Pine Bluff daily graphic. (Pine Bluff, Ark.) 1893-1942, 1914-08-13
Gigantic Corporation Held
to Be Operating in Re
straint of Trade.
MUST DIVIDE ITSELF
Unless Mandate Is Carried Out Upon
Confirmation OF Decision by SUI
preme Court, Tribunal Will
Consider Receiversllip.

| national harvester COupduy .Oudy
was declared to be monopoly in re-
straint of Interstate and foreign trade,
and was ordered dissolved by ma
jority decision in the United States
district court.
Unless the $140,00O,0O0 corporation
submits plan for the dissolution of
the combination into at least three
Independent concerns within ninety
days, or in case of appeal within
ninety days of the issuance of an ap-
peal mandate from the United States
supreme court, the decision announces
that the court will entertain an ap2li-
cation for the appointment of a re
cevcr for all the properties of the
corporation.
| The decision of the court was given
by Circuit Judge Walter |. Smith of
Iowa, with which Judge William c.
Hook of Kansas agreed and from
which Judge Walter A. Sanborn of
| Minnesota dissented.
Long u Law-Breaker.
The majority opinion held that the
! International Harvester company was
| from it's organization in 1902 in VIOLA
ton of the Sherman law. The origin
al corporation, formed of five con-
Germs, violated the first section of the
Sherman act by restraining competi-
ton among themselves. The combin-
ed organization also tended to monop-
Ollie trade in contravention of the
second section of this law.
The decision declares that while the
International Harvester company and
its selling organization, the Interna
tional Harvester company of America,
control from so to 50 per cent of the
trade in agricultural implements man
ufactured by them, their treatment of
smaller competitors in general has
been fair and just.
The court finds fault with the tech
nical violation of the Sherman law for
only two actions. The opinion de-
clares that there was no excuse for
the advertising of the products of d
M. Osborne & company as independ
ent for two years after it had virtual
ly entered the International Harvester
company. This advertising was tC
induce purchasers, the court finds,
from those who were opposed to buy
| ing from the combination.
Simulated Sales.
| The other act censured by the deci-
sion was the manner in which the five
original concerns were turned over tt
the International company by William
C. Lane, New York banker, who
commended that he had purchased
the properties.
"The court is clearly of the opin
ion," the decision reads. that the pro-
cess by which it was made to appear
that the properties were sold to Lane
was merely colorado"
The court holds, however. that the
property turned in to the Internation-
al company was greater than the
|stock issued for it, and that the case
involves no question of overcapitaliZa-
ton.
The court cites portions OF the de-
cision in the cases of the Standard Oil
| company, the American Tobacco COM
pany, the Du Pont De Nemours & Co..
and other cases as to what consti-
tutes the restraint of trade, reasona-
| BILE and unreasonable, and concludes ::
1--WE think it may be laid down as a
general rule that if companies could
not make legal contract as to prices
| or as to collateral services, they could
not legally unite, and as the compa-
MES named did in effect unite, the sole
| question is as to whether they could
have agreed on prices, and what COL
lateral services they would render
when their companies were all pros
porous, and they jointly controlled so
to 81 per cent of the business In that
line in the United States. We think
they could not have made such an
agreement.
| IF the five companies which formed
4 the International had been small and
their combination had been essential
| to enable them to compete with large
corporations in the same line, then
their uniting would, in the light Of
reason, not have been in restraint of
trade. but in the furtherance of it;
but when they constituted the largest
manufacturers of their articles in
America, il not in the world. and held
jointly about 80 to 81 per cent of the
| trade, and two at least of the compa-
MES forming the combination were
prosperous. their combining was
when similarly viewed, an unreasona-
BILE restraint of trade.
IF the business of the separate
companies combining was unsuccess-
full it could be plain that their com.
bination was reasonable in view OF
the rule of reason as proclaimed by
the supreme court but it is conceded
that the Mccormick and the Deerine
companies had established reasonably
successful and prosperous businesses!
SO that question is eliminated.
No Limit to Size.
"There is no limit under the Amer
lean law to which business may
!, not independently grow, and even a
combination of two or more bust.
4 nesses if it does not unreasonably re-
strain trade, is not illegal; but it is
I the combination which unreasonable
restraints trade that is Illegal, and i
!, the parties in controversy have 80 tt
IS per cent of the American business