The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-06-24
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC J. HAsKIN. Director.
Washington. d. @.
TRUST NEUTRALITY-SUSPICIOUS..

new experim entS designed TO eStaphSn
business facilities to take the place
of the oId-fashioned trust, condemned
by the Sherman law as monopohstic
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 priv
ate business interests seek out new
way of combination as soon as the
government breaks up an old one Re-
Gently. government officials nave
adopted the policy of working In CO.
operation 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
is such a thing as beneficent com
bination~ of business interests. The
great problem is to have laws and
regulations which will produce the
benefits OF concerted business and
repel the evils of monopoly
The two latest experiments are,
first: the plan of an agreement, per-
sonaI in nature, between a high Of
ficer of the government and the in
dividuaI 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 or industry to operate be-
tween two extremes, under the gen.
eral auspices of government supervi-
sion, 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 given
product.
The fashioned malevolent trust
operated in this way: 1t would ac-
cumulate a strong fighting capital.
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 Heir of the Trusts.
The trade association is declared by
government trust busters to be the
heir of the oId-fashioned trusts. An
association in, for instance, the leather
industry. would be made up of osten-
sibly competing Independent leather
manufacturers They would furnish
to a general headquarters statement
of the prices they intended to charge
Each member would see the trend
being followed by the other members
with the result that a tacit understand
ing would ensue and concerted action
leading ultimately to a monopolis-
tic control of the prices would follow.
This system was broken up recently
by the supreme court of the United
States which declared n price-fixing
trade association. even tho composed
of independents was, in effect,
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 competition
which would run prices o. coal up to
extortionate levels. Therefore. he has
the plan of making, per-
sonahy, an agreement with each in
that he will charge no more
than a 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, thru any sort of an as
ISOLATION. By dealing individually
with Secretary Hoover it is claimed
the law is not violated, yet the public
has the benefit 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 crea-
ton of a new sort of beneficent trust
The second experiment is being
tried by the Federal Trade Commits
sion. Chairman Gaskil of that body
has notified certain trade associations
that while they may not agree, either
directly or indirectly, to charge GER
tain prices, there may be general
understanding that prices will be
charged between a named maximum
and named minimum.
Both of these experiments appear
on the surface to be subject to legal
review, especially the latter, and it is
rather doubtful, in the opinion of trust
experts of the Department of Justice
either plan will stand.
The present session of Congress
opened a new field~for the so-ca1Ied
benevolent trust by enacting a bill
organizations from prosecution under
the antitrust laws. This law would
permit farmers to market their goods
in groups and while safeguards are
provided intended to prevent monop-
oily. some Observers declare that with
the door opened, monopoly is likely to
rise up and control the co-operatives
This law will be attacked in the courts
to test its constitutionality. cases al
ready being in preparation for that
purpose.
Labor unions are declared by the
Clayton antitrust law to be specif-
ically exempt from prosecution as
trusts But the Supreme Court, In
the recent Coronado case, and inferior
courts in other cases, have modified
this exemption so as to make labor
unions amenable to damages where
their combinations have caused loss
thru strikes, in certain circumstances.
Combines of Ancient Origin.
The tendency of business in all
forms to CT nnbine against the public
is of ancient origin. No study of the
development of the great industrial1
corporations and later of the trade
associations. can be made without the
discovery o. the impossibility of alter
ing profound and immutable laws of
political economy.
People of the same trade" says
Adam Smith, the eminent Scotch
economist, writing generations before
the Standard Oil company was born,