Needed Changes in the Anti-Trust Laws

AuthorRush C. Butler
Published date01 January 1930
Date01 January 1930
DOIhttp://doi.org/10.1177/000271623014700125
Subject MatterArticles
189
Needed
Changes
in
the
Anti-Trust
Laws
By
RUSH
C.
BUTLER
Chairman,
Commerce
Committee,
American
Bar
Association,
Chicago,
Illinois
THE
few &dquo;combinations&dquo;
and
&dquo;trusts &dquo;
against
which
the
legisla-
tive
vigor
of
Congress
was
directed
by
the
enactment
of
the
Sherman
Law
in
1890
were
insignificant
in
size
and
power
in
comparison
with
many
or-
dinary
present-day
corporations,
some
of
which
have
experienced
judicial
approval
and
others
of
which
are
well
assured
of
their
complete
conformity
to
the
Law.
The
question
naturally
arises
as
to
how
this
has
come
about
and
what
may
be
the
general
effect
of
the
anti-trust
laws
on
business
in
the
years
to
come.
In
order
properly
to
discuss
this
phase
of
the
subject
a
brief
reference
to
the
history
of
the
Sherman
Law
is
necessary.
The
Sherman
Law
goes
beyond
the
rule
of
conduct
embodied
in
the
com-
mon
law,
in
that
the
former
in
unmis-
takable
language
makes
unlawful
every
contract
in
restraint
of
trade,
no
matter
how
heavy
or
how
light
the
restraint
or
whether
reasonable
or
unreasonable.
It
further
differs
from
the
common
law
in
failing
to
provide
that
the
courts
will
not
afford
a
remedy
to
a
party
to
a
contract
violating
the
common
law
rule
and
by
including
a
paragraph
making
every
violation
of
the
Act
a
criminal
offense
and
subjecting
the
offender
to
a
penalty
of
fine
and
imprisonment.
The
criminal
provi-
sion
of
the
Act
is
a
complete
departure
from
the
common
law
and
is
not
only
the
cause
of
much
of
the
difficultly
experienced
by
the
courts
in
interpret-
ing
the
Act
as
a
criminal
statute,
but
is
an
economic
menace.
It
is
thus
apparent
that
the
legisla-
tive
and
not
the
judicial
branch
of
government
is
responsible
for
the
difficulties
arising
under
the
Sherman
Law.
JUDICIAL
DECISIONS
The
application
of
the
Sherman
Law
to
every
contract
restraining
trade
was
limited
by
judicial
decisions
rendered
in
1911
in
the
Standard
Oil
and
To-
bacco
cases
so
that
it
may
be
broadly,
if
not
accurately
stated,
that
now
only
such
contracts
as
unreasonably
restrain
trade
are
unlawful.
In
those
cases
the
so-called &dquo;rule
of
reason&dquo;
was
held
to
supplement
the
statute
and
to
afford
the
true
guide
in
establishing
the
legality
or
illegality
of
contracts
in
restraint
of
trade.
Under
the
Court’s
interpretation
the
merger,
consolida-
tion
or
combination
of
formerly
com-
peting
units
was
held
lawful
if
the
resultant
restraint
were
reasonable
and
not
unreasonable.
The
decisions
in
these
cases
were
necessary.
They
were
made
in
recognition
of
the
operation
of
economic
law.
No
more
forceful
illustration
of
the
domination
of
eco-
nomic
over
statutory
law
can
anywhere
be
found.
Without
such
interpreta-
tion
the
statute
must
certainly
have
been
repealed
or
business
and
industry
must
have
failed
to
grow
and
expand
commensurately
with
the
development
of
the
country.
Since
that
interpreta-
tion
of
the
law
it
is
quite
generally
understood
that
in
the
absence
of
conspiracy
to
monopolize,
agreements
of
consolidation
and
merger
are
proper,
provided
only
that
the
resultant
unit
be
not
so
large
as
unduly
to
dominate
the
competitive
field.
The
present
prosperity
of
the
coun-
try
is
largely
due
to
the
fact
that
the
courts
have
freed
mergers
and
con-
solidations
from
the
limitations
im-
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