Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-06-22
The HQskin Letter s. ' : Rsssz
TRUST EXPERIMENTATION.

WASHINGTON, D.. c., June 1O.-Two
new experiments designed to establish
business facilities to take the place OF
the old fashioned trust, condemned by
the Sherman law al m~onopolistic and
in restraint of trade, are being tried
out in the United States. The Oldest
single problem of the American gov
eminent in the regulation Of business
has been the suppression of malicious
combinations. Perennially, the private
business interests seek out a 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 discover means
of cooperative effort which will not
be malicious.
Economists and some government
officials take the position that there
10 such a thing as beneficient combi-
nation of business interests. The great
problem is to make laws and regulations
which will produce the benefits of con-
certed 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 officer
OF the government and the individual
members of an industrial group or
trade, whereby joint action may be had
along beneficent lines and without gen.
eral conspiracy; and, second, the agree
ment within a group in business or in
dustry to operate between two ex-
tremes, under the general auspices of
government supervision, but avoiding
absolute definite agreement.
The outstanding purpose of all
trusts, m~onopolieS and combinations is
to fix prices. The motive is to create
a business situation wherein the pre-
dominant element controls the price
the public may pay for a given product.
The old-fashioned malevolent trust
operated in this way: 1t would accu-
mulate fighting capital. With this back
ing 1t would reduce prices so low that
independent and weaker competitors
would be forced out of business. Then
when the field was clear, it would in
crease prices to a point where huge
profits would accrue. This is the sort
OF trust the Sherman law forbids.
The Heir of the Trusts
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 up of ostensi-
bly, competing independent leather
manufacturers. They would furnish to
a general headquarters a statement of
the prices they intended to charge.
Each member would see the trend be-
ing followed by the other members
with the result that q tacit under
standing would ensue and concerted ac-
ton leading ultimately to a m%onopolis-
tic 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 COM
posed of independents was, in effect, a
monopoly 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 desirable
and believes it is better for the public
to have prices fixed on a fair basis
than to have wild competition which
would run prices of coal up to extor-
~tionate levels. Therefore, he has
adopted the plan of making, personally.
al 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
ease, the dealers do not deal with each
other, through any sort of an associa-
ton. BY dealing individually with Sec
rotary Hoover it is claimed the law is
not violated, yet the public has the BEN
eft Of concerted action to control the
price on a comparatively low level.
Should the plan work successfully it
is possible it may be employed in other
industries, resulting in the creation of
la new sort of beneficient trust.
The second experiment is being tried
by the federal trade commission. Chair