« PředchozíPokračovat »
pany situation is an illustration of that. The Federal Trade Commission condemned the price. The corporation fixed the price 50 per cent higher--not only did not conform to the opinion, but fixed the price 50 per cent higher—and is still charging that price, and we are in the court with it and can not get anywhere.
Now, another thing. I think that this section 2 is exclusive in its operation upon a case such as we have just been supposing to exist.
Senator Walsh of Montana. What do you mean by “exclusive”?
Mr. PRESTON. I do not think there is any trust law or anything else that will apply in a case of that sort, if section 2 is enacted.
Senator WALSH of Montana. I understand that is the purpose of it. Mr. PRESTON. Then we do not disagree on that point.
Senator WALSH of MONTANA. I may be wrong about that, but I understood that the very purpose of this act was to relieve these organizations from prosecution under the Sherman Act.
Mr. PRESTON. Well, yes; I suppose so. It is very hazy to me what they do mean.
Senator WALSH of Montana. I want to call your attention to another thing. In the bill that was before us at the last session this language occurs:
Such producers may organize and operate such associations and make the necessary contracts and agreements to effect that purpose, any law to the contrary notwithstanding.
That language "any law to the contrary notwithstanding” is not found in the bill before us.
Mr. PRESTON. I can not see that the striking out of that clause has changed its meaning in any way. I may be wrong about that, but I read the debates where the question was brought up between several of the Senators—I think you were one of them, Senator Walsh—and I can not see that the striking out of that clause has made any difference, one way or the other.
Senator Walsh of Montana. I do not think that feature of it has ever been subject to consideration by the committee.
Mr. PRESTON. Well, it is in the debates. I know Senator Sterling had a long colloquy with Senator Dillingham over it, and I think it was brought to your attention, too, by some other Senator on the floor. I do not know.
Senator WALSH of Montana. I agree fully with you that the omission of those words does not in any wise change the significance and purport of it.
Senator DILLINGHAM. You look upon this measure as exempting from the operation of the antitrust laws the classes mentioned in the bill?
Mr. PRESTON. As exempting them in a large measure but not fully. I think if they combined with outside corporations, or did a number of other things I could imagine, it would make them amenable to the law. But if they are organized in accord with this law, and do nothing more than "hold up the public, we will say, to
Ý use plain words, there is no remedy other than this section 2.
That brings to my mind, Senator, the former amendments proposed—that is, the Senate amendments—to the farm bill, and in view
of what I have just said about section 2, I do not think that an amendment that read like this
Nothing herein.contained shall be deemed to authorize the creation, or the attempt to create, a monopoly, or to exempt any association organized hereunder from any proceedings— and so forth, would reach a case where 100 per cent control was brought about by one man and an exorbitant price was exacted from the public for the article.
Senator Walsh of Montana. He would still be liable under section 2 of the Sherman Act, would he not?
Mr. PRESTON. That I can not say, because you have authorized him to combine, and he has combined. He has not done anything more.
Senator WALSH of Montana. Yes; but he has done something more. He has combined to such an extent that he has created a monopoly.
Mr. PRESTON. But I think you will find that some of the bar will not agree with that interpretation. Certainly my opponent here wil not so agree.
Senator WALSH of Montana. Let us see where the trouble comes in ? Mr. PRESTON. The trouble is this-no; you go ahead.
You were going to tell me what the trouble was. I think it would be much better.
Senator Walsh of Montana. We can all understand that associations may be effected; parties engaged in the same business may combine; rivals in trade in cities may throw their business together and become partners. They have now formed an association, but they may not constitute a monopoly. There may be a lot of others engaged in exactly the same business. Take the case you have before you. We can easily conceive that growers of raisins, which are grown only in a restricted area, by combining may create a monopoly. But take the wheat growers of the country. Wheat growers in a limited section of my State may throw in together and they may form an association; but they do not constitute a monopoly because they produce only a very infinitesimal portion of the entire
Mr. PRESTON. Yes; I understand that.
Senator Walsh of Montana. Now, when we say they may combine, but they must not do it to such an extent as to create a monopoly, is not that perfectly plain ?
Mr. PRESTON. All right; then take the case of the California Associated Raisin Co., for instance, or any other concern that has a large or predominating control of a crop, brought about for the purpose of controlling the market; and you are going to make an order. What kind of an order can you make ?
Senator WALSH of Montana. I am not speaking about the remedy, at all. I am not speaking about relief, here. I am speaking about the difference between an association which is merely a combination of various persons, not constituting a monopoly of a product, and another association which is so large and comprehensive in its character as to make a monopoly. Those two things are quite different in your mind, are they not? Mr. PRESTON. They are; but the contention seems to be among
f the bar and some of the courts that if by no coercion or any in!
any extraneous kind whatever all the growers of a
product come together for the purpose of organizing and getting all they can out of the interstate market, that is not a monopoly or an attempt to monopolize.
Senator Walsh of Montana. I do not undertake to say what is or is not a monopoly, but the distinction is perfectly clear in my mind between an association which does not amount to a monopoly and an association which does amount to a monopoly, and that is just what the Sherman Act contemplates. The first section of the Sherman Act contemplates associations or combinations which restrain trade, but do not amount to a monopoly.
Then section 2 of the Sherman Act goes after monopolies, whether they are organized by a single individual or by an association of individuals.
Mr. PRESTON. The members of the bar that I have talked with do not all agree with you, and a great many that I talked to say that section 2 means that the control must have been effected by the illegitimate means mentioned in section 1.
Senator WALSH of Montana. That is not tenable at all. It is perfectly certain in my mind that one man could make himself liable to the pains and penalties in section 2 of the Sherman Act. Take your raisin growers. If an individual man goes out and makes contracts by which he gets control of the entire product in this country so that he may exact any price he pleases of the producers, he is guilty under section 2 of the Sherman Act.
Mr. PRESTON. That is a question that we
Senator WALSH of Montana. Take the Patten corner in wheat. Here is a man that goes out and actually corners, or attempts to corner, all the wheat in the country. In cotton we have the same thing. That is what section 2 is intended to reach. Now, that is quite frequently, commonly, accomplished by a combination that would also fall under the condemnation of section 1.
Mr. PRESTON. Yes.
Mr. PRESTON. You are about the only lawyer I have found that agrees with me in that contention. Then, all right; we will assume that this clause was enacted, and assume that the statement you have just made is correct, which I heartily indorse, myself. How could you, by decree of court, remedy a monopoly when combination is authorized by this section 1? The only remedy possible would be the dissolution of the combination. Can you dissolve a combination when it is authorized ?
Senator Walsh of Montana. Your statement, then, is that when an association becomes a monopoly such as is contemplated in section 2, the remedy provided in section 2 is no remedy at all ? That is what you say?
Mr. Preston. Yes, that is really it; and if you put in an amendment preserving the law as to monopoly, and you got ready to enter a decree, and you were met face to face with the fact that you could not unscramble the combination, what relief could a court give?
Senator WALSH of Montana. But suppose that you do put in a provision to the effect that nothing hereunder contained shall be deemed to authorize the creation of a monopoly, and then an association such as this is organized, which actually is a monopoly.
Mr. PRESTON. What would be the decree of court?
Senator Walsh of Montana. There is no question about a decree, now, because now the thing is forbidden, or at least it is not authorized by this act. Would it not then fall under the condemnation of the Sherman Act?
Mr. PRESTON. I do not think so, because you would be remediless. That is what I mean. You could not say to A, "Get out of the combination."
Senator WALSH of Montana. But I am not speaking about the bill. Let me put it this way. Suppose we have this amendment suggested by the Senate in the last bill, “Nothing herein contained shall be deemed to authorize the creation of or attempt to create a monopoly.” Notwithstanding that, somebody does go on and organize an association which develops into a monoply, and that monopoly is prosecuted under the Sherman Act, under section 2 of that act, which forbids the creation of a monopoly, and penalizes it. Now, would this bill afford any protection to a man in that prosecution ?
Mr. PRESTON. You are thinking about a criminal case.
Senator WALSH. Well, all right; let us say that an action is brought for the dissolution of it under the Sherman Act on the ground that it is a monopoly condemned by section 2 of that act?
Mr. PRESTON. Yes.
Senator WALSH. Would this act afford any protection in the dissolution proceedings ?
Mr. PRESTON. It looks like, to me, it would.
Senator WALSH of Montana. But a combination that does not amount to a monopoly. That is all that is authorized; because this says that nothing in section 1 of this act shall be deemed to authorize the creation of a monopoly.
Senator DILLINGHAM. You are speaking of it as we proposed to amend it last year?
Senator WALSH of Montana. Yes. The witness apparently takes the position that the amendment proposed at the last session will not accomplish the end which the committee believed it would accomplish.
Senator DILLINGHAM. Yes, I see.
Senator WALSH of Montana. In this, that if a monopoly were created, and an action were brought to dissolve it under the Sherman Act, it could not be dissolved.
Mr. PRESTON. That is it. Senator Walsh of Montana. How do you reach that conclusion, Mr. Preston, when it says that nothing herein contained shall be deemed to authorize the creation of a monopoly?
Mr. PRESTON. But section 1 does authorize it, and section 2 tells you what the remedy is. Why section 2, then?
Senator Walsh of Montana. I agree with you. With the word "monopolizes” in section 2, it would be foolish to put this amendment on-if you left section 2 as it is. But you will bear in mind that
section 2 in the act before us last year said nothing about monopoly.
Mr. Preston. No; it talked about restraining trade, did it not?
Senator WALSH of Montana. About restraining trade or lessening competition in such article. That was all.
Mr. PRESTON. Yes; and I will tell you, Senator, the whole thing hangs around what the word “monopoly” means. It is a hazy condition, and this bill does not clear it up.
Senator Walsh of Montana. I agree with you that to put an amendment in this bill providing that nothing herein contained shall be deemed to authorize the creation of a monopoly would be perfectly absurd if we left section 2 as it is; but suppose we do not leave section 2 as it is! Suppose we make section 2 just as it was in the other bill, which read as follows:
That if the Secretary of Agriculture shall have reason to believe that any such association restrains trade or lessens competition to such an extent that the price of any agricultural product is unduly enhanced by reason thereof, he shall serve upon such association a complaint stating his charge in that respect, to which complaint shall be attached, or contained therein, a notice of hearing, specifying a day and place not less than 30 days after the service thereof, requiring the association to show cause why an order should not be made directing it to ease and desist from so restraining trade or lessening competition in such article.
That is all there is there.
Mr. PRESTON. What does that mean as now read by you? What does section 2 mean with reference to the power of the Federal administrator?
Senator WALSH of Montana. But we are getting away from the question.
Mr. PRESTON. All right.
Senator Walsh of Montana. I call your attention to the fact that there is nothing there about a monopoly.
Mr. PRESTON. It is restraining trade.
Senator Walsh of Montana. Yes; but trade may be restrained without the creation of a monopoly.
Mr. PRESTON. That is true.
Senator WALSH of Montana. There is no doubt in the world about that.
Mr. PRESTON. That is true.
Senator Walsh of Montana. This does not contemplate the creation of a monopoly.
Mr. PRESTON. That deals with only mild restraints that are short of monopoly.
Senator WALSH of Montana. That are short of monopoly. So that, if we amended section 2 of the bill before us so as to conform in that regard to section 2 of the old bill, then what inconsistency would there be in a declaration here that nothing in this act shall be deemed to authorize the creation or attempt to
create a monopoly? Mr. PRESTON. It seems to me still section 1 authorizes them to have an intent to monopolize and to have an organization to do it.
Senator WALSH of Montana. It authorizes the association; but we want to go on and to say “Your association must not proceed so far as to create a monopoly.” Then how can that be said?
Mr. PRESTON. If it is true that they can dissolve such an association, then you are absolutely correct.
Senator Walsh of Montana. If the monopoly is not authorized by this, it is subject to dissolution by the Sherman Act.