The new era., 1911-06-08
TOBACCO TRUST
MUST ALSO GO
U. s. SUPREME COURT HELD
AMERICAN TOBACCO CO. IN
VIOLATION OF LAW.
USE ''RULE OF REASON
JUSTICE WHITE ANNOUNCED DE-
clsloN WHICH WAS PRAc-
"a TicALLY UNANIMOUS.

Washington-The government won
sweeping victory over the so-called
tobacco trust,' when the Supreme
Court OF the United States held the
American .Tabocco Company and its
allied corporations to be operating in
violation of the Sherman antitrust
law. 9i No.
The trust is held to be combina-
tion in restraint of trade-a monopoly
in violation of the law-by the Su-
preme Court.
The decree affects sixty-five Ameri-
can corporations, two English corpor-
ations and twenty-ninei individual de-
PENDANTS. An opportunity is given the
trusts to, within six months disinte-
crate and ire-create a condition which
will not be repugnant to the law.
The trust is held to, have been gull
ty of intimidation and clearly to have
shown purpose to stifle competi-
ton. c't-'
Chief Justice White announced the
decision, which was practically anani-
nous, although Justice Harlan dis
sented on several points.
BY directing that the combination
be forbidden the privilege of inter-
state commerce. or be placed in the
hands of receiver unless it disinte-
CRATES, in harmony with the law, with
in six or at the most eight months,
the court is regarded to have dealt
with the tobacco corporations more
drastically than with the Standard Oil
Company of New Jersey, the dissolu-
ton of which was ordered two weeks
ago.
Not only has it restrained wrong
fully and unlawfully interstate COM
merce in the eyes Of the court, but
it has attempted to monopolize the
tobacco business.
While the decree was regarded as
unusually severe. at the same time
there was touch of leniency in not
making the combination an outlaw
now"
The various elements of the combi-
nation are to be given an opportunity,
under the supervision of the United
States Circuit Court for the southern
district of New York, OF recreation
SO that there may be brought about "a
new condition which shall be honestly
in harmony with and not repugnant
to the law.
The entire court agreed that the to-
bacco combination violated the Sher-
man antitrust law, but, as before,
Justice Harlan dissented from the re-
90 how
antitrust law SO as to call for the ap-
plication OF the rule Of reason"
In this respect the division of the
court was the same as in the Stand
ard OIL case.
Justice Harlan also took issue with
the rest of the court as to the re-or-
garization of the tobacco company.
IT is regarded now as settled that
the rule of reason" will prevail in
the courts of the land in the inter
probation of the Sherman antitrust
law, at least until the personnel OF the
Supreme Court greatly changes or the
Sherman antitrust law is amended.
In reality the decision was nothing.
less than deliberate exemplification
of the application of the rule OF rea-
son" to "undisputed facts"
From the date Of the organization
of the first combination the court
found that there was purpose to ac-
quire domination and control of the
tobacco trade, not by the mere exer-
ton of the ordinary rights to con.
tract and to trade, but by methods
devised in order to tnonopolize the
trade by driving competitors out Of
business.
James B. Duke and the twenty eight
other individual defendants were held
to be parties to the unlawful combina-
tion
Instead of dismissing the bill as to
the Imperial Tobacco Company. the
so-called British trust and as to the
British-American Tobacco Company,
the creature of the two parent tobacco
trusts" these two corporations
were held to be co-operators in the
unlawful combination. So, too. was the
United Cigars Stores Company. re-
tail organization with stores through
out the country.