Evening star., 1926-11-26
ANTITRUST LAW
PROBLEMS GREA!
Competition Changes Broad
ed Field for Doubt Despite
Many Court Decisions.
HY DAVID LAWRENCE f.

v
Although the Shelmrn antitrust
Law has been inlerpre ed again ana
gain by the supreme Court OF the
'nited States. the ever-ChanginS fac
tors of competition and large conbl-
nation nave increased rather than dl-
ninished the area of doubt as to what
may or may not be done legally.
The Department of jusTce is anx-
lousiy awaiting the decisions OF the
highest court Of the land on several
If the outstanding antitrust cases
some of which have been in the courts
-inr.. the time George w. Nickershain
vas Attorney General. Broadly speak
ing. some of the main principles on
which there is doubt at present are.
Does the combinat ton of two com
panies. each of which has va1uaoie
natents. make it possible FOR the
merged concern to fix prices afpltf"ll-
lv on the theory that what TWO com
Dauies may not do in competition 'hey
nav do vhCn merged. Slmpl| ny IAN
ing back Oh the rlohts OF a pdteiV"
rticla" .
Does the acquisition Of stock in a
r0I12Dcting concern constitute
p,onrpo,y. and would the outright
r1rch..se OF such stock constitute
legitimate method of acquiring me
nrnOettv and business OF the same
rumpetiio tor? -.
Is there objection TO the pooling OF
information on costs by colnpetilol ;
through 1rade associations Wlthout
any understanding as to the fixing ol
the price to the consumer:
Actions Start Early.
These illustrate the ramificatlons OIL
modern business at a time When eH,
pansion both in the domestic ana
Foreign field has driven large competl-
tors into each others arms 10 ellihi-
nate economic waste.
The fact that the Government
cannot without considerable difficulty
protect the public interest against
cxorhitant prices when once II re-
,pcyeS its ohtpctiOn to a large COM
1ination Of business is the governing
,..luse of the many actions begun pS
thc Department of Justice to prevent
combinations ''in restrain of trade. "
Under the present administration,
Col. William Donovan. Assistant Al
tornev General, who is IN dlfect
charge of antitrust work, Is taxing
seriously the words ito prevent com
biuations in restraint Of trade. HE
considers il tie Gora~nment's duty to
act even before combination or mer
ger has begun its operations on a
merged basis His theory is that 1t is
much more difficult to obtain disso-
luton later. and infinitely more eX-
nensive to all concerned, including the
public. than to cnioin competitors at
The outset from following W. at may
easily Lecome a monopolistic ~ractice.
II is suggested, too. that 'nls pro
cedure eliminates most of TT crimlnal
features Of antitrust prose- utions IN
1lyNrr &
either approved by the col.tts or dis
approved tefole criminal act is per
formed.
The activities of trade associations
are being watched with care ~ the
department not because they are
looked upon as improper factors in
The modern development of business,
for their economic value is enthustas-
tieallv recognized. but because II is
feared that wrong interpretations or
recent decisions may cause some of
these associations to oVerstep the
bounds.
Danger Lies i'm Price Fixing.
If the associations were merely to
exchange data on costs and give each
ether information which cannot be
construed as price fixing. there would
he no danger of prosecutions. The diff
fcuty is that in the Informal confer
rnreS understanding are reached by
the men in control of an industry to
keep prices UP IN defiance of the laws
If supply and demand.
Perhaps the most delicate point in
volved in the big trust cases is that
relating to the rights that flow from
= patented article. The manufacturer
hitherto has fixed his prices arbitrar-
lily on the idea of all the traffic may
boar. especially il he has had an arti-
,'c not easily initiated. There is
temptation when an imitator does
come along to merge with the compel
itor and by virtue of the both patents
10 keep the prices high enough for
both to make considerable profit.
Nere II not for the patent feature,
this would not be permitted under
the Sherman antitrust law governing
monopoly. Its q nice point whether
the existence of patents in pool de-
priVeS the Government of it's point of
attack on monopolistic grounds. The
Department of Justice is inclined to
he view that protection of the pub
lic requires that at no point in the
evolution of business should the
growth of monopoly be permitted to
the disadvantage of the consumer, but
he courts will, of course. have the
final word as To how far the rights of
Il patented article can carry.
.t,xl,K