The Detroit times., 1914-11-18
LAW
THEORY WRONG,
SAY Van HISE
Competition No Longer Trade
Regulative Factor, Declares
Economist
COMMUNICATION AID TO
PRICE MAINTENANCE
Measure May Separate Com.
binations, But Cannot Make
Parts Compete

Sweeping aside the accepted eco
nomic theories OF q century as un-
fitted for present-day conditions. Prof.
Charles r. Van Hise. president OF the
University Of Wisconsin. who deliv-
cred an address on Antitrust legisla.
ton Of the sixty-third congress" be-
fore the board OF commerce at noon.
Tuesday, told q representative of The
Times that the restoration of compe-
tition, az contemplated by the Clay
ton antitrust law, will not tend to
better conditions for the ultimate con-
sumner.
Competition as q price regulativs
factor IL thing Of the past" declar-
ed Prof. Van Hise. II vanished with
the advent of the telephone. tele-
graph and other means Of rapid com
munication. Some means Of artificial
regulation must take the place Of the
old natural regulation of competition.
The Clayton law makes no provision
for this state OF affairs.
"On the whole, I do not agree with
the economic theory contained In the
Clayton law The theory OF II Is to re-
store competition; to break up pres
ent large combinations and businesses
into their original component parts.
setting each one upon It's own footing
and putting II into active competition
with each one of its former associ.
ates.
ut amplifies. on the whole, the
Sherman law by declaring in effect.
that any combination which lessons
competition IL q restraint OF trade, a
theory which Is obviously erroneous.
For instance. there may be three
stores on q single corner and two of
them may combine. Competition II
materially reduced, yet there Ii no
restraint Of trade.
Two years ago In my book, Con
centration and Control. I advocated
the formation Of q federal trades COM
mission, which should have power
somewhat similar to that Of the In
terstate commerce commission. The
idea was repudiated by both the old
parties. Today We have a law provid-
ing for that sort Of commission. q
law passed by an almost unanimous
vote OF both houses OF congress.
i am not q defender Of monopoly.
l do believe. however. that business
conditions would be benefited by add
Ing to the Sherman law q clause con-
strung q combination In restraint OF
trade AZ combination, the effects
Of which are calculated to be detri-
mental to the purchasing public. De.
termination ~ to whether or not any
given combination 10 detrimental to
the consumer should be left In the
hands Of the federal trades commits
sion. just as the question Of whether q
2, 2 1-2 or scent rate of fare II Just
for the railroads IL left In the hands
of the interstate commerce commits
sion. There is Q vast difference be-
tween combination and monopoly
which the average citizen does not
attempt TO ascertain.
Nov, as to the effects Of the Clay
ton law which, as I said. aims to sep
arate q combination into Its compo-
nent parts. Suppose It 10 put into
operation. We have q deadly paral-
lei In the Standard OIL company, which
was divided into the 33 companies
from which II was originally formed.
The courts had the power to compel
the setting up Of the original COM
panies, but II had no means of put
ting them into competition with one
another. Instead Of beneflting the con-
sumner by lower prices because Of the
natural regulation Of competition, the
move really injured the public be-
cause prices, until the outbreak of the
war In Europe. were generally high
Ter than before.
Competition a. q regulative factor
10 thing of the past The tendency
toward cooperation II much stronger
than that toward competition. a. any
one can see. II II easier and safer
to maintain q stable price for staple
article, assuring fair margin Of prof.
Il, than to cut the price to the lowest
possible margin of profit, and perhaps
loss, In competition. Easy means Of
Communication also aids this natural
community of interests.
I'm short. my theory for antitrust
Flegislation IL the substitution Of reg
ulation for competition. In this way
monopoly may be prevented and .
constant level Of business Of q healthy
nature kept up.
1T would be presumptuous for me
to declare that the Clayton law ID q
failure, because I have not had an op-
portunity to see how II n going to
work out. The courts may construe
It In such q way a. to amend the
faults Of its theory, and 1t In to be
hoped that they will do So"
Prof. Van Hise 10 thoroughly &C
quainted with the trend Of modern
business and II considered an author
ity on economic problems. He was
chairman OF the legislative committee
of the United States chamber Of COM
merce during the sixty-third congress
and has had an exceptional oppor-
tunity to observe and analyze the ef-
forts made TO counterfeit the monop-
olistic tendencies Of big business."
As the originator OF the idea Of the
federal trades commission. Prof. Van
Hise IL conceded to be an authority
upon the theories under which II
should be operated.
Among his published works relat-
ing to big business are "The Conser-
walton Of the Resources Of the United
States" Concentration and Control
and "A Solution OF the Trust Prob
lem OF the United States"
Prof. Van Hise has been president
OF the University Of wisconsin since
1908, and q trustee Of the Carnegie
Foundation for the Advancement OF
Teaching since 1909.
In addition to being an authority on
economies. DR.. Van Hise has gained
an international reputation a. writ
or and lecturer on geology.
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