The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1911-05-16


of trade or commerce? and What is 1t
to "monopolize?"
What Is Commerce?
Around What is commerce." the
principal fight in the Tobacco case
probably is to be found. The COM
merce which the government claims
is being restrained and monopolized
is not commerce, according to the
Tobacco attorneys. 1t is nothing
more than the manufacture Of an
article which later enters into COM
merce. The bulwark behind which
the Tobacco organization is making its
fight along this line is the famous
knight decision, made even more
famous by the reference to it by
former President Roosevelt last fall
in criticising the decisions of the
Supreme Court. In that case the
court declined to suppress an alleged
monopoly in manufacture of sugar, on
the ground that it had authority to
monopolies in commerce. The to-
bacco corporations claim that they
are concerned only incidentally in
commerce.
Again the dispute as to what is
Included in the word Commerce" as
referred to in the Sherman anti trust
law, arises in connection with the
character of a holding company. Both
the Standard Oil and the Tobacco or
sanizations contend that the power
granted by the constitution to re-
gulate interstate commerce is not so
extensive as to include regulation Of
the acquisition and ownership Of =
holding company of stock in other
corporations. The government argues
that whenever a holding company ne
cessarily STILES or directly and sub.
stantiaily restricts free competition
in commerce, the United States has
power to protect such commerce.
Restraint of Trade.
In the contest regarding the an
swer to the question of What is re-
straint' Of commerce." the first dis
pute is over the Interpretation of
restraint of trade as equivalent to
the absence of free competition. The
government advances the theory that
reduction of competition means a re-
straint on trade and consequently
higher prices. The corporations urge
that a combination of producers may
mean a reduction of expenses and
consequently lower prices.
The government further contends
that the Sherman antitrust law refers
only to such restraints as are direct
and material. One judge in passing
on the Tobacco case in the circuit
court held that the law referred to
every restraint without regard to di-
rectness or materially. 1t is said
that this doctrine would stife legiti-
mate business. The defendant or
CARNATIONS do not press this argu-
ment so much, because they claim
in their cases that no direct and ma
terial restraint of commerce exists.
This claim is based upon the argu-
ment that they are engaged princip-
ally, not in interstate commerce as
were the railroads in the Northern
Securities case, but in the manufac-
ture Of goods, which may go into in
terstate commerce later.
Standard Oil Success.
The third division of the contest is
over the Interpretation of the word
"monopolize" The Standard Oil is
particularly concerned with this phase
of the controversy, because the lower
court found that it was attempting
to monopolize. Attorneys for the
company advance the argument that
under the law it could legally &C
quire the trade of the world in an ar
ticle provided it did nothing to pre-
vent others from competing with it.
They declare the Standard Oil has
done nothing to prevent others from
competing. Success has come to it,
so they claim, because of "untiring
energy, indefinite skill, abundant ca
pital and steady reinvestment of
early profits" The government has
piled up volume on volume to sup
port its contention that success was
achieved by unfair competition.
Corporation Tax Cases.
The corporation tax cases, eighteen
in all, involve entirely different argu-
ments. The corporation tax provi-
sions Of the Payne-Aldrich tariff act
provide for "a special excise tax with
respect to the carrying on or doing
business by corporations, equivalent
tc one por centum upon the entire
net income over and above $4,000"
Each of the cases was originated
in various circuit courts by persons
financially interested in the tax not
being paid. These persons asked the
courts to enjoin the payment of the
tax by respective corporations be-
cause the tax was unconstitutional.
The validity of the tax was upheld in
each case.
The law is opposed principally on