-
serve the benefit, freedom and spur of
reasonable competition without loss of
real efficiency or progress.
No Change In the Rule of Decision,
Merely In Its Form of Expression.
The statute in its first section de-
.clares to be illegal "every contract,
combination in the form of trust or
Otharwisa or onpcpironv Il, rae+roi, =
of trade or commerce among the sew
eral states or with foreign nations"
and in the second declares guilty of a
misdemeanor "every person who shall
monopolize or attempt to monopolize
or combine or conspire with any other
person to monopolize any part of the
trade or commerce Of the several states
or with foreign nations"
In two early cases, where the statute
was invoked to enjoin a transporta-
tion rate agreement between inter
state railroad companies, 1t was held
that it was no defense to show that
the agreement as to rates complained
OF was reasonable at common law. be-
cause 1t was said that the statute was
directed against all contracts and COM
binations in restraint of trade, whether
reasonable at common law or not. II
was plain from the record, however,
that the contracts complained of In
those cases would not have been deem
ed reasonable at common law. In sub
sequent cases the court said that the
statute should be given a reasonable
construction and refused to include
within its inhibition certain contrac-
tual restraints of trade which 1t de-
nominated as incidental or as indirect.
These cases of RESTRAINT of trade that
the court excepted from the operation
of the statute were instances which
at common law would have been call
ed reasonable. In the Standard Oil
and tobacco cases, therefore, the court
merely adopted the tests of the COM
mon law and in defining exceptions to
the literal application Of the statute
only substituted for the test of being
incidental or indirect that of being
reasonable, and this without varying
In the slightest the actual scope and
effect of the statute. In other words
all the cases under the statute which
have now been decided would have
been decided the same way If the
court had originally accepted in its
construction the rule at common law.
1t has been said that the court by In
PRODUCING into the construction of the
statute common law distinctions has
emasculated It, This is obviously un'
true By its judgment every contract
and combination in restraint of inter
state trade made with the purpose oil
necessary effect of controlling prices
by sitting competition or of establish
ing in whole or in part a monopoly OF
such trade is condemned by the stat
ute. The most extreme critics cannot
instance case that ought to be con
demned under the statute which is not
brought within its terms as thus con
strued.
The suggestion is also made that the
supreme court by its decision in the
last two cases 'has committed to the