summarize the development preceding the Standard Oil decision in 1911, primarily in order to show how very widespread the application of the law came to be. Few branches of trade in the United States were wholly immune from prosecution. Yet while the law was being so actively enforced, no affirmative construction of the statute by judicial proceedings ensued. A hit-or-miss policy was pursued by the Department of Justice. But at last, as set forth in the introduction to Chapter XVIII, the necessity of squarely facing the great issues involved was presented by the Standard Oil case. Was the statute to be interpreted as utterly prohibiting combination in any form; or was a meaning to be read into it which should permit somewhat of the liberty which the laws of continental countries allow? The background for an understanding of this decision is constituted by our reprints dealing with the English common law concerning monopoly and the restraint of trade: The established policy toward combination adopted in the continental countries of Europe is outlined in Chapter XX. According to French law, as it appears, only such combinations as conspire to advance prices above a competitive level are prohibited. In Austria there is no criminal penalty against combination; but, as by the English common law concerning restraint of trade, the protection of the courts is withdrawn from such agreements, thereby rendering them null and void. The German practice, by way of contrast, accords complete validity at civil law to combination in lieu of prohibition. This validation of pooling and other devices it seemed best to describe fully in the two concluding chapters. The German potash and steel syndicates embody practically all of the essential details of organizations of this sort. One of the first tasks set for itself by the new Federal Trade Commission being to organize the American export trade, the domestic policy of these foreign countries becomes to the United States a matter of international concern.

1 Pages 453, 475 and 561. Cf. also Harvard Law Review, Vol. XVII, pp. 156 and 217. The English decisions and also the text of the British Companies Act is reprinted in convenient form by our House Committee on Judiciary as "Laws on Trusts and Monopolies, Domestic and Foreign," January 10, 1914.

Many other plans for dealing with the problems of monopoly and large-scale business, other than the one finally embodied in the statutes of 1914 here reprinted, were brought forward during the decade of active discussion of the subject. Federal incorporation was formerly advocated in high quarters;1 and federal license on condition of good behavior was also warmly espoused.2 In view of the decisive step taken by Congress one need not inquire whether these plans were adequate or impracticable; nor whether judicial control alone in place of continuous administrative supervision might have supplied such regulation as the abuses of the time seemed to require. The Supreme Court of the United States has declared that the anti-trust law of 1890, "embraced every conceivable act which could possibly come within the spirit or purpose of prohibitions of the law, without regard to the garb in which such acts were clothed. . . . There was no possibility of frustrating that policy by resorting to any disguise or subterfuge of form, since resort to reason rendered it impossible to escape by any indirection the prohibition of the statute."4 Uncertainty still prevails only as regards "all those normal and usual contracts essential to individual freedom, and the right to make which was necessary in order that the course of trade might be free." The extent of this exception, inserted, if you please, in the act by judicial construction merely, in accordance with the rule of reason remains yet to be defined. But on the whole it would seem to give scope to such activities in business as are fair and reasonable even though they may incidentally diminish competition to some degree. The rigid strait-jacket in which American trade and manufacture found itself before the Standard Oil decision of 1911 and the amendments of the Sherman Act in 1914 has been loosed, in order to permit of such growth and freedom of action as are compatible with the best interests of the community at large. The mandate

1 President Taft's message of 1911; Report of Commissioner of Corporations, 1904; Harvard Law Review, Vol. XXVI, pp. 667-683, and Michigan Law Review, Vol. II, pp. 358 and 506.

2 U. S. Commissioner of Corporations, 1904, 1905 and 1909; National Civic Federation, 1908, 1913.

3 Harvard Law Review, Vol. XVII, 1904, pp. 156-247.

4 P. 595 infra.

given to the newly created Trade Commission to prescribe the precise degree of this relaxation of restraint is a most general and sweeping one, not less so than the order to the Interstate Commerce Commission to prevent all "unreasonable" rates and practices. How fully this body will respond to the summons, and actually contribute to the standardization of business practice in the United States upon a higher plane both of ethics and of efficiency, time alone will reveal.

WILLIAM Z. RIPLEY

TRUSTS, POOLS AND

CORPORATIONS

I

THE MICHIGAN SALT ASSOCIATION 1

WITHIN

the last half century, the amazing comparative growth of capital as a factor in production; the combinations of workingmen arising from their forced association in manufacture according to modern methods, and the ensuing discontent or rather, the frequent and increasingly emphatic expression of discontent - with their lot on the part of the workingmen, as combination has increased their sense of strength; the combinations of capitalists and the startling revelations of power afforded by such organizations as the Standard Oil Company and the coal syndicates of Pennsylvania, -all these things have lent to the study of combinations among either capitalists or workingmen, or of coöperative unions of the two, an especial interest. More frequently the subject has been studied with reference to workingmen, the advantages and disadvantages to them; but it seems no less desirable, from the standpoint of the economist at least, that combinations among capitalists, either for purposes of protection against unreasonable demands of workingmen or for their own interests as producers, should be studied; and that the investigation should. cover the influence of such combinations on the consumers as well as upon the capitalists themselves.

The story of the Standard Oil Company has been told more than once, in words eloquent with the conviction of the danger threatening our government and civilization from the growth of such corporations. The consumers of anthracite coal throughout the United States during the past two years, have needed 1 From the Political Science Quarterly, Vol. III, 1888, pp. 78–98. For additional references, see footnote on p. 21 infra.