The Birmingham age-herald., 1913-06-03
Opinion of Hoar Brought to
Light in Steel Trust
Probe
JUDGE GARY AGAIN
TAKES THE STAN
Comments Upon Opinion Reno eby
Framer of the Shermay,T, Sti-
Trust Law-Lette Is
Produced %

|
! New York, June 2-Evioence that the
late Senator George F. Hoar of hlassa
chusetts, who framed the Sherman anti
trust law, wrote an opinion one year after
its enactment which held that steel man
uiacturers who entered pool agreements
70 nx prices, regulate output and divide
profits could not be convicted under the
law, came to light today at the hearings
or the government dissolution suit against
the United States Steel corporation. The
opinion, written in 1891, at the request of
wire manufacturers who proposed to form
such a pool, was put in evidence by at
torneys for the corporation in connection
with testimony of Judge Elbert H. Gary.
chairman of the corporation, saying that
in the early days of the steel industry It
was supposed by steel manufacturers and
lawyers that pools were legal. Three
years ago pools of wire manufacturers
We're broken up by the government un-
der the law and their members indicted
and fined
Gary Makes Statement
The opinion, Judge Gary said today,
came from the files of Washburn Moen
| q co. of Worcester, Mass, one of the
concerns which participated in one of the
wire pools of the early nineties and for
whom, he said. Senator Hoar acted as
attorney. The witness said he had OBJ
tanned information from the Washburn.
Moen company in 1897 when he was con-
nected with proposition to consolidate
some of the wire concerns. He described
the document as an opinion which
showed the wire companies that lney
! could enter into combination to fix
prices without violating the Sherman
! law"
Il think the contract above proposed
Is reasonable, wrote Senator Hoar in
reference to the proposed pool "and
would be so held by the courts of the
| United States.
The opinion of the courts, like the
opinion of the rest of the community
may vary in different generations as to
| what Is reasonable. Rut the question OF
reasonableness would be question of law
| for the courts to determine, upon all the
facts and in the light of experience Of
the business habits and the public opinion
of the present time. This being my opin-
ion, think the parties to the agreement
above proposed would not be likely to
| be convicted of an offense under the stat
ute of last year.
! No Question of Laws
II am further asked whether it is likely
| that prosecution will be instituted
against them. This is not question OF
| law.
! THE gentlemen who are concerned in
| this business can judge as well as can
La Nl%.~l@t AIxs -
| probable that at some time proceedings
will be instituted which will test this
| question as other similar questions will
| arise under the statute. Whether this
| business would be likely to be selected
! as the object of proceedings for such
test would depend upon the feelings of
their customers or possibly their business
| rivals.
| 81 cannot see any distinction in principle
between a contract of workingmen not
| to work for less than stimplated sum
| as wages, and contract of employers
not to sell their product for less than a
stipulated sum. Both these being intend
ed for their legitimate protection and not
accompanied with an stipulation for un-
lawful, oppressive or fraudulent methods,
| seem to be lawful within the policy of
the law as 1t now exists, and not to be
In restraint of trade, but in advancement
| thereof
4 lHey dh DcHeVcO, Sdlu JuQ&e Gary,
that Senator Hoar's opinion could be
| relied upon"
| The witness admitted. when asked to
| state his own connection with pools, that
some years before the formation Of the
corporation he had signed, In behaf of the
| Illinois Steel company, an agreement with
Andrew Carnegie to divide their rail busi-
ness on so per cent basis, an arrange
| ment In which, he said. other rail manu-
| facturers later participated.
| Il did not consider at the time that
| the rail agreement was illegal" he said.
Thought It All Right
EVERY ybody thought 1t was all right and
so did lawyers. I never made any secret
about 1t with our customers. Later
reached the conclusion that public senti-
| ment, If not the law, was opposed to them
The opinions of the courts changed. The
opinion of the supreme court in the north
ern securities case was strong infIuence
and think the supreme court has from
time to time extended the application ~
the Sherman law
Judge Gary said that about the latter
part Of 1904 he had taken up the oues-
tion of the pools and agreements with
the finance committee Of the CORPORATION
| and that as result of subsidiaries. which
were found on investigation to be partici-
pating In any such agreements. were or
dered to abandon them The witness said
he had been surprised to find that our
! subsidiaries participated in any of these
agreements as late as they did,
He denied he ever had attended certain
meetings of plate and structural pools = .
testified by William e. Corey, former