“It was a bad year for the trusts,” wrote Edward Sherwood Meade,
Professor of finance in the University of Pennsylvania, at the close of
1907. In support of his comment, Prof. Meade cited the $29,000,000 fine
levied against the Standard Oil, of Indiana, by Judge K. M. Landis,
and the proceedings instituted to dissolve the Oil and Tobacco trusts.
As is well known, Judge Grosscup, of the United States Circuit Court
of Appeals, reversed Judge Landis on technicalities and the Company
was saved from the imposition of the fine through what was universally
execrated as a gross miscarriage of justice. Attorney-General Bonaparte
at the time expressed himself freely in demanding of Congress the
enactment of “a more comprehensive law permitting appeals by the
Government in criminal cases,” instead of the present statutes which
“give to the wealthy defendants in such cases an unfair advantage.”
So 1907 was not such a bad year for the Standard Oil,—but a most
profitable one, as the favor extended it in the Indiana suit enabled
the stock of the Company to soar to nearly 700 forthwith.
The proceedings in the latter part of 1908 by the Government to
dissolve the Standard Oil are the most important ever instituted
against this odious monopoly. It is almost incredible that, after 20
years of immunity, John D. Rockefeller should be forced to “show cause”
why he should no longer be allowed to pursue his taciturn, undisputed
spoliations. Frank B. Kellog, champion “trust-buster” has charge of the
investigations which thus far have presented something the appearance
of opera bouffe. The figures juggled with are so enormous, and the
“forgetfulness” of Rockefeller, Archbold and other testifiers such
conspicuous examples of humorous insolence, that the public mind is
unprepared to hope for a satisfactory outcome to the investigation.
The present administration has but a couple of months more in which to
make its denunciations against the Standard Oil effective, after years
of apparently righteous wrath and no one is greatly to be blamed for
adopting a cynical attitude as to the expected result.
* * * * *
It _has_ been a bad year, this closing 1908, for the Tobacco folk. The
victory of the tobacco growers of the Burley district of Kentucky early
in December over the American Tobacco Company proves what a determined
stand may accomplish on the part of the producer, without entering the
Courts at all. It is safe to say that this Christmas will have been one
of the happiest ever spent by the farmers of Kentucky, among whom some
$20,000,000 will be circulating for tobacco grown and held over, some
of it, for nearly two years. It will make for a peace and good-will in
very truth, for the “night-riding” is considered at an end.
* * * * *
Capitulation to the tobacco growers of a limited section, however,
is the least of the American Tobacco Company’s troubles just now,
it having been declared, in suit brought by the government for its
dissolution, to be a “combination in restraint of trade” which is
amenable to the provisions of the Sherman Act of July 2, 1890. Appeal
from this decision is being taken to the Supreme Court and upon the
result of this “last resort” will hinge all that is vital in reference
to the ability of the government to control the various kinds of
industrial combinations engaged in inter-state traffic.
Judge Lacombe, in voicing the majority opinion of his Court,
observes that: “By insensible degrees, under the operation of many
causes, business, manufacturing and trading alike, has more and more
developed a tendency towards larger aggregations of capital and more
extensive combinations of individual enterprise. It is contended
that, under existing conditions, in that way only can production be
increased and cheapened, stability in reasonable prices secured and
industrial progress assured. But every aggregation of individuals
or of corporations, formerly independent, immediately upon its
formation terminates an existing competition; whether or not some
other competition may subsequently arise. The Act, as above construed,
prohibits every contract or combination in restraint of competition.
What benefits have come from this combination, or from others
complained of, it is not material to inquire, nor need subsequent
business methods be considered, nor the effects on production or
prices.”
[Illustration: Washington _Herald_]
Judge Noyes, who agreed with Judge Lacombe, says, in addition: “It
is of much importance to many people at the present time whether the
defendants have entered into an unlawful combination. It is OF THE MOST
MOMENTOUS IMPORTANCE TO ALL THE PEOPLE FOR ALL THE TIME WHETHER THE
NATIONAL GOVERNMENT HAS POWER TO REACH INDUSTRIAL COMBINATIONS DEALING
ACROSS STATE LINES.”
In his dissenting opinion, Judge Ward took the position that the
purposes of the defendants “should not be made to depend upon
occasional illegal or oppressive acts, but must be collected on their
conduct as a whole.” That they strove “to increase their business and
that their great success is a natural growth resulting from industry,
intelligence and economy, doubtless largely helped by the volume of
business and the great capital at command.”
What view will the Supreme Court take? That “restraint of trade” _is_
“restraint of trade” or that that it is _not_ “restraint of trade”
if only a few laws are broken, only a few competitors hurt and if
defendants are not suffering for want of money?