Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-08-13
Courts Statement

submit a plan for the dissolution Of the
combination into at least three indie
pendent concerns within so days, or in
case of appeal within 80 days of the
issuance of an appeal mandate from
the United States supreme court, the
decision announces that the court will
entertain an application for the ap-
pointment of a receiver for all the
properties of the corporation.
The decision of the court was given
by Circuit Judge Walter I. Smith of
Iowa, with which Judge William c.
Hook Of Kansas agreed, and from
which Judge Walter A. Sanborn of
Minnesota dissented.
The majority opinion held that the
International Harvester Company was
from it's organization in 1902 in viola
ton of the Sherman law. The original
corporation, formed of five concerns,
violated the first section of the Sher-
man act by restraining competition
among themselves. The combined or
ganization also tended to monopoliZe
trade in contravention of thu second
section of this law
The decision declares that while the
International Harvester Company and
its selling organization, the Interna-
tionai Harvester Company of America.
control from so to So per cent of the
trade in agricultural implements
manufactured by them. their treatment
of smaller competitors in general has
been fair and just.
The court finds fault with the ac-
tons of the corporation, aside from the
technical violation of the Sherman
law, for only two actoins The opin-
ion declares that there was no excuse
for the advertising of the products of
D. NJ. Osborne and Company as indie
pendent for two years after 1t had
virtually entered the International
Harvester Company This advertising
was to induce purchasers, the court
finds, from those who were opposed to
buying from the combination.
The other act censured by the deci-
sion was the manner in which the five
original concerns were turned over to
the Internat ional company by William
c. Lane. a New York banker, who con-
tended that he had purchased the
properties.
The court Is clearly of the opin-
ion." the decision reads, that the
process by which it was made to APP
pear that the properties were sold to
Lane was merely colorado"
The court holds, however. that the
property turned in to the International
company was greater than the stock
issued for it, and that the case involves
no question of over capitalization.
The court cites portions of the deci-
sion in the cases of the Standard Oil
Co, the American Tobacco Co, the Du-
Pont De Nemours & Co., and other
cases as to what constitutes the re-
straint of trade, reasonable and I'M
reasonable, and concludes:
I'VE think 1t may be laid down as
general rule that II companies could
not make legal contract as to prices
or as to collateral services, they could
not legally unite, and as the companies
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 80
to So 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
the International had been small and
their combination had been essential to
enable them to compete with large cor
porations 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 1t; but when
they constituted the largest manufac-
turers of their articles in America, If
not in the world, and held jointly about
80 to S5 per cent. OF the trade, and
two at least of the companies forming
the combination were prosperous, their
combining was. when similarly
viewed an unreasonable restraint of
trade. If the business Of the separate
companies combining was unsuccessful
it could be plain that their combina
ton was reasonable in view Of the
rule of reason as proclaimed by the
supreme court, but 1t is conceded that
the Mccormick and the Deering COM
panies had established reasonably
successful and prosperous businesses,
so that question is eliminated
There is no limit under the Ameri-
can law to which a business may not
Independently grow, and even COM
bination of two or more businesses II
it does not unreasonably restraint
trade, is not Illegal but it is the COM
bination which unreasonably restraints
trade that is Illegal and If the parties
in controversy have 80 or IS per cent.
of the American business, and by the
combination of the companies all COM
petition is eliminated between the
| constituent parts of the combination,
| then 1t is in RESTRAINT of trade within
the meaning of the statutes under all of
the decisions"
The decision reviews the history of