The Washington herald., 1914-11-03
The Enigma Of the Sherman Law.

of the Sherman antitrust law-and for that matter
the great mass Of the general reading pubc-is per-
fediy well aware of the fact that one of the chief
difficulties in the practical operation of the law has
been the varying and opposing constructions of il
made by our Federal courts We say il with all due
respect but the truth is that our courts have
"wabbled" in their interpretations of the Sherman
statute and the result has been that even lawyers of
the greatest ability haye confessed themsevs abso-
lutey puzzled as to the correct advice to give their
clients who were meditating business transactions
which might or might not be affected by the law.
When the anti-trust bill was under debate in Con-
gess It universally declared there that the pro-
posed law had no reference at all to railroad matters
In the first decision made by the Supreme Court
under the law, that concerning the legality of the
American Sugar Refining Company the court held,
in substance that the law did not affect the COM
pany because the company was engaged in manu-
featuring and that manufacturing was not part of
interstate commerce. This was supposed to remove
industrial well railroads from the pur
view of the law and for many years thereafter the
new statute practically dead letter Then began
another period of interpretations of the law beyond
anything its trainers dreamed Of These included
among others. the judgments in the Addyston Pipe
Line Joint Traffic Association and Northern Securi-
ties cases. which held that the law touched every
field of business activity in the country and placed
the stamp of Ilegality upon thousands of business
transactions that had heretofore been considered
absolutely innocent and proper When the American
Tobacco case came up for the first time in of
the lower Federal courts, the court held that al
though proof of oppressive and harmful conduct on
the part of the company seemed to be entirely lacking
yet the company must be declared to be illegal be-
cause of the single fact that it represented combi
nation of previously competing tobacco organizations.
The court used the since familiar express wagon"
illustration and said that two small country express
companies doing competing business State
line could not combine without incurring the penal
ties of the Sherman act N'-.
From this time on judicial sentiment concerning
the Sherman law seemed to undergo another re-
action. When the Supreme Court got at the Ameri-
can Tobacco case it declared that no such extreme
view Of the law as that promulgated by the lower
court in the same case was at all warranted and in
its own pronouncement in the American Tobacco
and Standard Oil cases, the court declared that a
rule of reason" must govern in all efforts to apply
the antitrust law to business and that this
"rule of reason" must seek to be illuminated by the
real intent of the parties concerned 1t not the
techncaites of the law that mattered but the moral
purpose in any particular transaction The Supreme
Court expounded this construction of the law at
great length and its decision was obviously intended
as general clarhcation of the perplexes that had
attended the effort of the government to make the
law an effective statute !
Last of all in this eventful history of the cases
under the Sherman law that have come under review
by the courts is that affecting the International Har
vester Company; but from the decision of the lower
Federal that has recently been rendered in this
Ease it is apparent that judicial perplexty to the
true meaning of the Sherman law is still dense
ever In the trial of the the government made
little effort to bring out any facts concerning the
nonoppressfve conduct of the Har-
Gester Company, but relied solely for conviction
Upon the fact that the Harvester Company was
combination of other competing harvester organza
ions. In summing up the case, the lawyers for the
government declared that it would not matter at all
{ it could even be shown that the Harvester Com
oany had actually reduced by so per cent the price
IF moving and reaping machines if the international
Harvester Company organized out of other COM
,eting harvester companies, that circumstance alone
vas sufficient to make it illegal That is to say the
ontention of the government harked back entirely
o the Addyston Pipe Line the Northern Securities
md other old decisions of the Supreme Court, and
apparently wholly ignored the rule of reason"
tandard set up in the Standard Oil and American
Tobacco cases. The lawyers for the Harvester Com
ANY devoted all their effort TO prove that their COM
ANY presented typical case for application of the
ule of reason; and this view of the case the gov
rnment practically acceded to if the assumption
o be allowed that the "rule of reason" idea to
ave any force whatever. l.
1t will thus be seen that there is another very
rtica time approaching in the progress of the
judicial elucidation of the Sherman law. Is the
supreme Court to hold to the opinion pronounced
T. the American Tobacco and Standard Oil cases,
phoding the "rule of reason" in these affairs, is
to go back to the old doctrine of the earlier de-
isions of the COURT that no combination of inter-
tate commerce corporations is to be sanctioned in
his country under any circumstances and for what
ver purposes, even though such combination is not
bjected to by any business interests and is pro-
uctiye of the greatest business good? ...- p.
A@vaiFin0 Verdict of The Voter,