Daily capital journal. (Salem, Oregon) 1903-1919, 1911-12-06


, gett & Meyers 20.O5 per cent, the Loril
, lard company 22-S per cent and thl
Reynolds company 2G6 per cent. Tn,
: stock Of the other thirteen companies
. both preferred and common, has beer
, taken from the defendant American
Tobacco company and has been dis
: tributed among ITS stock holders. Al
covenants restricting competition hay,
been declared null and further per
!. formance Of them has been enioined
The preferred stock Of the different
companies has now been given VOtins
power which was denied it under IN,
old organization The ratio Of the pre-
ferred stock to the common was as 7S
to 40. This constitutes Il very decided
change in the cha racter OF the owner
ship and control or each company
In the original suit there were TWEEN
ty-nine defendants. who were charged
with being the cOnspirators through
whom the Illegal mbinatiOn acquired
and exercised its unlawful dominion
Under the decree these defendants viii
hold amounts Of stock in the various
distributes companies ranging from Al
per cent as ma X imum to 2SL, peI
cent as minimum. except In the case
or one small COmpa ny. the Porto Ricau
Tobacco company. in which they will
hold 40 per cent The twenty-nine in
diVidual defendants are enjOlned for
three years from buying any stock ex
cept from each other. and the group is
thus prevented from extending It's con
troll during that period. All parties to
the suit and the new companies who
are made parties are enjoined perpet.
ually from in any way effecting any
combination between any of the com.
panies in violation of the statute by
way of resumption Of the old trust.
Each of the fourteen companies is en-.
joined from acquiring stock in any of
the Others. All these companies are
enjoined from having common direc-
tors or officers, or common buying or
selling agents. or common offices, or
lending money to each other.
| ~S " WV N~OHpdnlGS
Objection was made by certain in
dependent tobacco companies that this
settlement was unjust because 1t left
companies with very large capital in
active business and that the settle
ment 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 near,
ly equal to that Of each of the indie
pendent companies. This contention
results from a misunderstanding of
the antitrust law and its purpose 1t
Is not intended thereby to prevent the
accumulation of large capital in busi-
ness enterprises in which such com
bination can secure reduced cost of
production, sale and distribution. 1t
Is directed against such an aggrega-
tion of capital only when it's purpose
Is that of sitting competition, enhanc-
Ing or controlling prices and establish
ing monopoly. If we shall have by
the decree defeated these purposes
and restored competition between the
large units into which the capital and
plant have been divided we shall have
accomplished the useful purpose of
the statute.
Confiseation Not the Purpose of the
Statute.
1t is not the purpose of the statute
to contiscate the property and capital
or the offending trusts. Methods of
punishment 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 proceeding in equity is a spe
ciic remedy to stop the operation of
the trust by Injunction and prevent
the future use Of the plant and capital
In violation of the statute.
Effectiveness of Decree.
l venture to say that not in the his
tory of American law has decree
more effective for such n purpose been
entered by court than that against
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-
tion and force it into new forms with
the attendant burdens ought to demon.
strate that the federal antitrust statute
Is drastic statute which accompIishes
effective results, which so long as 1t
stands on the statute books must be
obeyed and which cannot be disobev-
ed without incurring farreaching pen
alties, And, on the other hand, the
successful reconstruction of this or.
ganization should teach that the effect
OF enforcing this statute Is not to de-
stroy but to reconstruct: not TO de.
molish, but to recreate in accordance
with the conditions which the congress
has declared shall exist among the |
people Of the United States"
Common Stock Ownership.
1t has been assumed that the pres.
ent pro rata and common ownership In |
all these companies by former stock.
holders Of the trust would insure
Of the same old single con-
troll Of all the companies into which
the trust has by decree been disinte.
grated. This is erroneous and is based
upon the assumed inefHcacy and innoc.
uouSness of judicial injunctions. The
are enjoined from co-opera.
non or combination; they have differ.
tnt managers, directors. purchasing
and sales agents, If all or many of