Arizona republican., 1922-06-22
BY Frederic J. Haskin

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WASHINGTON, D. C. June 10
Two new experiments designed to
establish business facilities to take
the place of the old-fashioned trust,
condemned by the Sherman law as
monopolistic and in restraint of trade,
are being tried out in the United
States. The Oldest single problem
of the American Government in the
regulation of business has been the
suppression Of malicious combina-
tions. Perennially, the private busi-
ness interests seek out new way OF
combination as soon as the Govern
ment breaks up an old one. Recently
government officials have adopted
the policy of working in cooperation
with business in an effort to dis
cover means of cooperative effort
which will not be malicious.
Economists and some government
officials take the position that there
is such a thing as beneficent COM
bination of business and repel the
evils of monopoly.
The two latest experiments are,
first, the plan of an agreement, per-
sonal in nature between a high Of
ficer of the government and indi-
vidual members of an industrial
group or trade. whereby joint action
may be had along beneficent lines
and without general conspiracy; and,
second, the agreement within a group
in business Of industry to operate
between two extremes, under the
general auspices of government
supervision, but avoiding absolute
definite agreement.
The outstanding purpose of all
trusts, monopolies and combinations
is to fix prices. The motive is to
create a, business situation wherein
the predominant element controls
the price the public must pay for a
given product.
The old fashioned malevolent trust
operated in this way: It would ac-
cumulate a strong fighting capital.
With this backing it would reduce
prices so low that independent and
weaker competitors would be forced
out of business. Then when the field
was clear. it would increase prices to
a. point where huge profits would ac-
crue. This is the sort of trust the
Sherman law forbids.
The trade association is declared
by government trust busters to be
the heir of the old fashioned trusts.
An association in, for instance, the
leather industry. would be made of
OSltUSIDlA EOuipEliiiS lidtpSiAlCiiN
leather manufacturers. They would
furnish to a general headquarters a
statement of the prices they in
tended to charge. Each member
would see the trend being followed
by the other members with the re-
suit that a tacit understanding would
ensue and concerted action leading
ultimately to a nonopolistic control
of the prices would follow. This
system was broken up recently by the
supreme court of the United States
which declared a price fixing trade
association, even though composed OF
independents was, in effect, a mo-
nopoly in restraint of trade.
The first experiment is being made
by secretary of commerce Hoover. He
believes that the emergency of the
coal strike makes concerted action
among coal operators and dealers de-
sirable and believes it is better for
the public to have prices fixed on
fair basis than to have wild COM
petition which run prices of coal up
to extortionate levels. Therefore. he
has adopted the plan of making,
personally, an agreement with each
individual that he will charge no
more than a given maximum price
for coal which Mr.. Hoover and his
Federal experts have determined is
a fair price. In this case, the dealers
do not deal with each other, through
any sort of an association. BY deal
ing individually with Secretary
Hoover it is claimed the law is not
violated, yet the public has the bene-
fit of concerted action to control the
price on a relatively low level
Should the plan work successfully.
it is possible it may be employed in
other industries, resulting in the cre-
alton of a new sort of beneficent
trust.
The second experiment is being
tried by the Federal Trade Commis-
sion. Chairman Gaskill of that body
has notified certain trade associa
tions that while they may not agree,
either directly or indirectly. to charge
certain prices, there may be general
understanding that prices will be
charged between named maximum
and a named minimum.
Both of these experients appear
on the surface to be subject to legal
review, especially the latter. and 1t is
rather doubtful. in opinion of trust
experts of the department Of justice
whether either plan will stand.
The present session Of Congress
opened a new field for the so-called
benevolent trust by enacting a bill
which exempts farmers CO. operative
organizations from prosecution under
the antitrust laws. This law would
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