The Dominion. TUESDAY, JUNE 27, 1911. THE TRUSTS IN AMERICA.

Dominion, Volume 4, Issue 1164, 27 June 1911, Page 4

The Dominion. TUESDAY, JUNE 27, 1911. THE TRUSTS IN AMERICA.

The action of the American Government against the lumber combination, mentioned in one of yesterday's cable messages, is of significance, coming so quickly after the decisions in the suits against the Standard Oil Company and the American Tobacco Company. The full text of the judgment against Standard Oil has arrived by mail, together with an enormous mass of criticism by newspapers, lawyers, legislators, and financiers. The Supreme Court was unanimous in holding that the Trust was in violation of the Sherman law, and an order of dissolution was made. The decision, strangely enough, appeared to satisfy everybody, including the Oil Company and the other leading corporations, for a loophole appeared to have been left by the Court for Trusts clever enough to get through it. It was held that the company was proved to have "operated to destroy the potentiality of criticism," and that tfcere had been established, in addition to proof of actual_ monopoly, a prima facie presumption also "of intent and purpose to maintain the dominancy of the oil industry .... with the purpose of excluding others from the trade and thus centralising in the combination perpetual control." At the same time, however, the Court, Judge Haelan dissenting, laid down a "rule of reason" :

It was expressly designed not to unduly limit the application of the Act by precise definition, but while clearly fixing a standard—that is, defining tho ulterior boundaries which could not be transgressed with impunity—to leave it to be determined by tl e light of reason, guided by the principles of law . . . whether, any particular act or contract was within tho. contemplation of the statute. ... ■ ■

This "rule of reason" was hailed with great satisfaction by financiers, and it was on account of it, apparently, that oil stock rose sharply on tlic day after the judgment. The progressive anti-Trust legislators and newspapers were a little despondent, and asserted that the Court had no right to insert the word "unreasonable" before "restraint of trade" in the statute.

Tho President has all along taken the stand that there cannot bo any express distinction made between "good" Trusts and "bad" Trusts, and, further, that the judiciary should not be' burdened with the duty of deciding what is, and what is not, "reasonable" restraint of trade. He has often stated his view that the Act is aimed, not at mere capital aggregation, but at "the abuses of business," and that it is entirely immaterial whether the community gains or loses, economically, if those "abuses'"' are proved. The judgment was taken—rather hastily, as some maturer criticisms indicate—as a blow to the Taft doctrine, and this view was strengthened by the emphasis of Justice Harlan's dissent from "the rule o£ reason." Judge Haelan emphasised the fact that in the past tho Court had expressly rejected that rule, and he considered that "to over-reach the action of Congress merely by judicial construction, that is, by indirection, is a blow at the integrity of our governmental system." Latest advices, however, showed that the President was not really perturbed. Many leading jurists hold that the Court has left matters just where they, were, and that predatory corporations have no loophole of escape from condemnation. That they may be able -to reorganise themselves so as to avoid prosecution is another matter. As one critic points out, "there ha:; at least been no great difficulty in the past for observant men to frame their own opinion as to whether, in methods, scope, and purpose, a given combination did or did not transgress the bounds of reasonable trade restraint," and the task of the Courts, and tho basis for performing it, arc the same as that of any reasonable man. It is certainly pretty clear that the fears of the anti-Trust party and the hopes of the opponents of anti-monopoly legislation are without a good basis. Discretion is always left to judges —discretion of some kind, sometimes of a vitally important kind. The Chief Justice, in delivering the Court's judgment, said nothing to indicate any intention of looking to the concrete good or bad effects of the conduct of a prosecuted combination; as before, the Court will look simply at nature of the acts of that combination.

The suit against the Lumber Trust is specially important, as it is said to be one of the.first of a series designed to break up agreements between retailers to maintain high prices. It is alleged that the lumber dealers have an elaborate "black-list" system, affecting not only private consumers but many great industrial concerns also, circulars being sent out classifying consumers as "proper" and "improper." The Government's "bill" alleges that the retailers have conspired among themselves to prevent manufacturers.and wholesalers from selling lumber direct to the consumer, and that hundreds of consumers have been compelled buy lumber from retailers at much higher prices than they would have paid to wholesalers. Retailers breaking the fixed rates have been_ fined, and wholesalers dealing with consumers have been boycotted. The charge against the retailer;;, which is really a charge of simple conspiracy, is supported by some sensational documents. The methods employed by the retailers involved are in vogue throughout the United States, and it is this which gives a special importance to the suit. The Government regards the case as one of simple conspiracy, into which any issue involved by the newly-stated "rule of reason" does not enter, but it lays only a minor stress on this aspect of the matter, the main object being a decision upon the question how far combinations of retailers may go to prevent the ultimate consumer from dealing directly with the- wholesaler, or jproducer,.