The Washington times., 1913-02-03
SHOE MACHINERY
Firm NOT TRUST,
HIGH COURT RULES
"RuIe of Reason" Applied in De-
cision of TribunaE-0fficers
to Escape Prosecution.
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not foreclose the Government case.
When the decision was first handed
down it was given out to be a prec-
edent that would seriously cripple the
Government in the prosecution of other
cases
Department of Justice officials. how
ever, are not inclined to take such a
view of 1t.
The decision related to only part
IF the Governments case against the
shoe machinery trust. This was as
to. the validity of two counts in the
Government indictment which charg-
ed the company with violating the
law against combinations in re-
straint of trade and conspiracies in
restraint of trade. 1t was alleged
that the shoe machinery company by
combining three concerns which held
mcnopolies. on articles which were
patented. but which were not COM
petitive, violated the Sherman law.
The Supreme Court refused to pass on
the validity of the leases made by the
company and on the validity of the in
dictment as a whole. 1t held that these
questions were not before II in this pro-
ceeding.
The Department of Justice will still
be able under this decision to attack
the leases of the company through civil
action. The officials of the company,
however, are probably shielded from
criminal prosecution under today's find
ing.
Justice Holmes held that on the face
OF IL the combination was simply an
effort at greater efficiency He said:
THE business of the seevral groups
that combine as 1t existed before the
combination is assumed to have been
legal The machines are patented, max
The exclusion Of competitors from the
use of them Is as the very essence of
the right conferred b ytne patent
Further on Justice Holmes said il was
hard to see where the collective busi-
ness could be any worse than its COM
ponent parts.
Officers Indicted.
Today's decision followed the indict-
ment for criminal prosecution under
the Sherman antitrust law of FIVE
officers of the United Shoe Machinery
Company, on September 10. 19I1-
President Sidney w. winslow, of Or
leans. Mass: Vice President Edward
p! Hurd. of Newton. Mass: Vice
President George W. Brown, of New
ton; Vice President William Barbour,
ofSN York. and Director Elmer p.
Howe, of Boston.
District Judge Putnam dismissed
the indictments at Boston on March
d 1912, sustaining demurrers of the
defendants. He held that under the
rule OF reason" outlined by the Su-
preme Court in the Standard OIL and
Tobacco trust cases the mere bigness
or the company and operation of its
tatents did not constitute an unlawful
monopoly or conspiracy, as defined
by the Sherman law.
Two Distinct Charges.
Two distinct charges were made
against the defendants One charged
that. by merger of four formerly inde-
pendent shoe machinery manufacturing
companies into the United concern. the
defendants controlled 50 per cent of in
terstate commerce in the machinery
The second charge was that by the So
called tying clauses, of its contracts
leasing machinery to shoe -manufac-
turers. the defendants had conspired to
restrain trade.
. II was charged that the trust con-
trolls patented machinery leased to 1.300
manufacturers in thirty-four States
ranging from control of so per cent of
welting machinery to 10 per cent of
lasting machinery.
Before the United Company was or
Eanfzed in New Jersey in 1899. with
s25. 900 600 capital, il was alleged that
the defendants controlled the Consoli-
dated and Mckay Lasting Machinery.
the Goodyear Shoe Machinery. and
other similar companies, merging all
into the United trust" The mere
formation of the United Company alone
constituted violation of the law, the