The Birmingham age-herald., 1911-12-06

ent Independent companies have 2l.39 per cent, while the American Tobacco com pany will have 3S0S per cent. the Liggett
 X Meyers 20.O5 per cent the Lorillard com pany = S2 per cent, and the Reynolds com
 pany 2.66 per cent. The stock of the other 13 companies, both preferred and common,
 has been taken from the defendant Amer
 ican Tobacco company and has been dis
 tributed among its stockholders All cov-
 enaIrs restricting competition have been
 declared null and further performance of
 chem has been enioined. The preferred
 stock of the different companies has now
 been given voting power. which was
 denied it under the old organization. The
 ratio of the preferred stock to the com
 mon was as IS to 40. This constitutes a
 very decided change in the character of the ownership and control of each com pany.
 In the original suit there were % defend ants, who were charged with being the conspirators through whom the illegal combination acquired and exercised its un- lawful dominion. Under the decree these defendants will hold amounts of stock in the various distributed companies ranging from fl per cent as a maximum to 2S12 per cent as a minimum, except in the case of one small company, the Porto Riean Tobacco company. in which they will hold 45 per cent. The 29 individual defendants are enjoined for three years from buying any stock except from each other, and the group is thus prevented from extending it's control during that period. All par ties to the suit, and the new companies who are made parties, are enjoined per petually from in any way effecting any combination between any of the compa- nies in violation of the statute by way of resumption Of the old trust. Each of the Ii companies is enjoined from acquiring ENz@ aI~ s.. .@f1, companies are enjoined from having com- mon directors or officers, or common buy ing or selling agents or common offices, or lending money to each other.
 Size of New Companies
 Objection was made by certain independ- ent 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 di- vision of the capital and plant of the trust into small fractions in amount more near ly equal to that of each of the independ- ent companies. This contention results from a misunderstanding of the antitrust law and its purpose. It is not intended thereby to prevent the accumulation of large capital in business enterprises in which such combination can secure re- duced cost of production, sale, and distri-
 
 gregation of capital only when it's purpose is that of stifing competition. enhancing or controlling prices and establishing a monopoly If we shall have by the decree defeated these purposes and restored conl- potion getween the large units into whien the capital and plant have been divided. we shall have accomplished the useful purpose of the statute. Confiscation Not the Purpose of the
 Statute
 It is not the purpose of the statute to confscate the property and capital of the offending trusts. Methods of punishment bv fine or imprisonment of the individual offenders, by fine of the corporation or by forfeiture of its goods in transportation, l are provided. but the proceeding in equity 1 is a specific remedy to stop the operation of the trust by injunction and prevent the future use of the plant and capital in vio- lation of the statute.
 Effectiveness of Decree
 I venture to say that not in the his | tory of American law has a decree more effective for such a purpose been entered 1, by court than that against the Tobacco 1 Trust. As Circuit Judge Moves said in his judgment approving the decree:
 'gThe extent to which it has been nec- | essary to tear apart this combination and | force it into new forms with the attend |
  the federal antitrust statute is a drastic | statute which accomplishes effective re- suits; which so long as it stands on the | statute books must be obeyed and which ! can not be disobeyed without mourning far reaching penalties. And, on the other hand, the successful reconstruction of this organization should teach that the effect of enforcing this statute is not to destroy. but to reconstruct; not to demolish, but to ira 70 l. tions which the Congress has declared shall exist among the peope of the United States.
 It has been assumed 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 all the compa- nies into which the trust has by decree | been, disintegrated. This is erroneous and | is based upon the assumed inefficacy and | of judicial injunctions. The | are enjoned from cooperation | or combination; they have different man. agers, directors, purchasing and sales agents If all or many of the numerous | stockholders, reaching into the thousands, | attempt to secure concerted action of the l with a view to the control of the market, their number is so large that 1 such an attempt could not well be con- | cealed and it's prime movers and all its | would be at once subject to l proceedings and imprisonment | of a summary character. The immediate | result of the present situation will neces- | sarily be activity by all the companies un- | der different managers, and then compe- | tition must follow, or there will be activ- | ity by one company and stagnation by an- other only short time will inevitably lead to a change in ownership of the stock as all opportunity for continued CO., | operation must disappear. Those critics who speak of this disintegration in the trust as a mere change of garments have not given consideration to the inevitable working of the decree and understood lit- tie the personal danger of attempting to evade or set at naught the solemn injunc- tion of a court whose object is made plain by the decree and whose inhibitons are set forth with detail and comprehensive ness unexampled in the history of equity Jurisprudence. Voluntary Reorganization of Other
 Trusts at Hand
 The effect of these two decisions has led to decrees dissolving the combination of manufacturers of electric lamps, South | ern Wholesale Grocers' association, an decree against the Powder Trust, with directions by the circuit court compelling dissolution, and other comb.- , nations of a similar history are now ne gotiating with the department of justice looking to a disintegraton by decree and reorganization in accordance with law It seems possible to bring about these reor- ganizations without general business dis turbance. Movement for Repeal of Antitrust l
 Law
 I,t, a