The Washington herald., 1913-02-04
supreme court
QUASHES bills
Prosecution Of Shoe Maehin-
cry Corporation Receives
aSetback. a
ANOTHER SUIT Is LIKELY
Legality Of Leasing System Not Passed
Upon Case, Having to Do with
Indictments Against Officers.

The Federal governments prosecution
Of the United Shoe Machinery Company
as a combination in violation of the
Sherman antitrust law received a set
back at the hands Of the United States
Supreme Court yesterday. The highest
court affirmed the action Of the lower
court in dismissing the indictments
against the officers Of the Shoe Machin-
cry Company.
In its decision the Supreme Court held
| in effect that the United Shoe Machinery
Company Is a combination that In itself
does not constitute q violation OF the
Sherman antitrust law. In rendering
this decision, however, the court did not
pass on the legality OF the leasing sys-
tenn used by the United Shoe Machinery
Company. This Is the system under which
the United company leases its machines
to shoe manufacturers on a royalty
basis. This system afforded ground for
the most serious charges on the part of
the Federal governments action It was
alleged that the Shoe Machinery Com
pany refused to lease its machines to
manufacturers unless they would agree
not to install machines made by any
other concern.
Leasing Not Considered.
The lower court construed the indict-
ment against the officers OF the Shoe
Machinery Company as merely charging
the organization OF the company with
being unlawful, and eliminated the ques-
ton Of the so-called leasing system
The Supreme Court held that the con-
struction placed by the lower court upon
the meaning OF the language in the in
dictment is conclusive on the Supreme
Court, and that It was, therefore, unable
to review this phase Of the case, but
was called upon merely to decide wheth-
er the organization of the company
standing alone in and OF itself consti-
tuted a violation OF the Sherman law.
The action by the Supreme Court ends
the criminal proceedings against officers
OF the United company, unless the gov
eminent should seek to obtain lew in
dictments embodying charges based on
the company's leasing practices. The gen
eral impression Is that this matter VIII
go over to the Wilson administration.
Civil Action Pending.
The government still has a civil action
pending against the United company for
its dissolution as combination IN re-
straint of trade. In order to establish
the case against the big manufacturing
concern, 1t will be necessary for the gov
eminent to rely solely on features OF
the complaint not involved in to-days de-
ciston.
The Department of Justice, in a state
ment commenting on the effect of the
decision. says:
Where the United States takes an sp-
peal in a criminal case, its right in the
Supreme Court is simply to have cor
rected any mistake OF law. which the
lower court may make in constituting a
Federal statute. The United States is
bound by any mistake that the lower
court may make as TO the meaning OF
the indictment So in the present case
the Supreme Court has simply decided
that the tying clauses OF the leases were
not before it. and that the lower court
made no error in holding that the or
Ganization OF the United Shoe Machinery
Company standing alone was not unlaw-
full"
The opinion of the court was delivered
by Justice Holmes, and was unanimous.