Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1912-11-19
For Government in The
Bath Tub Cases.
U. S. Supreme Court Decides
They Are Restraining Trade
By Unlawful Agreements. Decision
A Basis for Later Prosecutions.


making decision, today, in the So call
ed Bath tub trust case the supreme
coult of the United States laid down
the broad principle, that there can be
no monopoly in the unpatented product
of patented machine. without yiolat-
ing the Sherman antitrust law Jus
tice McKenna delivered the unanimous
opinion of the court.
III accordance with this doctrine the
court struck down as Illegal the Lii
eense agreements by which manu-
faeturers of S. per cent. of the sanitary
enameled iron ware in the United
States We're bound together in combi-
nation. The license agreements allow
ed the manufacturers to use a patent
ed dredger. but only on condition that
they abide by an attached price list.
would not sell to jobbers who bought
from independents. would not sell in
certain territory and would not sell
seconds"
Officials of the department Of jus
tice We're highly elated over the de-
cisioa. which. il is claimed, will have
an important bearing upon several in
yestigations now under way by Attor-
ney General Wickersham, as well as
antitrust suits already filed against
the sc-called moving picture trust
and the United Shoe Machinery Co.
The decision is regarded as vitality
important because of the governments
claim that the Patent license agree
me1t plan was being adopted by
many concerns as result of the jul
diciai ban upon the Pure trust plan
as exemplified in the case of the Stan
dard Oil Co. of Ohio. the holding COM
pany plan as declared invalid in the
Northern Securities case; and the COM
bination Of a holding company and Il
manufacturing company, as shown in
the Standard Oil and Tobacco cases.
Justice Mckenna in his opinion de-
ciared that the effect OF the agreements
was to convert independent and compet-
tive companies into combination sub
jected to rules and regulations.
The trade was practically controlled
from producer to consumer" said he,
and the potency of the scheme was
established by the cooperation OF IS per
cent of the manufacturers, and their
fidelity to it was secured not only by
trade advantages but by what was prac>
tically pecuniary penalty, not inaptly
termed in the agument cash ball.
Today.s decision sustains the decree of
the United States district court for Ma
ryland abrogating the license agree
ments" and payes the way for the re-
trial of the criminal suit against the
bath tub trust" the first trial of which.
at Detroit several months ago, resulted
in a disagreement Of the jury. Attorney
General Wickersham postponed the re-
trial until the issues in the civil suit
were decided by the supreme count. Ed
ward p. Grosvenor. special assistant to
the attorney general. who prosecuted the
case and argued II In the supreme count.
| said, tonight:
| ION the argument in the supreme court
| the main reliance of the defendants was
| the decision in Dick VS. Henry, called
| the Monograph case. rendered by the su-
| preme court last March. There 1t was
| held that the owner of patent on q
| Monograph may compel the purchaser
of the patented Monograph 10 buy from
him, the patentee, all paper and ink
which is to be used on the Monograph al
| though of course the paper and ink are
not covered by the patent.
1.-THE decision of today refused to ex-
| tend tile doctrine of the Dick case to the
unpatented product OF patented ma
chine The defendants In the bath tub
cases owning patents on machines used
| in the manufacture Of enameled ware,
attempted to AK prices and destroy coma
petition in commerce on the unpatented
ware.
1.-THE economic effect of the prosecu-
ton by Attorney General Wickersham
| is interesting The combination COM
/ menced operation in June, 1910. At once
complaints poured into the department OF
Justice. The attorney general commenced
proceedings in July. 1910. Since the COM
binatiou was broken up, the prices OF
the product have fallen from % to 40 per
cent, yet. today nearly all of tile man
ufacturers engaged in the business are
running their factories overtime and they
are all making money at the reduced
prices prevailing In this period " conlpe-
| titlon.'