Grand Rapids Herald-Review Newspaper, December 6, 1911, Page 6

PAGE 81x GRAND RAPIDS HERALD-REVIEW, WEDNESDAY, DEC. 6, 1911. BUSINESS AND PROFESSIONAL DIRECTORY dees sereetedies OF GRAND RAPIDS, MINN. s Peeveneeveneveusverererdrcrcrrertcerrrverrrsrrcenl A. C. Bossarp L. M. BoLrer President Cashier FIRST STATE BANK Savings Department Farm Mortgage Loans GRAND RAPIDS MINNESOTA FRANK MYERS Dray and Express Line PHONE 218 Stazd—Corver 3ré@ Street-andsLeland Ave. GRAND RAPIDS, MINN. A. L. ROECKER Merchant Tailor Leland Avenue between 3rd and 4th Streets GRAND RAPIDS, MINN. D, M. GUNN POKEGAMA HOTEL FIRST CLABS ACCOMODATIONS Corner Leland Avenue and Third Street GRAND RAPIDS, MINN. ]. 0. JOHNSON & CO. Meats and Provisions FRED AND HAY Corner Leland Avenue and 4th Street GRAND RAPIDS, MINN. KREMER & KING ABSTRACTS OF TITLE Real Estate and Fire Insurance Office Pokervama Hotel Block GRAND RAPIDS, MINN. REISHUS-REMER LAND CU. REAL ESTATE AND FARM LANDS Office on 4th St. between Leland and Sleeper Avenvea GRAND RAPIDS, MINN. Wreerrernnnrnnnconconnsooencooeere W. & MYERS CITY LIVERY Office and Barn beteeen Fifth and Sixth Streets on Kindred Avenue GRAND RAPIDS, MINN. THWING & ROSSMAN Attorneys at Law Office in Itasca Mercantile Co. Building Opposite Post Office GRAND RAPIDS, MINN. weer. nnanne CHESTER L. PRATT Attorney at Law COURT COMMISSIONER Office on Second Floor of Court House GRAND RAPIDS, MINN. DR. F. R HARRISON DENTIST Office in the McAlpine Block Phone No. 6 GRAND RAPIDS, MINN. 00000000000000000000000000 00000 DR. G. F. SCHMIDT Physician and Surgeon Office in the McAlpine Block, Phone 6, GRAND RAPIDS, MINN. HERALD-REVIEW Book and Job Printing ‘ALS WORK GUARANTEED Kelnad Avo. Booween éth and 5th Serects @Gmaxp Rariws, Minn. Alfred Blomberg Wants to buy all the Ties on Great Northern or Minne- apolis & Rainy River. PAY HIGHEST MARLET PRICE FOR SAME ALFRED BLOMBERG Jesse Lake - - F. P. SHELDON, P. J. SHELDON President Vice-President C. E. AIKEN. Cashier FIRST NATIONAL BANK Transacts a General Banking Business GRAND RAPIDS, MINN. nnoes DR. COSTELLO DENTIST * Office n First National Bank Building GRAND RAPIDS MINNESOTA JOHN COSTELLO Costello’s Ice Cream BOTTLING WORKS, MINERAL WATERS Between 3rd and 4th Streets on Hoffman Aye. GRAND RAP1D8, MINNESOTA FRANK F. PRICE LAWYER ONOUTY ATTORNEY Office in First National Bank Building | GRAND RAPIDS, MINN. C, ©. McCARTHY LAWYER Office in Marr Building, Corner Kin ired Aye- nueand Third Street GRAND RAPIDS, MINN. H. FE. GRAFFAM Lands and Insurance Leland Avenue Opposite the Postoffice GRAND RAPIDS, MINN. GEORGE BOOTH Cigar Manufacturer Boorn’s BoQuets Between 2nd and 3rd Streets on Kindred Ave. GRAND RAPIDS, MINN. POO ORIRDDEILIIIIDDD IDOL DODD DODD D DOE DR. CARROL C. CARPENTER M. Physician and Surgeon Office over Itasca Mere. Co. Residence first house North of Library GRAND RAPIDS. MINN. CHARLES W. FOREST City Dray and Express Line Phone 134-2 Stand—UVorner Leland Avenue and 3rd Stree8 GRAND Rapips, MINN. COOP TIEOLTIOT IR ODL DOD DODOL DOL IOD LS WILL NISBETT Practical Watchmaker and EnFdaver COMOLETB CEWELRY LINE Bet. 2nd and 8rd Streetson Kindred Avenue GRAND Rapips, MINN. Le wenaaneienad DR. THOMAS RUSSEL Physician and Surgeon Office and Residence Corner Leland Avenue and Sixth Street GRAND RAPIDS, MINNESOTA E, 8. BROWNE Heating and Plumbing OFFICE AND SHOP On Leland Avenue between 4tb and 5th Sts. GRAND RAPIDS, MINN, W. Q YOST Farm, Meadow, Timber & Mineral Lands LOANS ON FARM AND OITY PROPERTY Office Pokegama Hotel Bldg. GRAND RAPIDS MINN. 000000000000000000000000000000008, F, E. REUSSWIG Furniture and Undertaking LICENSED EMBALMER Phones: Res. No. 127, Office No. 33; NILES & AITON Flour, Feed and Hay FARM SUPPLIES AND MACHINERY Minnesota | | 3*4 8t. Between Kindred and Houghton Ave, RAPIDS, et GRAND JUDGE SCORES THE M’NAMARAS (Continued from page one.) graphed Gompers at tne reaerauon convention in Atlanta to send some man here in whom he had the utmost confidence, telling him that most im- portant complications had arisen. He 'sent E. H. Nockels, secretary of the Chicago Federation of Labor. Nock- els came here two days before the pleas were entered. I laid the situa- tion before him. At first he advised against the pleas of guilty but when we showed him the strength of the prosecution’s case he agreed that there was nothing else to do but to plead guilty and gather what we could from the concessions we would receive for saving the county an enor. mous expense.” MESSAGE OF THE PRESIDENT (Continued from page one.) the dissolution of this comPination, al- rected the transfer and pro rata distri- bution by the New Jersey company of the stock held by it in the thirty-seven corporations to and among its stock holders, and the corporations and indi- vidual defendants were enjoined froin conspiring or combining to restore such monopoly, and all agreements be tween the subsidiary corporations tend ing to produce or bring about further violatious of the act were enjoined. In the tobacco cuse the court found that the individual defendants. twen- ty-nine in uumber, bad been engaged in a successful effort to acquire com- plete dominion over the manufacture, sale and distribution of tobacco in this country and abroad and that this had been done by combinations made witb a purpose and effect to stifle competi- tion. contro! prices and establish a monopoly. not only in the manufacture of tobacco, but also of tin foil and lic- orice used in its manufacture and of | its products of cigars. cigarettes and snuffs. The tobacco suit presented a far more complicated and difficult case than the Standard Oil suit for a decree which would effectuate the will of the court and end the violation of the stat- ute. There was here no single hold- ing company, as in the case of the Standard Oil trust. The main company | was the American Tobacco company, @ manufacturing, selling and holding | company. The plan adopted to de | stroy the combination and restore com- | petition involved the redivision of the capital and plants of the whole trust between some of the companies cgp stituting the trust and new companies organized for the purposes of the de- cree and made parties to it and num bering, new and old, fourteen Situation After Readjustment. The American Tobacco company (old), readjusted capital $92,000,000; the Liggett & Meyers Tobacco company (new), capital $67,000,000; the P. Loril* | lard company (new), capital $47,000, 000. and the R. J. Reynolds Tobacco company (old), capital $7,525,000, are chiefly engaged in the manufacture and sale of chewing and smoking to- bacco and cigars. The former one tin foil company is divided into two, one of $825,000 capital and the other of $400,000. The one snuff company is divided into three companies, one with a capital of $15,000,000, another with a capital of $8.000.000 and a third with a capital of $8.000,000. The licorice companies are two, one with a capital of $5,758.300 and another with a capi- tal of $2,000.000. There is also the British-American Tobacco company, a British corporation. doing business abroad with a capita) of $26,000,000. the Porto Rican Tobacco company. with a capital of $1,800,000. and the | corporation of United Cigar Stores. with a capital of $9,000.000. Under this arrangement each of the different kinds of business will be dis tributed between two or more compa nies with a division of the prominent brands in the same tobacco products. 80 as to make competition not only possible. but necessary. Thus the smoking tobacco business of the coun try is divided so that the present in LOST OR STOLEN—Black and tan Fox hound. Answers to the name} Romeo. Two dollars will be paid for| information leading to his recovery. —P. C. Warner. | WANTED—Plain sewing at home} and men’s laundry work—Mrs. Ells- worth, Clough Ave., between Fourth and Fifth streets. | TEAM FOR SALE—Grey team, aged five and seven years, weight} 3,000 pounds—Neil Mullins, La prairie. For Sale. One Victor phonograph, 50 records all good selections, and one black fur robe, 10 links of new Russ‘an | iron stove pipe. 3 elbows.—Phone No 168. | For Sale. Being overstocked, I will sell a number of good milch cows, of the Guernsey and Jersey strain, alse some Barred Plymouth Rock cok erels and other thoroughbred chick- ens. —A. M. Sisler, Laprairie, Minn 2-18, | accomplished the dependent companies have 21.39 per cent, while the American Tobacco com- pany will have 33.08 per cent. the Lig- gett & Meyers 20.05 per cent, the Loril- lard company 22.82 per cent and the Reynolds company 2.66 per cent. The stock of the other thirteen companies. both preferred and common, bas been taken from the defendant American Tobacco company and has been dis- tributed among its stockholders. All covenants restricting competition have been declared null and further per formance of them has been enjoined. The preferred stock of the different companies has now been given voting power which wes denied it under the old organization. The ratio of the pre- ferred stock to the commou was us 78 to 40. This constitutes a very decided change in the character of the owner ship and control of each company. In the original suit there were twen- ty-nine defendants, who were charged with being the conspirators through whom the illegal combination acquired | and exercised its unlawful dominion. Under the decree these defendants will hold amounts of stock in the various distributee companies ranging from 41 per cent as a maximum to 28% per cent as a minimum, except in the case of one smal! company, the Porto Rican Tobacco company. in which they will hold 45 per cent. The twenty-nine in- dividual defendants are enjoined for three years from buying any stock ex- cept from each other, and the group is thus prevented from extending its con- trol during that period. All parties to, the suit and the new companies who | are made parties are enjoined perpet- ually from in any way effecting any combination between any of the com- panies in violation of the statute by way of resumption of the old trust. Each of the fourteen companies is en- joined from acquiring stock in any of the others. All these companies are | enjoined from having common direc- tors or officers, or common buying or | selling agents. or common offices, or lending money to each other. Size of New Companies. Objection was made by certain in- dependent tobacco companies that this | settlement was unjust because it left companies with very large capita! in | active business and that the settle- ment that would be effective to put all | on an equality would be a division of the capita! and plant of the trust into small fractions in amount more near- ly equal to that of each of the inde- pendent companies. This contention results from a misunderstanding of the anti-trust law and its purpose. It is not intended thereby to prevent the accumulation of large capital in busi- ness enterprises in which such a com- bination can secure reduced cost of production, sale and distribution. It is directed against such an aggrega- tion of capital only when its purpose is that of stifling competition, enhanc ing or controlling prices and establish ing a monopoly. If we shall have by the decree defeated these purposes and restored competition between the large units into which the capital and plant have been divided we shall have nseful purpose of the statute. Confiscation Not the Purpose of the Statute, It is not the purpose of the statute to confiscate the property and expital of the offending trusts. Methods of punishment by fine or imprisonment of the individual offenders. by fine of the corporation or by forfeiture of its goods in transportation are provided. but the proceeding in equity is a spe cific remedy to stop the operation of the trust by injunction and prevent the future use of the plant and capita! in violation of the statute. Effectiveness of Decree. I venture to say that not in the his- tory of American law has a decree more effective for such a purpose been entered by a court than that against the tobacco trust. As Circuit Judge Noyes said in his judgment approving the decree: “The extent to which it has been necessary to tear apart this combina- tion and force it into new forms with the attendant burdens ought to demon- strate that the federal anti-trust statute is a drastic statute which accomplishes effective results, which so long as it stands on the statute books must be obeyed and which cannot be disobey- ed without incurring farreaching pen alties. And, on the other hand, the successful reconstruction of this or- ganization should teach that the effect of enforcing this statute is not to de stroy, but to reconstruct: not to de molish, but to recreate in accordance with the conditions which the congress has declared shall exist); among the People of the United States.” Common Stock Ownership. It has been assumed that the pres- ent pro rata and common ownership in all these companies by former stock- holders of the trust would insure a continuance of the same old single con- trol of all the companies into which the trust has by decree been disinte- grated. This is erroneous and is based upon the assumed inefficacy and innoc uousness of judicial injunctions. The companies are enjoined from co-opera tion or combination; they have differ ent managers. directors. purchasing and sales agents. If all or many of the numerous stockholders, reaching into the thousands. attempt to secure concerted action of the companies with a view to the control of the market their number is so large that such an attempt could not well be concealed. and its prime movers and all its partic- ipants would be at once subject to con- tempt proceedings and imprisonment of a summary character The immedi ate result of the present situation will necessarily be activity by all the com panies under different managers, and then competition must follow or there will be activity by one company and stagnation by another. Only a short Ness will inevitably lead to a change | sm ownership of the stock, as all op- portunity for continued co-operation must disappear. Those critics who speak of this disintegration in the trust as a mere change of garments have not given consideration to the inevitable working of the decree and understand little the personal danger of attempt- ing to evade or set at naught the sol- emn injunction of a court whose object is made plain by the decree and whose fhibitions are set forth with a detail and comprehensiveness unexampled ip the history of equity jurisprudence. Voluntary Reorganizations of Other Trusts at Hand. The effect of these two decisions has led to decrees dissolving the combi { i i i | | tion of manufacturers of electric lamps, a southern wholesale grocers | association, an interlocutory decree against the powder trust, with direc- tions by the circuit court compelling dissolution, and other combinations of a similar bistory are now negotiating with the department of justice looking to a disintegration by decree and re- organization in accordance with law It seems possible to bring about these reorganizations without general busi- ness disturbance. Movement For Repeal of the Anti- x trust Law. But now that the anti-trust act is seen to be effective for the accomplish- ment of the purpose of its enactment we are met by acry from many differ- | ent quarters for its repeal. It is said to be obstructive of business progress. to be an attempt to restore old fash- | foned methods of destructive competi- tion between small units and to make impossible those useful combinations of capital and the reduction of the cost of production that are essential to con- tinued prosperity and normal growth. In the recent decisions the supreme court makes clear that there is noth- ing in the statute which condemns combinations of capital or mere big- | Bess of plant organized to secure econ omy in production and a reduction of its cost. It is only when the purpose | or necessary effect of the organization and maintenance of the combination or the aggregation of immense size are the stifling of competition. actual and potential, and the enhancing of prices and establishing a monopoly that the | statute is violated) Mere size is no sin against the law The merging of | two or more business plants necessari- | ly eliminates competition between the | units thus combined, but this elimina tion is in contravention of the statute only when the combination is made for purpose of ending this particular com- petition in order to secure control of | and enhance prices and create a mo nopoly | Lack of Defi ; The complaint is made of the stat | ute that it is not sufliciently definite in its description of that which is for. bidden to enable business men to avoid (its violation The suggestion is that ness In the Statute. we may bave a combination of two | corporations which may rtn on for years and that subsequently the at- torney genera! may conciude that it | was a violation of the statute and that | which was supposed by the combiners | to be innocent then turns out to be a | combination in violation of the statute The answer to this hypothetical case is that when men attempt to amass | such stupendous capital as will enable them to suppress competition, control prices and establish a monopoly they | know the purpose of their acts. Men do not do such a thing without baving it clearly in mind. If what they do is merely for'the purpose of reducing the | cost of production, without the thought of suppressing competition by use of the | bigness of the plant they are creating, | then they cannot be convicted at the | time the union is made. nor can they | be convicted later unless it happen (that later on they conclude to sup- press competition and take the usual | methods for doing so and thus estab- lish for themselves a monopoly. They | can in such a case hardly complain if | the motive which subsequently is dis- | closed is attributed by the court to the | original combination. New Remedies Suggested. Much is said of the repeal of this statute and of constructive legislation intended to accomplish the purpose | and blaze u clear path for honest mer- | chants and business men to follow. It | may be that such a plan will be | evolved, but I submit that the discus- sions which have been brought out in | recent days by the fear of the con- | tinued execution of the anti-trust law | have produced nothing but glittering | generalities and have offered no line of distinction or rule of action as defi- | nite and as clear as that which the su- ; preme court itself lays down in en | forcing the statute. | Supplemental Legislation Needed, Not Repeal or Amendment. I see no objection, and indeed I can see decided advantages, in the enact- | ment of a law which shall describe and denounce methods of competition | which are unfair and are badges of the (unlawful purpose denounced in the | anti-trust law. The attempt and pur pose to suppress a competitor by un- derselling him at a price so unprofita ble as to drive him out of business or the making of exclusive contracts with customers under which they are re- quired to give up association with oth er manufacturers and numerous kin dred methods for stifling competition and effecting monopoly should be de scribed with sufficient accuracy in a | criminal statute on the one hand to lenable the government to shorten its (task by prosecuting single misdemean |ors instead of an entire conspiracy and ‘on the other hand to serve the purpose of pointing out more in detail to the business community what must be | avoided. Federal Incorporation Recommended. In a special message to congress on Jan. 7, 1910, I ventured to point out the disturbance to business that w: 3 probably attend the dissolution of offending trusts. I said: “But such an investigation and pos- sible prosecution of corporations whose prosperity or destruction affects the comfort not only of stockholders, but of millions of wage earners, employees and associated tradesmen, must neces- sarily tend to disturb the confidence of the business community. to dry up the now flowing sources of capital from its places of hoarding and pro- duce a halt in our present prosperity that will cause suffering and st circumstances among the in many for the faults of the guilty The question which ! wish i message to bring clearly to th sideration and discussion of cougress is whether, in order to avoid | possible business danger. some cannot be done by which these busi ness combinations may be offered « ” means, without great financial turbance, of changing the cha organization and extent of their busi- ness into one within the lines of the jaw under federal control and super vision. securing compliance with the anti-trust statute. “Generally in the industrial combina tions called ‘trusts’ the principal busi ness is the sale of goods in many states and in foreign markets—in other words the interstate and foreign business far exceeds the business done in any one state. This fact will justify the fed- eral government in granting a federal charter to such a combination to make and sell in interstate and foreign com- dis ture under such limitations as will se- cure a compliance with the anti-trust law. It is possible so to frame a stat- ute that, while it offers protection to a federal company against harmful, vex- atious and unnecessary invasion by the states, it shall subject it to reasona ble taxation and control by the states with respect to its purely local busi- ness. * * * “Corporations organized under this act should be prohibited from acquir- ing and holdirg stock in other corpo- rations (excvpt for special reasons, authority). thus avoiding the creation under national auspices of the holding company with subordinate corporations in different states, which has been such an effective agency in the crea tion of the great trusts and monopo Hes. “If the prohibition of the anti-trust act against combinations in restraint of trade is to be effectively enforced it is essential that the national govern- ment shall provide for the creation of nationa! corporations to carry on a le gitimate business throughout the Unit- ed States. The conflicting laws of the different states of the Union with re spect to foreign corporations make it difficult, if not impossible, for one cor poration to comply with their require | ments so as to carry on business in « number of different states.” I renew the recommendation of the enactment of a general law providing for the voluntary formation of cor | porations to engage in trade and com- | merce among the states and with for eign nations Every argument which was then advanced for such a law and every explanation which was at that time offered to possible objections has been confirmed by our experience since the enforcement of the anti-trust stat ute has resulted in the actual dissolu- , tion of active commercial orguniza- | tions. | It is even more manifest now than , it was then that the denunciation of conspiracies in restraint of trade should not and does not mean the de nial of organizations large enough to be intrusted with our interstate and foreign trade. It has been made more’ clear now than it was then that a purely negative statute like the anti- | trust law may well be supplemented by specific provisions for the building up and regulation of tegitimate na- | tional and foreign commerce. | Government Administrative Experts Needed to Aid Courts In Trust Dissolutions. The drafting of the decrees in the” dissolution of the present trusts. with la view to their reorganization into le | gitimate corporations, bas made it es pecially apparent that the courts are not provided with the administrative machinery to make the necessary in- quiries preparatory to reorganization or to pursue such inquiries, and they should be empowered to invoke the | aid of the bureau of corporations in | determining the suitable reorganiza- tion of the disintegrated parts. Tbe cireuit court and the attorney general were greatly aided in framing the de cree in the tobacco trust dissolution by an expert from the bureau of corpora- | tions. posed. ° 1 do not set forth in detail the terms and sections of a statute which might | supply the constructive legislation per- |mitting and aiding the formation of |combinations of capital into federal | corporations. They should be subject to rigid rules as to their organization and procedure, including effective pub-* licity. and to the closest supervision as to the issue of stock-and bonds by an executive bureau or commission in the department of commerce and \abor. to which in times of doubt they might well submit their proposed plans for future business. It must be distinctly understood that incorporation under a federal law could not exempt the com- pany thus formed and its incorporators and managers from prosecution under the anti-trust law for subsequent il- legal conduct, but the publicity of its « procedure and the opportunity for fre- quent consultation with the bureau or commission in charge of the incorpora- seoste, ooonamns af tts (Continued om Cohasset page.) merce the products of useful manufac- * upon approval by the proper federal ©