Evening journal., 1911-12-05

gett & Meyers 2O.O5 per cent the Loril-
lard company 22.s2 per cent and the
Reynolds company 2.66 per cent. The
stock Of the other thirteen companies.
both preferred and common. has been
taken from the defendant American
Tobacco company and has been dis
tributed among Its stockholders. All
covenants restricting competition have
been declared null and further per
formance Of them has been enioined.
The preferred stock Of the different
companies has now been given voting
power which was denied IL under the
old organization. The ratio of the pre-
ferred stock to the common was as 1S
10 40. This constitutes very decided
change in the character Of the owner
ship and control OF each company.
In the original suit there were twen-
ty-nine defendants. who were charged
with being the conspirators through
whom the illegal combination acquired
and exercised its unlawful dominion.
Under the decree these defendants will
hold amounts Of stock in the various
distributee companies ranging from Al
per cent as a maximum TO 2Sls per
cent as a minimum. except in the case
of one small company. the Porto Rican
Tobacco company. I'm which they win
hold 45 per cent. The twenty 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 its 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.
Size Of New Companies.
Objection was made by certain in
dependent tobacco companies that this
settlement was unjust because It 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 inde-
/ 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 bust
ness enterprises in which such a COM
bination can secure reduced cost of
production. sale and distribution. II
is directed against such an aggrega-
tion OF capital only when its purpose
IS that OF stlfing competition. enhanc-
ing or controlling prices and establish
ing a 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.
confseation Not the Purpose Of the
Statute.
It is not the purpose Of the statute
to conhscate the property and capital
of 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-
cifc 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.
venture to say that not in the his
tory Of American law has a decree
more effective for such a purpose been
entered by a 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-
ton and force it into new forms with
the attendant burdens ought to demon
strate that the federal antitrust statute
is a drastic statute which accomplishes
effective results. which so long as II
stands on the statute books must be
obeyed and which cannot be dlsobey-
ed without mourning farreachlng pen
alties. And. on the other hand, the
! successful reconstruction OF this or.
ganization should teach that the effect
Of enforcing this stature 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.
It 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 q
continuance 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 tneficacy and innoc
uousness Of judicial injunctions. The
companies are enjoined from co-opera
tion or combination; they have differ
ent managers. directors. purchasing
and sales agents. If all or many Of
the numerous stockholders. reaching
into the thousands. attempt 10 secure
concerted action OF the companies will
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 fits partic