Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-05
Combinations to Be Opposed
In U. S. Only on Proof
of Violations.
Department OF JUSTICE
USES RULE OF REASON
Standard Units May Join to Meet
New Problems Raised by
Dutch Shell Invasion.
BY DAVID LAWRENCE.

The Federal Government Is not going
to put any obstacles in the way Of mer-
gers or consultations unless IL Is
clearly apparent that the proposed COM
binations are in violation of law.
Instead of opposing mergers and let
| ting the courts determine all cases, the
Department Of Justice is inclined now
adays to apply the rule of reason This
does not mean the exercise of discre-
ton but that the department Is not
going to proceed uselessly unless it has
a clear case.
Published reports that the Standard
Oil Co. Of New Jersey and the Stand
ard Oil Co. Of California have under
confederation merger which will de-
velop within the next so days unless
Government opposition appears is the
direct consequence Of the policy pur-
sued by the Department of Justice in
deciding not to appeal the case in which
the Standard Oil CO. of New York was
given the right by lower court to
merge with the Vacuum Oil Co.
Other Mergers Loom.
The fact of the matter is that the
court decision in that case rendered
several weeks ago may become the
basis for many mergers in the oil in.
oustry. The Department Of Justice
! reserves the right. of course to prose-
cute any company which violates the
law even after a merger takes place,
but the supposition now is that none
Of the oil companies wishes to do any
thing that will get itself entangled in
the clutches Of the law and merely is
DESTROYS Of combining operations in
such way as to meet competition.
In other words, even since Rayol
Dutch Shell Co. with its foreign capital
came into the United States and spread
its filling stations from coast to coast
the Standard Oil group of companies
has been unable to do some Of the
things which the foreign-oWned cor
pcratiors were cree to do.
The view taken. by the lower court
in the Vacuum case is that the mer-
ger will increase rather than lessen
competition. The purpose OF the Sher-
man law, Of course. was to prevent any
merger which would restrain competi-
| ton. The evidence in the Vacuum Oil
suit showed that the merged companies
expected to combine operations in the
export as well as domestic market. So
it is expected that the Standard OIL
Co. Of New jersey combining with the
Standard Oil Co. of California will
(
trolling jointly about 25 per cent Of the
domestic oil business.
Not Considered Monopoly.
Most decisions of the Supreme Court
have indicated that any such small
percentage could not by any means be
considered a monopoly.
The original purpose Of the Supreme
Court decree dissolving the parent
Standard Oil Co. 20 years ago was to
break up a monopoly then existing.
Since those days the various Standard
Oil companies have been fighting a big
ger competitor and have been COM
peting among themselves. In the case
of the Standard Oil Co. Of California,
which is the leading oil enterprise on
the Coast, while the Standard Oil Co.
of New Jersey operates in Eastern
States, there is no real competition.
The economies of purchase, the pooling
of processes and operations in the ex-
port market are believed to be the main
| reasons for the amalgamation that Is
| planned.
Big business generally will watch the
course of the Government in the oil
cases to see how far the present trend
| toward mergers and combinations Is
possible without interference by the
Department Of Justice.
(Copyright, 1919