Arizona republican., 1911-01-02

| restrained and mOnOpOuZed IS Ho' commerce, according to the Tobacco at torneys. It is nothing more than the ! manufacture of an article which later enters into commerce The bulwark behind which the Tobacco organization 1 is making it's 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 former decisions of the supreme court. In that case the court declined to suppress an alleged mo- nOpOly in manufacture of sugar. on the ground that it had authority to proceed only by way of preventing mOnOpOlies in commerce. The tobac- co corporations claim that they are concerned only incidentally in com merce.
 Again the dispute as to what is in cluded in the word commerce" as re ferred to in the sherman antitrust law. arises in connection with the character of holding company. Both the Standard Oil and the Tobacco or ganiZatiOns contend that the power granted by the constitution to regulate interstate commerce is not so exten- sive as to include regulation of the ac- quisitiOn and ownership of a holding company of stock in other corporations. ! The government argues that whenever a holding company necessarily stifles or directly and substantially restricts free competition in commerce the Unit ed States has power to protect such commerce.
 In the contest regarding the answer to the question of What is restraint of trade or cOmmerce2' the first dis pute is over the interpretation of ire straint 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 high CT prices. The corporations urge that combination of producers may mean reduction of expenses and cOnse- quently lower prices.
 The government further contends that the Sherman antitrust law re- fers only to such restraints IS are di- rect and material. one judge in pass ing on the Tobacco case in the circuit court held that the law referred to ev- cry restraint without regard to direct ness or materiality. It is said that this doctrine would stifle legitimate busi- ness. The defendant organizations do not press this argument so much. be- cause they claim in their cases that no direct and material restraint of com merce exists. This claim is based upon the argument that they are engaged principally. not in interstate commerce, as were the railroads in the Northern Securities case. but in the manufacture of goods. which may go into interstate commerce later.
 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 com pany advance the argument that un- der the law it could legally acquire the trade of the world in an article pro- vided it did nothing to prevent others from competing with it. They declare the Standard oil has done nothing to prevent others from competing. Sue cess has come to it. so they claim, be- cause of ''untiring energy, infinite skill, abundant capital and steady reinvest- ment of early profits" The govern ment has piled up volume on volume to support its contention that success was achieved by unfair competition
 The corporation tax cases. eighteen in all. involve entirely different argu- ments. The corporation tax provisions of the Paye-Aldrich tariff act provide for "a special excise tax with respect to carrying on or doing business by corporations. equivalent to one per centum upon the entire net income over and above s5.000."
 Each of the cases was originated in various circuit courts by persons finan- cially interested in the tax not being paid These persons asked the courts to enjoin the payment of the tax by respective corporations because the tax was unconstitutional The validity of the tax was upheld in each case.
 The law is opposed principally on the ground that it attacks the sovereignty of the states by taxing state franchises; that it invades the right to due pro- cess of law by levying a tax on classes fixed arbitrarily: and that it is direct tax not apportiOned among the states, as required by the constitution.
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