after the holder of one-tenth of the stock of each of the former subsidiary companies. To be sure, the decree prohibited the use of liquidating certificates or other evidences of joint ownership in two or more of the subsidiaries, as well as other formal devices for securing unity of control. The several companies, their officers, and directors were enjoined from agreeing together as to the conduct of business in such a way as to restrain trade. There was no prohibition, however, against the election of the same persons as directors or officers of two or more of the companies.

It is difficult to see why it should be anticipated that changes in the ownership of the stock thus distributed would take place, within any reasonable length of time, such as would destroy the substantial community of interest. John D. Rockefeller had owned about onefourth of the stock of the Standard Oil Company of New Jersey. A very small number of men had controlled a majority of the stock. These same men now control a majority of the stocks of the segregated companies. What possible motive have they for selling stocks in one of the companies rather than in another? Rather is it to be expected that they, and their heirs after them, will in general continue to hold all of these stocks, or, if they do dispose of any, will dispose of equal proportions in each of the companies. Changes are perhaps more likely to take place in the ownership of the smaller blocks of shares; but these have no influence in the control of corporations. So long as there is a community of ownership in the shares, formal agreement among the several corporations of the Standard Oil group regarding prices, output or other matters is by no means necessary to insure substantial harmony

in operation. No man naturally competes against

himself.

The situation with respect to the former constituent companies of the Northern Securities Company and the American Tobacco Company is the same as with respect to the Standard companies.

This method of dissolving trusts, by leaving the ownership of all the constituent parts to the same persons that owned the former controlling corporation, can hardly be characterized by any other word than farcical. It rests on the false assumption that a corporation has motives and ideas different from those of the persons who own it. The courts have repeatedly asserted that, in judging of the existence or the legality of a combination in restraint of trade, they must and will look beneath mere forms, and will consider the essence, the purpose of the men who conspire beneath the cloak of the corporation. In making the decrees of dissolution in these leading trust cases, however, the courts have dealt with form rather than with substance.

There would be no insuperable difficulty in adopting a more effective method of dissolving such closely-knit trusts. The stockholders of the controlling corporation could be required to apportion the securities or properties held by it among themselves in such a way that no one should have an interest in more than a single part. Such a method of dissolution might not immediately restore competition, but it would at least render competition possible and ultimately probable. Of course, the procedure suggested would not be altogether easy. There might be bickerings among the stockholders as to the relative values of the several constituent parts, particularly in view of the fact that such values after

the dissolution of the combination might bear a different relation to one another from those obtaining under the combination. If the court or the administrative authorities had to undertake the task of valuing the constituent properties for the purpose of such dissolution, much expert investigation would be required. But the thing is quite possible. It involves little more difficulty or more likelihood of injustice than is involved in the valuation of stocks and properties of constituent concerns at the time they enter a combination. The managers of the trust itself could be required to take the initiative in working out such a scheme of dissolution.

I do not propose to discuss the constitutionality of such a procedure. However, the increasing liberality of the courts in putting the public interest above the rights of property seems to hold a promise that they might uphold a provision of law requiring such a method of dissolution of monopolistic holding companies and prohibiting community of stock ownership where it tends to monopoly. If some injury resulted to investors it would be proper to remind them that when they entered into an unlawful combination, or bought its securities, they knowingly incurred the risk of loss through government intervention. Surely it would be strange if the law should avail to fine or imprison those who form a trust and yet be powerless to effect a real dissolution of such a combination.

In this connection it is worthy of note that the decree of the Court in the recent Union Pacific case did not authorize the distribution of the shares of the Southern Pacific Company held by the Union Pacific among the stockholders of the latter. The decree declared that such stock should be disposed of only with the approval

of the Court. As a matter of fact, a large block of the Southern Pacific stock was turned over to the Pennsylvania Railroad.

As may be inferred from the preceding discussion, I do not believe any important measure of competition exists today among the companies which formerly were controlled by the Northern Securities, oil, and tobacco combinations. It is not in human nature that it should exist under the conditions. Moreover, there is no outward evidence that competition has been restored as a result of the decrees in these three cases. It is true that a very active campaign of advertising has recently been conducted by the companies into which the tobacco trust was divided, but this does not necessarily mean competition among them. Even in the days of its strongest hold on the trade, the American Tobacco Company was a great advertiser, both for the purpose of maintaining the popularity of its brands as against outside competitors and for the purpose of stimulating consumption.

We must conclude, therefore, that, until we have tried more vigorous measures than have been thus far employed, despair as to the possibility of restoring competition among the constituents of a trust is unwarranted.

Difficult as it may be to break up trusts already formed and firmly knit together, there seems no serious difficulty in preventing by law the formation of new trusts. Indeed, it is noteworthy that since the government began somewhat actively to bring proceedings. under the Sherman anti-trust act, almost no trusts have been organized. If a proper control over the organization of corporations and over their acquisition of prop

erty and securities were exercised by the states and by the federal government, the attempt to organize new trusts could be nipped in the bud. Herein lies one of

the strongest justifications for the creation of the new federal trade commission.

It would appear from the preceding discussion that there is no serious difficulty in destroying and preventing by law the more formal pools and contracts in restraint of trade, or in preventing the formation of new trusts; nor even any insuperable difficulty in effectively breaking up trusts already organized. There remains the question whether, in the absence of formal combinations and contracts in restraint of trade, those of an informal character, which the law cannot reach, will persist and will possess the power seriously to injure the public. It is, of course, impossible to compel people to compete, in the sense of attempting, by the lowering of prices or otherwise, to get all the trade they can. The law cannot punish concerns each of which, without any written or oral agreement, takes merely the business which comes to it at the prices which it considers fair.

Those who believe it impossible to maintain competition in modern industry urge that the losses from unregulated competition are so severe that business men and investors will do everything possible to escape them. They point to the experience of the railroads. Railroad rate wars often reduced the competing lines to poverty or bankruptcy, and all but forced them into pools. The fierceness of railroad competition is due primarily to the fact that the transportation business is, at least up to a certain point in density of traffic, one