The Washington herald., 1916-02-07


General of the United States.
The misleading effect of the Sugar Trust de-
cision first made evident by the Supreme
Court nearly FIVE years later In the celebrated
Addyston Pipe and Steel Company case the Su-
preme Court, in $780, corrected the mistaken i'm
preston which had been created throughout the
country by its previous decision in the Sugar
Trust case.
In the Addyston the Supreme Court first
definitely showed that the purpose wheh Congress
had IN mind in enacting the Sherman law mad been
efectually carried out by tie Sherman law The
Supreme Court then first declared that the Sher-
man law did in fact prohibit trusts and monopolics
1t is interesting to note that the decision against
the Addyston combination WAS written by tormer
President Taft. who at that time was judge of
the United States Circuit Court His decision was
subsequently affirmed by the Supreme Court.
In technical sense, the check which had been
placed upon the Sherman law by the decision in
the Sugar Trust was removed by the Addy-
ston decision. In practical sense, however, the
Sherman law, as result of the Sugar Trust de-
csion had become dormant and irnpotent so that
the formation of trusts and monopolies had pro-
ceeded with renewed vigor and the industries of
the country were virtually taken out OF ,ndcpend-
ent and competitive ownership and placed under
the control OF great trusts and monopolies. There
is no doubt that this result, the evil effects of
which are still manifest, is due to the decision
in the Sugar Trust case more than to any other
circumstance The country had grown used to
regarding the Sherman law as dead letter be-
of the Sugar Trust decision. 1t took many
years before the country became familiar with the
4 IL,
ter case decided the formation of trusts and
monopolics continued unabated
The substance OF the Addyston decision was
that number of competing companies engaged
in manufacturing and selling cast iron pipe had
entered into secret agreement to the effect that
in making bids for the furnishing of pipe the
amount of their bids was agreed upon in advance
and the particular member of the combination
was selected in advance whose bid should be the
lowest and who should therefore receive the con-
tract. The Supreme Court held tina, under the
Sherman law this amounted to a contract or agree
ment in restraint OF trade that is contract which
restrained the parties who entered into the con-
tract from freely competing with each other there
by restraining interfering with the trade and
commerce of the country. In other words acting
under the maxim that Competition is the life of
trade" the Supreme Court decided that the Shcr-
man law forbade competing business concerns
from agreeing not to bid against each other, upon
the theory that such agreement nerfered with full
and free competition and was therefore injurious
to the country at large, because prices would be
raised to higher figure than if the concerns inter
cstcd had actively competed with each other and
bid against each other This statement comprises
in substance the true purpose Of the Sherman law
Its purpose is to prevent business concerns from
entering into agreements from uniting with
each other in such way to prevent them from
competing freely and actively with each other The
theory is that if business concerns are allowed
thus to agree TO prices or thus to combine with
each other in the form of trusts the country will
not get the benefit OF the lower prices and better
product which experience has shown results from
free and active competition. The history of the
great trusts Of this country has been uniform to
the effect that they have been created by the COM
bination getting together of all of the
concerns engaged in the particular industry and
which had previously been competing with each
other. After they have thus combined into great
trust they naturally no longer compete with each
other, and in addition. they grow so powerful that
they drive out of existence the few small concerns
which remain out of the trust and independent;
and the final result has been that such trust gets
full control of entire industry so as to be able
to dictate prices at its free will and pleasure.
Naturally the great trusts have made full use Of
such power by raising prices to the highest pos
sibc limit and also by ruthlcssly driving out and
crushing their weaker competitors.
No one doubt that the Sherman law is a
most beneficial law when it is directed to the exter-
mination OF the great trusts which resortcd to such
unfair and injurious practices.