New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-10-14
Rate Agreement Held Bet
ter than Unrestricted
Competition.
UNDUE RESTRAINT"
ALONE is CENSURED
Broad Decision Under Sherman
Law Is Handed Down by
Judge Lacombe.

Combinations 10 make rates and d.
vide ocean steeraCe passenger traffic, II
devoid of any agreement looking tow
ard the use Of certain ships TO cripple
lines that may be outside OF the COM
bination. are legal and more desirable
from n public point of view than unre-
stricted competition, says Judge +
Henry Lacombe, in a decision handed
down in the Federal Court yesterday in
the action brought 10 force the aban-
donment Of the North Atlantic pool.
Judge Lacombe's decision, based on
the findings Of the United States SUI
premc Court in the American Tobacco
ind Standard Oil cases, is the broadcast
handed down in any Of the courts UNI
Ger the Sherman law. and the first IN
this jurisdiction where the principle Is
laid down that under given conditions
restricted competition is more desirable
than absolutely free competition.
The North Atlantic Conference. made
up of the Hamburg and other
companies engaged in the steerago
traffic, divided that traffic to American
PORTS IN conformance with an agree
mcnt made after "rate wars" had rem
Gered this class of business unproft-
able. As one way of combining steer
Gge traffic to members Of the confer
encc, vessels known AS lighting ships
in maritime circles were used first in
enc line of trade and then in another
10 batter down prices TO point where
q weak company could not afford TO
handle the business and so would be
forced to quit. after which prices would
be put back on a profitable basis and
the lighting ships" ASSIGNED 10 other
service
Objections to the operations and
methods of the pool led to a suit under
the Sherman law TO enjoin its opera
tiOns. In deciding the issue Judge
Lacombe sustains the petitioners only
SO far as an injunction against the use
Of fighting ships" is concerned. As
such ships have not been in use since
the filing Of the suit and the Canadian
Pacific and Allan lines had Withdrawn
from that part of the agreement, the
issuance OF the injunction is effective
only in laying down rule that will
prevent a return to The practice.
an view of the pCculiarities of ocean
II ais pOItdllOH, Sdlu d uBt LdNpAlD "
in his decision. the method adopted
by the defendants, if purged of it's OBJ
noXious feature the fighting ships
a reasonable one, which, so far from
trade, really fosters and
protects it by giving il a stability which
insures more satisfactory public service
for all concerned.
without this method or something
like it there would be one of two re-
sults-the lines would either engage in
rate wars, which would mean the
elimination Of the weak and the sur
vival of the strong, or, to avoid a
costly struggle, they would consolidate
through common ownership. Either
would mean monopoly fully as effec-
tive, and. it is believed, more so than
can exist by virtue of this agreement.
II seems therefore that this particular
combination comes fairly within the
exception to a literal construction Of
the statute, which is indicated in the
Standard Oil-Tobacco cases.
"The effect of these exhaustive opin-
IONS" says the court, "seems to be that
contracts and methods OF business
which do in fact restrain or interfere
with competition are not TO be held
obnoxious TO the provisions OF the act,
unless such restraint OF interference is
unreasonable or undue