The Washington herald., 1911-05-30
COMBINE
HAS SIX MONTHS
FOR DISSOLUTION

mining what restraints are unlawful and
what are within the law.
It was evident that the Wide popular
discussion read by Chief Justice White
in the Standard OH case, in which he
dwelt upon the rule Of reason" and the
insistenoe by members Of the court and
the governments law officers that these
words had been misunderstood. was TO
lead to a further exposition yesterday Of
what the court meant In applying the
words.
Statute strengthened.
I'VE took nothing out Of this statute by
the rule Of reason" said the Chief Justice
yesterday in a discussion Of the words he
used In the Standard Oil case. I'VE gave
to that statute a vivifying potentiality no
honest man may fear"
Further discussing the matter, the Chief
Justice said that a too literal construction
Of the act would be suicidal 80 far as its
main object was concerned.
The decision in the American Tobacco
Company case was fully expected yester-
day. as 1t was the last day Of the term Of
the court preceding the recess for the
summer, and no one expected that this
important case would go over till the fall
term.
Throughout the day the court room was
crowded in anticipation Of the decision
in the tobacco case. The interest was al
most as intense as was shown in the
Standard Oil decision. In addition to
many eminent lawyers IN civil life. there
were present in the court representatives
from both houses Of Congress.
At exactly 4:33 p. m. the Chief Justice
began the reading of the opinion. He
chose to make 1t the final act Of the
court before its summer recess. As soon
as Mr.. White announced that he had the
opinion N the tobacco case the court
room was in disorder. Messenger boys
and reporters went scampering out,
crowding and Jostling.
Court Treats Divisions.
The court divided its investigation Of
the case into three subjects: First, the
undisputed facts: second, the meaning
of the antitrust law and its applica-
ton to the conclusions OF facts, and,
third, the remedies to be applied. Under
the head OF "undisputed facts" the
court said:
Before January. 1890. five distinct
concerns-Allen & Ginter, with factory
at Richmond. Va; W. Duke, Sons & Co.,
with factories at Durham. N. c. and
New York City: W. S. Kimball & Co..
with their factory at Rochester. N. z;
Goodwin & CO.. with factory at Brook
lyn. N. Y.-manufactured. distrib-
uted, and sold in the United States and
abroad 95 per cent Of all the domestic
cigarettes and less than 8 per cent Of
the smoking tobacco produced in the
United States.
There is no doubt that these factories
were competitors in the purchase Of
the raw product, which they manufac-
tured, and in the distribution and sale
OF the manufactured products.
Indeed. 1t is shown that prior to 1880
not only had normal and ordinary COM
petition existed between the factories in
question. but that the competition had
been fierce and abnormal.
In January, 1900. having agreed upon
a capital stock OF 325,000.000, all to be
divided among them. and who should
be directors. the concerns referred to
organized the American Tobacco Com
pany, in New Jersey, for trading and
manufacturing. with broad powers, and
conveyed to 1t the assets and businesses,
including good will and the right to use
the names Of the old concerns, and
thereafter this corporation carried on
the business of all.
The s25.00o.0 900 of stock of the tobacco
company was allotted to the charter
members as follows: W. Allen & Ginter.
s. 100000 preferred. A.6oo,ooo common; W.
Duke, Sons. & Co.. $S.000.0O0 preferred.
A,5oo,O00 common: Kinney Tobacco Com
pany. 100000 preferred. 100000 COM
mon; W. s. Kimball & Co, $1,000, 900 pre-
ferred, s1,500,000 common. and Goodwin
& Co., a.0o0,0o preferred. 81, 100000 COM
mon. -..-r
Stock Watering Charged.
There is a charge that the valuation
at which the respective properties were
capitalized In the new corporation was
enormously in access Of their actual
value. We. however, put that subject
aside. since we propose only to deal with
facts which are not in controversy
The court then took up the construc-
ton and application Of the Sherman anti
trust act as viewed in the light OF the
courts decision OF the Standard Oil case.
1t was this portion Of the decision that
the business world had awaited with
keener interest than the finding af facts
in the tobacco case.
The Chief Justice said:
If the antitrust law Is applicable to
the entire situation here presented and is
adequate to afford complete relief for the
evils which the United States insists that
situation presents, 1t can only be because
that law will be given a more compre-
application than has been, affixed
to it in any previous decision.
This will be the case because the un-
disputed facts, as we have stated them,
involve questions as to the operation of
the antitrust law not hitherto presented
in any case.
Thus, even II the ownership Of stock
no Am orir Tnho 10 in "a
accessory and subsidiary companies and
the ownership Of stock In any Of those
among themselves were held,
as Was decided in the Standard Oil case,
to be a violation Of the act, and all rela-
tions resulting from such stock ownership
were therefore set aside, the question
would yet remain whether the principal
defendant. the American Tobacco Com
pany. and the five accessory defendants.
even when divested Of their stock owner.
ship In other corporations. by reason Of
the power which they would continue to
possess. even although thus stripped.
would amount to . violation Of both the
first and second sections Of the act
Qnestion IN Doubt.
Again, IL 1t were held that the cor
porations, the existence whereof was due
to a combination between such compa-
ton Of the act the question would re-
main whether such of the companies
as did not owe their existence and power
to combinations. but whose power alone
arose from the exercise Of the right to
acquire and own property. would be
to the prohibitions of the act.
Yet further! Even II this proposition
was held in the afarmatlve the question
would remain whether the princtpa; de-