El Paso herald. (El Paso, Tex.) 1901-1931, 1911-12-05
PRESIDENT TAFT ADVOCATES AMENDING
SHERMAN LAW TO CURB TRUSTS
CONTINUED from Page one,.


try is divided so that the present in
dependent companies have. Zl-SS per
cent while the American Tobacco com
pany will have S3.0S percent the Llg-
gett & Meyers 20.05 percent, the Lorll-
lard cOnDaDv 22S2 percent and the
Reynolds company 2.66 percent. Inc
stock Of the other Is companies, botn
preferred and common, has been taken
from the defendant American ToDacco
company and has been distributed
among its stockholders All covenants
restricting competition have been de-
clared null and further performance OF
them has been enJOined. The preferred
stock OF the different companies has
now been given voting power which
was denied IT under the old organiza-
ton. The ratio Of the preferred stock
to the common stock was 70 to Az. mis-
constitutes a very decided change in
the character of the ownership and
troll Of each company.
In the original suit there were ~
defendants who were charged with be-
ing the conspiratOrs through whom
the illegal combination acquired and
exercised its unlawful dominion I'm
der the decree these defendants will
mold amounts OF stock in the various
Distribute companies ranging from Al
percent as a maximum to % IL percent
as minimum, except in the case OF
one small company the Porto Rican
Tobacco company, in which they viii
hold 10 percent The 29<individual de-
PENDANTS are enjoined for three years
from buying any stock except from
each other, and the group is thus pre-
vented from extending its control dur
ing that period. All parties to the suit,
and the new companies who are made
parties, are enjOined perpetually from
in any way effecting any combination
between any of the companies in VIOLA
ton Of the statute by way Of resump-
ton Of the old trust Each of the IA
companies is enjOined from acquiring
ST IN Of 10
companies are enjOined from having
common directors or officers, or COM
mon buying or selling agents, or COM
mon offices, or lending money to each
other.
Size of New Companies.
Objection was made by certain indie
pendent tobacco companies that this
settlement was unjust because it left
companies with very large capital in
active business, and that the settlement
that would be effective to put all on
an equality would be a division OF the
capital and plant of the trust into small
fractions IN amount more nearly equal
to that Of each Of the independent COM
panies. This contention results from
misunderstanding OF the anti trust law
and its purpose It is not intended I
thereby to prevent the accumulation Of
large capital in business enterprises in I
reduced cost of production, sale ana
distribution. 1t IS directed against
such an aggregation Of capital only
when its purpose is that Of Sitting
competition, enhancing or controlling
prices, and establishing a monopoly. II
We shall have by the decree defeated |
these purposes and restored compett-
ton between the large units into which I
the capital and plant have been divid- |
ed, We shall have accomplished the use
fUl purpose of the statute.
COnfiscatiOn Not Purpose of Statute.
It Is not the purpose of the statute |
aHfr rnfH
the offending trusts. Methods OF pun |
ishment by fine or imprisonment OF the |
individual offenders, by fine Of the [
corporation or by forfeiture of its goods /
in transportation, are provided but the I
prOcC eding in equity is a specific rem /
edy to stop the operation of the trust /
by Injunction and prevent the future use I
Of the plant and capital in violation Of 4
the statute
Effectiveness OF Decree.
venture to say that not in the his |
tory Of American law has a decree |
more effective for such a purpose been !
entered by the court than that against I
the Tobacco trust AS circuit Judge (
Noyes said in his judgment approving |
the decree:
"The extent to which it has been |
necessary to tear apart this combina- /
ton and force 1t into new forms with /
the attendant burdens ought to demon
strate that the federal anti trust stat |
ute IS a drastic statute which accom-
plshes effective results; which so long
as 1t stands on the statute books must |
be obeyeG, and which can not be dis /
ooeyed without mourning far reaching /
penalues And on the other hand, the !
successful reconstruction of this or
ganizatiOn should teach that the effecI !
OF enforcing this statute is not to de- I
stroy, but TO reconstruct; not to de- /
moHsh, but to recreate in accordance /
With the conditions which the con-
gress has declared shall exist among /
the people of the United States"
Common Stock OWnershiu.
1t has bee nassumed that the present !
pro rata and common ownership in all /
these companies by former stockholders |
OF the trust would insure a continuance /
Of the same old single control OF al 4
the companies into which the trust has 1
by decree been disintegrated. This Is /
erroneous and is based upon the as
stunned ineffcacy and innOcuOusness o. |
judicial inJunctiOns.
The companies are enjoined from CO. |
operation or combination; they have
different managers, directors, purchas-
ing and sales agents. II all or many /
Of the numerous stockholders, reaching |
into the thousands, attempt to secure /
concerted action Of the companies with |
a view to the control of the market
their number is so large that such an /
attempt could not well be concealed, |
and its prime movers and all its partic- !
ipants would be at once subject to con-
tempt proceedings and imprisonment Of |
a summary character. The immediate |
result Of the present situation will |
necessarily be activity By all the com /
panies under different managers and !
then competition must follow, or there \
viii be activity by one company ana
stagnation by another Only a short /
time viii inevitably lead to a change in !
ownership of the stock, as all OpDOr- |
tunity for continued cooperation must I
disappear.
Those critics who speak of this inte- i
grafton in the trust as a mere change }
OF garments have not given considera- /
ton to the inevitable working OF the /
decree and understand little the per- |
sOnal danger OF attempting to evade or 4
set at naught the solemn injunction Of 4
a court whose object Is made plain by 4
the decree and whose inhibitiOns are set /
forth with a detail and comprehensive /
piIae nuinkIM |