the Sherman Anti-trust Act with decided vigor. During the seven and one-half years of his administration there were brought eighteen bills in equity, twenty-five indictments, and one forfeiture proceeding.1 Among the trusts attacked were the oil trust (the Standard Oil Company), the tobacco trust (the American Tobacco Company), and the powder trust (the du Pont de Nemours and Company). Lesser combinations attacked included those in the meat-packing, salt, paper, licorice, elevator, naval stores, and furniture industries. Moreover, a number of important railroad combinations were proceeded against. These included the Northern Securities Company, the St. Louis Terminal Railroad Association, the Reading Company, the Union Pacific Railroad Company, and the New Haven Railroad Company. Furthermore, legislation was enacted to create a Bureau of Corporations; to expedite cases arising under the anti-trust act; and to supply the Department of Justice with ample funds to prosecute unlawful combinations.

The record of the Roosevelt administration in turn was far eclipsed by that of the Taft administration. During the seven and one-half years of Roosevelt's presidency forty-four proceedings all told had been instituted, while during the four years that Taft was President there were brought forty-six bills in equity, forty-three indictments, and one contempt proceeding,a total of ninety, or more than twice as many proceedings in about half as long a period.2 Moreover, the suits filed by Attorney General Wickersham (President Taft's Attorney General) included a number of very important trusts and combinations not disturbed by the preceding administration. Among them were the following: the United States Steel Corporation, the American Sugar Refining Company, the United Shoe Machinery Company, the International Harvester Company, the National Cash Register Company, the Keystone Watch Case Company, the Corn Products Refining Company, the Standard Sanitary Manufacturing Company, the American Thread Company, the General Electric Company, and the American Coal Products Company. 1 The Federal Antitrust Laws, July 1, 1916, pp. 50-61.

2 Ibid.,

pp. 61-81.

During President Wilson's first term thirteen bills in equity and twenty-one indictments were filed, a total of thirty-four as compared with ninety during the four years of his predecessor.1 Furthermore, far-reaching amendments to the Sherman Act were enacted. During the period down to September 8, 1920, twenty-two additional bills and twenty-four additional indictments were brought. Among the combinations proceeded against were: the Eastman Kodak Company, the Quaker Oats Company, the American Can Company, the Lehigh Valley Railroad, and (for the second time) the Reading Company and the New Haven Railroad. The list is not imposing, yet by the beginning of President Wilson's administration the principal trusts and combinations had already been proceeded against. The individual dissolution proceedings may next be described.

THE OIL TRUST

The first trust to be formally dissolved under the Sherman Act was the Standard Oil Company.2 The history of the suit against this company and the decrees of the Circuit and Supreme Courts have already been outlined. The reader will recall that the decree of the Circuit Court-which was approved in the main by the Supreme Court-forbade the Standard Oil Company of New Jersey, and its officers and directors, to vote the stock of its subsidiary companies; to exercise any control over their operations; to continue the unlawful combination; or to enter into any like combination to restrain commerce. But the Court specifically said that the Standard Oil Company of New Jersey was not prohibited by the decree from distributing ratably to its shareholders the shares of stock in the subsidiary companies parties to the combination to which they (the share

1 See Annual Reports of the Attorney General.

2 A paper combination was dissolved by judicial order on May 11, 1906, but this combination, brought about by making the General Paper Company the sales agent for some twenty-three paper concerns, was essentially a pool. (See Report of the Senate Committee on Control of Corporations, 1913, p. 945.) A combination of elevator companies, including the Otis Elevator Company, was dissolved by a decree entered June 1, 1906, but this was a consent decree. (See ibid., p. 946.)

holders) were equitably entitled. This suggestion was seized upon by the defendants, and made the basis of their plan of dissolution. In a circular dated July 28, 1911, the Standard Oil Company of New Jersey (the parent company) announced that it would distribute to its stockholders (as of September 1, 1911) the stock of thirty-two American subsidiaries and of one foreign subsidiary; and this distribution was made on December 1.1 By this distribution each owner of one share of stock in the Standard Oil Company of New Jersey received securities (generally fractional shares) of an aggregate face value of approxiimately $178; 2 and in addition retained, of course, his stock in the parent company, which continued as a producing concern, operating its large refineries at Bayonne, New Jersey; Baltimore, Maryland; and Parkersburg, West Virginia.

The decree contained no express prohibition of common officers or directors among the New Jersey corporation and its former subsidiaries (none of which was dissolved), but at meetings of the Standard Oil Company of New Jersey and the Standard Oil Company of New York on December 4 some important changes in organization were made. Mr. John D. Rockfeller resigned as president and director of the Standard Oil Company of New Jersey. Mr. William Rockefeller, president of the Standard Oil Company of New York, vice president of the Standard Oil Company of New Jersey, and a director in both companies, resigned from all these positions. Mr. John D. Archbold, vice president of the Standard Oil Company of New Jersey, was elevated to the presidency; but resigned as vice president and director of the Standard Oil Company of New York. Mr. H. C. Folger, Jr., vice president of the New York concern, was made president; but he handed in his resignation as secretary and director of the New Jersey company. Mr. A. C. Bedford, a director of the New York concern, resigned to become vice president and treasurer of the New Jersey concern.

1 The stock of the foreign subsidiary was not distributed until a later date. 2 The value of the shares of the subsidiaries was computed by the Commercial and Financial Chronicle, and the results presented in the form of a table. See vol. 93, p. 1390 (November 18, 1911).

(Upon the death of Mr. Archbold some years later Mr. Bedford became president.) Similar shifts affecting other positions were made at the same time.

What has been the effect of the dissolution decree? Fortunately the Federal Trade Commission, which was empowered by the Trade Commission Act to investigate the manner in which the dissolution decrees of the courts have been carried out, has made a full investigation of this matter so far as gasoline is concerned. Its findings of fact and its conclusions are contained in its Report on the Price of Gasoline in 1915.

The conclusion of the Commission was that in spite of the dissolution decree there was little, if any, competition among the former subsidiaries of the Standard Oil Company of New Jersey in the marketing of gasoline, now the chief refined product of crude oil. The subsidiaries which were engaged in marketing gasoline were the Standard Oil companies of New York, New Jersey, Kentucky, Ohio, Indiana, Nebraska, California, and Louisiana, the Atlantic Refining Company, the Continental Oil Company, and the Magnolia Petroleum Company. The Commission pointed out that these eleven Standard companies have with respect to gasoline "maintained a complete division of territory embracing the whole country and that almost without exception each Standard marketing company occupies and supplies a distinct and arbitrarily bounded territory." Thus, the Standard Oil Company of New York occupied the whole of New York state and the New England states, but no other territory; the Atlantic Refining Company occupied all of Pennsylvania and Delaware, but no part of any other state; and the Standard Oil Company of New Jersey served New Jersey, Maryland, Virginia, West Virginia, North Carolina, and South Carolina. The only exceptions to this division of territory without any overlapping were found in Oklahoma and Arkansas. In

2

1 Report of the Federal Trade Commission on Price of Gasoline in 1915, pp. 7, 113.

2 Ibid., p. 6..

3 The details are shown in a map opposite page 22 of the Report of the Commission.

Oklahoma-the territory of the Magnolia Petroleum Company -the Standard Oil Company of Indiana had a few tank wagon stations in the northern part of the state; and in Arkansas both the Magnolia Petroleum Company and the Standard Oil Company of Louisiana had stations. None of the "independent" concerns, it should be observed, had marketing territories limited in this fashion. The Texas Company, for example, sold gasoline in 32 states and the District of Columbia, and covered ten of the eleven Standard marketing territories. The Gulf Refining Company, the Indian Refining Company, the National Refining Company, the Pure Oil Company, and the Cudahy Refining Company all did business in at least two of the Standard marketing territories, and were able to make profits in competition with each other and with the Standard companies.

Moreover, the boundaries of the Standard territories were arbitrary. Almost without exception they conformed to state lines. And of course it is clear that state lines, being political boundaries, do not represent the most economical boundaries from the standpoint of distribution. Thus, the Standard Oil Company of Ohio, with a refinery in the northern part of the state, supplied the southern part of the state, in spite of the fact that the Standard Oil Company of New Jersey had a refinery at Parkersburg, West Virginia, just across the border. This division of territory, obviously uneconomical, would appear to have been adopted for the reason that such a division offered no opportunity for encroachment, thus avoiding disputes.

Further evidence of the absence of competition between the eleven Standard marketing companies was given by the marked unequalities in the price of gasoline in one territory as compared with another. The report gives numerous illustrations of these inequalities, but it suffices to say that they cannot be explained on the ground of differences in the cost of refining or of distribution. Had competition been effective these inequalities clearly could not have persisted. The Standard companies in low price territories would have made sales in the high price territories, and as a result there would have been eliminated all differences in price except such as were the result of differences in cost. It