The Washington herald., 1911-12-06

prices. IL is true thdt many theorists,
and others engaged in business violating
the statute, have hoped that somc such
line could be drawn by courts, but no
court of authority has ever attempted it,
Certainly there is nothing in the deci-
slons of the latest two cases from which
such dangerous theory of judicial dis
cretion in enforcing this statute can de-
rive the slightest sanction.
Force and Effectiveness of Statute
n Matter of Growth.
We have been twenty-one years making
this statute effective for the purposes
for which it 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 err
ror of that judgment was corrected. and
only in the last three or four years has
the heavy hand of the law been laid
upon the great illegal combinations that
have exercised such an absolute domin-
ion over many of our industries. Grim
inal prosecutions have been brought and
a number are pending. but juries have
felt averSe to COnViCting for Jail SEN
fences. and judges have been most re-
luctant to impose such sentences on men
of respectable standing in society whose
onense has been regarded as merely
statutory. Still as the offense becomes
better understood and the committing
of il partakes more of studied and de-
liberate defiance of the law, we can be
confident that juries will convict indi-
Nduals and that Jail sentences will be
imposed.
The Remedy in Equity by DissoIu-
tiOn.
In the Standard Oil cnee the Supreme
and Circuit courts found the cOmblna-
tion to be a monopoly of the interstate
business Of refining, Transporting. and
marketing petroleum and its products.
erected and maintained through thirty
seven different corporations the stock
OF which was held by New jersey COM
pany. 1t in effect commanded the dis
solution of this combination. directed the
transfer and pro rata distribution by the
New Jersey company of the stock held
by it in the thirty-seven corporations to
and among it's stockholders. and the cor
0oration and individual defendants were
'nJoined from ConSpirinE or combining
to restore such monopoly: and all agree
nents 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
had been engaged in a success
Tul effort to acquire complete dominion
over the manufacture sale and distribu-
lion Of tobacco in this country and
abroad. and that this had been done by
made with a purpose and
fleet to Stife competition. control prices. !
nd establish monopoly, not only in the !
manufacture of tobacco. but also of |
in-foil and IicoriCe used in its manu- |
Of ifg Of
'lgnrettes. and snuffs. The tobacco suit !
Il far more complicated and /
iitiCult case than the Standard Oil suit |
or decree which would effeCtuate the |
NIL Of the court and end the violation /
If the statute. There was here no single !
lolding company as in the case of the /
standard Oil trust. The main company /
was the American Tobacco Company, a |
selling. and holding COM
'any The plan adopted to destroy the !
and restore competition in !
-Olved the redivisiOn Of the capital and |
'lants of the whole trust between some
# the companies constituting the trust
md new companies organized for the .
purposes of the decree and made parties !
o it, and numbering new and old, four
cen.
Situation After Readjustment.
The American Tobacco Company (old).
eadjusted capital. So. 900. 900: the Liggett
Meyers Tobacco Company new. cap
tai, So ,000.o00: the p LoriIlard Company
new. capital. S47.OOO.nOO: and the r. J,
REYNOLDS Tobacco Company (Old). capi-
al, $,525.00O, are chiefly engaged in the
manufacture and sale of chewing and
mokinE tobacco and cigars. The for
1er one tin-foil company is divided into
wo, one of $500 capital and the other
( 100000 The one snuff company is
Ivided into three companies. one with
capital of Sl5.OO0,C0O, another with a
apital of $S0GOOcO. and A third with a
apital of S.0O0,0OO. The licorice COM
anieS are two. one with a CapitaI Of
}, ',15S,3OO, and another with a capital Of
100000 There is. also, the British
meriCan Tobacco Company, British
orPoration. doing business abroad with L
capital of S26,0OO,000, the Porto Rican
ohaccO Company, with a capital of
,SOO,OO. and the corporation of United
lGar Stores, with a capital of 50, OO0 100.
nder this arrangement, each of the
inerent kinds of business will be dis ,
'tbuted between two or more companies !
18th division of the prominent brands ,
the same tobacco products, so as to !
lake compC tition not only possible but
Thus, the smoking-tob
lsiness of the country is divided so that $
lie present independent companies have $
80 per cent. while the American To- {
acCO Company will have S3.0S per cent, {
le Liggett & Meyers 2O.O5 per cent. the (
orillard Company 22.S2 per cent. and the 7
eynolds Company 2.56 per cent The j
ock Of the other thirteen companies,
9TH preferred and common, has been
ken from the defendant American To-
lCcO Company and has been distributed
nOng its stockholders. All covenants
competition have been de-
ared null. and further performance of G
em has been enjoined. The preferred
ock of the different companies has now a
zen given voting power which was de- ?
ed it under the old organization. The c
ito of the preferred stock 10 the COM o
on was As Is to, 40. This constitutes a a
ry decided change in the character of o
e ownership and control of each COM d
my. v
In the original suit there were twenty a
ne defendants who were charged with e
ing the conspirators through the Illegal
mbination acquired and exercised its
lawful dominion. Under the decree
ese defendants will holds amounts of
ock in the various dstributee COM 4,
nies ranging from a per cent as a /" ""
aNimum TO 2Sh per cent as a minimum, u
cept in the case of one small company, b
e Porto Rican Tobacco Company. in fC