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Ch. 3] INDUSTRIAL COMBINATIONS 671
A second reason for the almost total cessation of industrial
promotions was the changed attitude of the law.'' Although
the Sherman Act was passed in 1890, it was not until early in
1895 that an important case under this act was reviewed by the
United States Supreme Court.® The decision of the highest
court indicated dearly that industrial consolidations were to
be considered legal. The court let them pass, by a verbal subterfuge,
notwithstanding the spirit of the act. But in 1899 the
Supreme Court reversed itself.^" Consolidations were not to
be legalized by a mere verbal subterfuge. The act of 1890
did apply to the combinations of manufacturing plants and
could, moreover, be invoked to dismember those which had
been illegally formed. Biit this idea did not vividly and thoroughly
permeate the intelligence of the banking world until the
great Northern Securities decision in 1903,^^ when the teeth
of the act of 1890 were felt. This decision was widely advertised
and the country as a whole realized that the act of 1890
was not dead legal verbiage, but meant exactly what it said
—namely, that consolidations of competing enterprises were
illegal.
A third reason that explains the decline of industrial promotions
after 1903 was the shift of investment sentiment.
This reason was perhaps less important than the others, but
it was, nevertheless, very vital in the point of view of the
banker without whom no industrial consolidation could be
d It was stated by a distinguished English student of the law of combinations,
regarding the evolution of the law on this subject, that, "As to
the stages through which the English law relative to combinations has
passed, one observation, on the whole, holds good. In developing the law
as to combinations, the courts have been mainly, though not avowedly,
guided by the economic theories prevalent from time to time—perhaps, to be
more accurate, by the political economy of a past age, for it will be found
that the courts are rarely abreast of the latest economic teaching."' This
observation, made with reference to the whole history of the English law of
restraint of trade and combination, is directly pertinent to the relatively short
and limited period during which our courts have been interpreting the
Sherman Act of i8go.
^ Sir John Macdonell, Ministry of Reconstruction, Report of the Committee on
Trusts.
»U. S. V. E. C. Knisht Co., 156 U. S. i. Decided January 21, 1895
i^Addyston Pipe & Steel Co. v. U. S. 175 U- S. 211. Decided December 4, 1899.
" Northern Securities Co. v. U. S., 193 U. S. 197. Decided March 14, 1904.
Beschrijving voorwerp
| Titel | The financial policy of corporations |
| Auteur | Dewing, Arthur Stone |
| Jaartal | 1926 |
| Collectienaam | NIVRA Historisch Archief, UBVU gedigitaliseerd |
| PPN | 344552586 |
| Toegangsgegevens (URL) | http://imagebase.ubvu.vu.nl/getobj.php?ppn=344552586 |
| Signatuur origineel | NIVRAHA149 |
| Evaluatie |
Beschrijving
| Titel | NIVRAHA149_00695 |
| Transcript | Ch. 3] INDUSTRIAL COMBINATIONS 671 A second reason for the almost total cessation of industrial promotions was the changed attitude of the law.'' Although the Sherman Act was passed in 1890, it was not until early in 1895 that an important case under this act was reviewed by the United States Supreme Court.® The decision of the highest court indicated dearly that industrial consolidations were to be considered legal. The court let them pass, by a verbal subterfuge, notwithstanding the spirit of the act. But in 1899 the Supreme Court reversed itself.^" Consolidations were not to be legalized by a mere verbal subterfuge. The act of 1890 did apply to the combinations of manufacturing plants and could, moreover, be invoked to dismember those which had been illegally formed. Biit this idea did not vividly and thoroughly permeate the intelligence of the banking world until the great Northern Securities decision in 1903,^^ when the teeth of the act of 1890 were felt. This decision was widely advertised and the country as a whole realized that the act of 1890 was not dead legal verbiage, but meant exactly what it said —namely, that consolidations of competing enterprises were illegal. A third reason that explains the decline of industrial promotions after 1903 was the shift of investment sentiment. This reason was perhaps less important than the others, but it was, nevertheless, very vital in the point of view of the banker without whom no industrial consolidation could be d It was stated by a distinguished English student of the law of combinations, regarding the evolution of the law on this subject, that, "As to the stages through which the English law relative to combinations has passed, one observation, on the whole, holds good. In developing the law as to combinations, the courts have been mainly, though not avowedly, guided by the economic theories prevalent from time to time—perhaps, to be more accurate, by the political economy of a past age, for it will be found that the courts are rarely abreast of the latest economic teaching."' This observation, made with reference to the whole history of the English law of restraint of trade and combination, is directly pertinent to the relatively short and limited period during which our courts have been interpreting the Sherman Act of i8go. ^ Sir John Macdonell, Ministry of Reconstruction, Report of the Committee on Trusts. »U. S. V. E. C. Knisht Co., 156 U. S. i. Decided January 21, 1895 i^Addyston Pipe & Steel Co. v. U. S. 175 U- S. 211. Decided December 4, 1899. " Northern Securities Co. v. U. S., 193 U. S. 197. Decided March 14, 1904. |
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