The herald-advance. (Milbank, S.D.) 1890-1922, 1911-12-08
Only Matter Touched On In Presidents
Message to Congress
Additional Legislation to Strengthen Present
Statutes Is Recommended defends Stand
ard Oil and Tobacco Decisions

Northumberland Tafty annual
message, which was read In both houses
OF congress Tuesday, deals exclusively
with the antitrust statute. The message
In part Is as follows:
To the Senate and House of Represent
Atives: This message Is the first or sew
eral which I shall send to congress during
the interval between the opening of It's
regular session and its adjournment for
the Christmas holidays. The amount OF
Information to be communicated as to
the operations of the government, the
number of important subjects calling for
comment by the executive, and the trans
mission to ngres OF exhaustive re-
ports by special commissions make 1t i'm
possible to include In one message OF a
Reasonable length a discussion Of the top
Yes that ought to be brought to the at
tention OF the national Legislature at It's
hrst regular session.
The Antitrust Law-The Supreme
Court Decisions.
In May last the Supreme court handed
Down decisions in the suits in equity
brought by the United States to enioin
the further maintenance Of the standard
Oil trust and Of the American Tobacco
trust, and to secure their dissolution. The
decisions are epoch-making and serve to
advise the business world authoritatively
OF the scope and operation of the anti
trust law OF 1890. The decisions do not
depart in any substantial way from the
previous decisions Of the court In constru-
ing and applying this important statute,
but they clarity those important decisions
by further defining the already admitted
exceptions to the literal construction of
the act. BY the DEGREES. they furnish a
useful precedent as to the proper method
Of dealing with the capital and property
OF illegal trusts. These decisions sug-
gest the need and wisdom of additional
rr ~ .-t 1o~;r1otl~~ - vol a
easier for the entire business community
TO square with the rule OF action and
legality thus finally established and to
preserve the benefit, freedom and spur
OF reasonable competition without loss OF
real efficiency or progress.
No Change In the Rule Of Decision
Merely In Form Of Expression.
The statute in its first section declares
TO be Illegal every contract, combination
In the form Of trust or otherwise, or con-
spiracy, in restraint of trade or COM
merce among the several states or with
foreign nations" and in the second, de-
clares guilty OF a misdemeanor every per-
son who shall monopolize or attempt to
monopoliZe or combine or conspire with
any other person to monopolize any part
of the trade or commerce of the several
states or with foreign nations"
In two early cases, where the statute
was INVOKED TO tllJoln Il IdlISDp tlp
agreement between interstate railroad
companies, it was held that 1t was no de-
Tense to show that the agreement as to
rates complained of was reasonal at COM
mon law. because it was said that the
statute was directed against all con-
tracts and combinations in restraint OF
trade whether reasonal at common law
or not. 1t was plain from the record,
however, that the contracts complained
of In those cases would not have been
deemed reasonable at common law.
1t has been said that the court, by in
Producing into the construction OF the
statute common law distinctions. has
emasculated It. This Is obviously untrue.
By its Judgment every contract and COM
bination in restraint of interstate trade
made with the purpose. or necessary eff
feet Of controlling prices by sitting COM
petition, or OF establishing in whole or In
part a monopoly Of such trade, Is con-
demued by the statute. The most ex-
IRENE critics cannot instance a case that
ought to be condemned under the statute
which Is not brought within It's terms as
thus. construed.
The suggestion is also made that the Su-
preme court by it's decisions in the last
two cases has committed to the court the
underlined and unlimited discretion to de-
termine whether "a case Of restraint of
trade Is within, the. terms OF the statute.
This is wholly untrue. A reasonable re-
straipt Of trade at common law Is well
understood and is clearly defined. TT does
not rest in the discretion of the court. 1t
must be limited to accomplish the purpose
of a lawful main contract to which, in
order that it,shall be enforceable at all,
It must be incidental. If it exceeds the
needs OF that contract 1t Is void.
The Remedy in Equity by Dissolution.
In the Standard. Oil case the Supreme,
and circuit courts found the combination
to be a monopoly of the interstate busi-
ness Of refining, transporting, and mar
keting petroleum and its products, effect
ed and maintained through thirty-seven
different corporations. the stock of which
was held by a New Jersey 1t
In effect compounded the dissolution Of
this combination, directed the transfer
and ;pro-rata ia. distribution by the New Jer-
sey company of the stock held by 1t in
the thirty-seven corporations to and
among it's stockholders, and the corpora
lions and Individual defendants were en-
toined from conspiring or combining to
restore such monopoly: and all agree
ments between the subsidiary corporations
tending to produce or bring about further
violations OF the act were enjoined.
In the Tobacco case, the court found
that the Individual defendants, twenty
nine in number, had been engaged in a
euccessful effort to acquire complete do
minion over the manufacture. sale. and
distribution Of tobacco in this country
and abroad. and that this had been done
by combinations made with a purpose
and effect to stifie competition. control
prices, and establish a monopoly, not
only In the manufacture OF tobacco, but
also Of tin-foil and licorice, used In its
manufacture and OF its products OF CT
Rars, cigarettes and snufs. The tobacco
suit presentend a far more complicated
and difficult case than the Standard OH
suit for a decree which would efectuate
the will OF the court and end the viola
ton CT the statute. There was here no
single holding company as In the case
Of the Standard Oil trust. The main COM
pany was the American Tobacco com
pany. a manufacturing. selling and hold
ing mpan The plan adopted to de-
stroy tie combination and restore compe-
tition involved the redivisiop OF the capt.
tai and plants Of the whole vrust oetween
some OF the companies constituting the
trust and new companies organized for
the purposes Of the decree and made par
ties to It. and numbering. Lew and old.
fourteen.
= 49, --a-s--H 1911 AA-.> vra~o fvu0nfV-