nopolized lines has been very high. Thus, the rate of profit for grain and grass harvesting machines is very much higher than the rates for such lines as wagons, manure spreaders, and twine, where the company encounters a greater degree of competition. The rate of some of the new lines, however, has been liberal.

"Generally speaking, the prices obtained by the company on foreign sales are relatively higher than those in the domestic market, but claims made by the company that the net return is invariably greater were not sustained by its records; in some important instances at least the foreign nettings were lower than the domestic.

Conclusion

"It appears, therefore, that the International Harvester Co.'s position in the industry is chiefly attributable to a monopolistic combination in the harvesting-machine business, certain unfair competitive methods, and superior command of capital."

This summarization emphasizes in its very closing paragraph that "certain unfair competitive methods" are one of the chief reasons why the Harvester combination is dominant in its type of industry. This would seem to deny to it the appellation of a "good trust." Let it be noted, however: (1) That the more detailed summary which follows this letter of transmittal closes thus:

"While its financial advantage has been supplemented by the adoption of certain objectionable competitive methods, the mainspring of its power was the consolidation of the leading competitive factors in the industry."

3 per cent. on its $120,000,000 common stock in its first year and 4 per cent. the next three years. The preferred stock, introduced in 1907, has paid 7 per cent. annually ever since and the common stock 4 per cent. annually until April, 1911, and 5 per cent. since that time. Dividends are payable quarterly.

*U. S. Bureau of Corporations Report on the International Harvester Co., p. 37.

This fuller summary seems clearly to give a merely supplementary weight, at most, to the "objectionable competitive methods."

(2) That the main report shows that some of the alleged practices listed as "unfair competitive methods," notably the maintenance of pretended competitors, the contracts for exclusive handling of this corporation's goods, and the dictation of the retailers' selling prices, were merely historic and have not been policies of the corporation since its early years.

(3) Others of these listed "unfair competitive methods" were disavowed by the corporation's officials and characterized by them as mistaken methods used by unwise field agents of the corporation. For example, an assistant general manager of the Harvester Company is quoted at length as opposed to "full-line forcing." Among other things he states: "It is wrong in principle we have repeatedly called in men and pointed out the absolute folly of trying to do business along that line.

(4) Still other of the charges may fairly be questioned as "objectionable." For example, many complaints are recorded against the common practice, by the Harvester combination, of extending long-time credits. Quoting the Report: "One competitor alleges that in some cases the International Harvester Co., in selling its engines takes payment in rates maturing in the fall of four consecutive years, compared with 6, 9, and 12 months at longest for his concern. He said his own company cannot tie up its capital by allowing such long terms. He stated that the prices of the International Harvester Company are pretty well maintained, but that the long credit extended by the company is attractive to some purchasers and gives it a great advantage."t

*U. S. Bureau of Corporations Report on the International Harvester Co., p. 809. †Ibid., p. 323.

That is, the combination is here condemned by a competitor because it shares somewhat with final consumers its advantages over small competitors by reason of its great financial resources. This stands as a complaint, but, impartially considered, it surely cannot stand as an objectionable practice.

When allowance is made for these four points, presented in this very report, the weight of the charge of clearly unfair competitive methods as a charge for the past decade against this Harvester combination, approximates the negligible, and this Trust appears to have an almost perfectly clean record of conduct toward the public generally, its competitors and its stockholders.

In the Tobacco Trust case the court gave weight to the unfair competitive practices established against this Trust; in the Oil case, the court noted the full charges of unfair competitive practices and noted also the denials or explanations on the part of the trust representatives, but passed judgment without giving any weight to these accusations of bad competitive practice. In the Harvester case the industrial effectiveness of combination is in evidence, and almost no objectionable competitive practices stand against the combination. This case, if decree is given against the combination, will still more clearly than did the Oil decision, serve notice on the great industrial combinations of the United States that they are illegal and subject to dissolution by the court on the sole ground of their dominance in their industrial field and regardless of established records possibly wholly free from bad practices of any kind and possibly well filled with worthy service in terms of industrial progress.

APPENDIX E

STATE ANTI-TRUST LAWS IN THE UNITED

STATES*

1. TEXAS

2. NEW JERSEY

ART. I, SEC. 26.

1. TEXAS

Constitution

Perpetuities and monopolies are contrary to the genius of a free government and shall never be allowed.

ART. X, SEC. 5. No railroad or other corporation, or the lessees, purchasers, or managers of any railroad corporation, shall consolidate the stock, property, or franchises of such corporation with, or lease or purchase the works or franchises of or in any way control any railroad corporation owning or having under its control a parallel or competing line; nor shall any officer of such railroad corporation act as an officer of any other railroad corporation owning or having the control of a parallel or competing line.

SEC. 6. No railroad company organized under the laws of this state shall consolidate by private or judicial sale or otherwise with any railroad company organized under the laws of any other state or of the United States.

(Adopted, November 24, 1875.)

*For full text of all State Anti-Trust Laws and Constitutional Amendments, in force in 1914, the reader is referred to a government publication, Laws on Trusts and Monopolies, revised edition, 1914.

Statutes

That a trust is a combination of capital, skill or acts by two or more persons, firms, corporations, or associations of persons, or either two or more of them, for either, any or all of the following purposes:

1. To create or which may tend to create or carry out restrictions in trade or commerce or aids to commerce or in the preparation of any product for market or transportation, or to create or carry out restrictions in the free pursuit of any business authorized or permitted by the laws of this state.

2. To fix, maintain, increase, or reduce the price of merchandise, produce, or commodities, or the cost of insurance, or of the preparation of any product for market or transportation.

3. To prevent or lessen competition in the manufacture, making, transportation, sale or purchase of merchandise, produce, or commodities or the business of insurance, or to prevent or lessen competition in aids to commerce, or in the preparation of any product for market or transportation.

4. To fix or maintain any standard or figure whereby the price of any article or commodity of merchandise, produce, or commerce, or the cost of transportation, or insurance, or the preparation of any product for market or transportation, shall be in any manner affected, controlled, or established.

5. To make, enter into, maintain, execute or carry out any contract, obligation, or agreement by which the parties thereto bind, or have bound themselves not to sell, dispose of, transport, or to prepare for market, or transportation any article or commodity, or to make any contract of insurance at a price below a common standard or figure, or by which they shall agree in any manner to keep the price of such article or commodity or charge for transportation or insurance, or the cost of the preparation of any product for market