The daily banner. (Cambridge, Md.) 1897-2008, 1913-02-04
.u,S.LOSES SHOE
MACHINE CASE
First Big 1eieat in the Anti
Trust Campaign
|PlAA new PROSECUTIONS
The Supreme Court Decides Officials
of Company Did Not Violate Law by
Organizing.

The Supreme Court Decides Ofneials
Of Company Did Not Violate Law by
Organizing.
Washington, Feb. 4. - The govern
ment suffered it's first big defeat In the
recent antitrust campaign when the
supreme court held that the officials
of the United Shoe Machinery COM
pany had not violated the Sherman
antitrust law by organizing that com
pany.
The court, however, did not pass OF
the legality of the system by which
the company leases machines on terms
thtat no independent" machinery can
be used.
The government will prosecute OF
ficials of the company under a remain
ing indictment, it was announced al
the department of justice. That 1nd1ct'
ment charges monopoly and unfair
competitive methods and Is declared
by officials to be the most important
and strongest of the indictments re-
turned against the company.
The decision grew out of the Mas
sachusetts federal courts annulhng
one of two indictments brought against
the shoe machinery company officials
The Massachusetts court took the posi-
ton that the indictment did not state
an offense under the Sherman law
The government appealed to the SUI
preme court by virtue of the criminal
appeals act of 1907, on the ground that
it did state an offense.
The government in the indictment
alleged that Sidney w. Winslow, Ed
ward P. Hurd, George w. Brown, Will
liam Barbour and Elmer P. Howe, VIC
lated the law, first by organizing the
United Shoe Machinery corporation
and second by a system of leasing
their machines, whereby patrons were
compelled to promise not to use any
machinery made by independents and
to use only that made by the alleged
combine.
The charge was that the shoe ma
chinery corporation took over the
business of the Consolidated and Nc
Kay Lasting Machine company, manu-
featuring 60 per cent of all lasting
machines; the Mckay Shoe Machinery
company, manufacturing 70 per cent
of all heeling machines and 80 pei
cent of all notwithstanding machines
and of the Goodyear Shoe Machinery
company, manufacturing 80 per CEN
of all the welt-sewing and out-soie
stitching machines.
The government contended that this
put about 80 per cent of the business
Of manufacturing shoe machinery into
one concern, and that this being al
undue proportion" of the trade was 6
violation of the law. 1t did not CLAIM
that there had been unfair competi
ton, as in the Standard Oil or tobacco
cases.
unanimous decision of the court, sale
that the lower court regarded the In
dictment as merely referring to the or
ganization Of the company, not to the
tying clauses" leases. That being the
case, he added, the supreme court
must accept that Interpretation with
out question.
He said this reduced the case to a
narrow compass, and pointed out that
the several groups combined in the or
ganization of the United Shoe Machin-
cry company were non-competitive.
The justice declared that the Sher-
man law did not contemplate the doing
of business by the smallest possible
isolated units. Two indictments we're
brought against the shoe machinery
officials. The decision concerned only
one of these indictments.