THE GLUCOSE TRUST

The decision of the District Court dissolving the Corn Products Refining Company has been described elsewhere.1 The decree of the court, entered on November 13, 1916, ordered the unlawful combination to be forever dissolved. Following the precedent in the harvester case, the business of the company was to be divided "in such manner and into such parts of separate and distinct ownership" as might be necessary to restore competitive conditions. Finally, injunctions were issued against the use of a considerable number of unfair practices enumerated in the decree. The company appealed from the decree within the four months allowed to it, but subsequently, on March 31, 1919, withdrew its appeal, and accepted the terms proposed by the Department of Justice. The company took this action that it might be relieved of uncertainty, and might proceed, undisturbed by the fear of government prosecution, to make such improvements as would insure the future of its business.3

The settlement with the Department of Justice and the final decree of the district court-entered March 21, 1919-provided that the company before 1921 should sell its reserve plant at Davenport, Iowa, which had not been in operation for a number of years; its plant at Granite City, Illinois; and its securities in the National Starch Company and the Novelty Candy Company. It further provided that these properties or securities should not be sold to a corporation or person controlled by or affiliated with the Refining Company, nor to any defendant in the suit; and that none of the directors, officers, or stockholders of the company should acquire a substantial interest in the corporation that purchased them. Moreover, the Corn Products Company and the purchaser might not have any directors or officers in common. If at the end of three years these measures

1 See p. 436.

2 A copy of the decree is in Judgments and Decrees in Federal Anti-Trust Cases, pp. 440-448.

3 Letter of the president to the stockholders, April 25, 1919. Reprinted in Chron., 108, p. 1723.

4 See Chron., 108, p. 1392.

proved inadequate, the government was to be permitted to have further relief.

The result of the decree was to leave the Corn Products Refining Company only three manufacturing plants, located at Argo and Pekin, Illinois, and Edgewater, New Jersey. The output of the Edgewater plant was largely marketed abroad, and the company had strongly protested against being forced to dispose of it. Its retention by the company leaves it in a position to compete effectively for the export trade.

THE MEAT COMBINATION

The leading meat-packers, united through pools or agreements of one kind or another during the past thirty years or more, have been attacked in numerous proceedings.1 In 1902 the government filed a petition in equity against the leading packers, alleging a conspiracy to suppress competition and to obtain a monopoly in commerce in meats.2 The Circuit Court granted a perpetual injunction in 1903, which was affirmed by the Supreme Court, with slight modification, in January, 1905.3 The government maintained that the defendants continued to conduct their business in the manner forbidden by the injunction; and in July, 1905, an indictment was returned against practically the same defendants. The packers claimed that they were entitled to immunity from criminal prosecution because they had virtually been compelled to testify against themselves in connection with the investigation of the Bureau of Corporations into the beef industry; and they were sustained in this contention by the Court in a decision rendered in 1906.4 This decision, which became known as the "immunity bath" decision, led to

1 The nature of these pools and agreements, and the position of the leading packers in the industry, are described in the report of the Federal Trade Commission on the Meat-Packing Industry. The first three volumes of this report are summarized by the author in the American Economic Review, 9, pp. 880-885. See also the report of the Bureau of Corporations on the Beef Industry, March 3, 1905.

congressional legislation whereby immunity from criminal prosecution was limited to natural persons giving testimony or evidence under oath in obedience to a subpoena.

In 1910 four new proceedings were instituted.1 In March two suits-one civil and the other criminal-were brought against the National Packing Company, a concern organized in 1903 to hold certain independent properties that had been acquired by the Swift, Armour, and Morris companies in the interests of a merger that had been planned, but that failed to go through. The directors of the National Packing Company were all representatives of the three leading packers, and the company was used, it was alleged, as an agency for the harmonious determination of general policies and for the control of the trade. In April, 1910, a criminal action was brought against the Armour Packing Company; and in September one against Louis F. Swift and others. The civil suit against the National Packing Company was withdrawn to prevent the defendants from asking the Court for a postponement of the criminal proceedings until the settlement of the civil case; and all of the criminal suits were lost by the government. In 1912, possibly to avoid a new civil suit, the packers dissolved the National Packing Company, and distributed its assets among its owners, that is, among the Swift, Armour, and Morris interests.

Notwithstanding the claim of the Department of Justice that the dissolution of the National Packing Company accomplished a substantial restoration of competitive conditions,2 the outcome of this large number of suits and the facts brought to light in later investigations, notably those of the Federal Trade Commission, made it clear that the activity of the government had availed comparatively little.

Much bids fair to be accomplished, however, by a recent court decree materially affecting the business of the leading packers known as the Big Five (Swift and Company, Armour and Company, Morris and Company, Wilson and Company, and Cudahy Packing Company). Influenced no doubt by the

1 The Federal Antitrust Laws, July 1, 1916, pp. 62, 64. 2 Annual Report of the Attorney General, 1912, p. 16.

prospect of regulative legislation directed particularly at the meat-packing industry, and by the imminence of a dissolution suit under the Sherman Act, the Big Five consented-so the Attorney General announced on December 18, 1919-to a decree that enjoined the practices of which the government had particularly complained.1

The decree of the Court was entered on February 27, 1920.2 Legal verbiage omitted, it provided as follows:

(1) The corporate defendants were perpetually enjoined from maintaining in any manner any contract or combination in restraint of interstate commerce, and from monopolizing any part of such commerce (sec. 1).

(2) The defendants (individual and corporate) were perpetually enjoined from owning, directly or indirectly, any capital stock or other interest in any public stockyard market company in the United States, or in any stockyard terminal railroad in the United States, or in any stockyard market newspaper or journal published in the United States (sec. 2). The defendants within ninety days after the entry of the decree were to file with the Court, for its approval, their plan for divesting themselves of all ownership or interest in these facilities, whereupon the Court, if it approved the plan, was to determine the date by which it should be carried out (sec. 10). The purchasers of the defendants' interests in stockyards were to agree with such of the defendants as then maintained packing plants in these stockyards that for a period of ten years the former should continue to operate the stockyards efficiently, and the latter should continue to operate the packing plants, unless strikes or other causes beyond their control should prevent (sec. 13).

(3) The corporate defendants were perpetually enjoined from using their distributive system and facilities, including their

1 These practices are briefly described in the petition for the United States in United States v. Swift and Company et al. (no. 37623); and in detail in the report of the Federal Trade Commission on the Meat-Packing Industry (see particularly the summary in part I, pp. 28–78).

2 A copy is in Decrees and Consents, Petition, Answers, and Stipulation in United States v. Swift and Company (no. 37623), a pamphlet published by the Department of Justice.

branch houses, route cars, and auto trucks, in the handling of a large number of articles enumerated in section four, except in so far as permitted in that section, and except refrigerator cars when in good faith leased to common carriers. The defendants might dispose of any part of their distributive system with the approval of the Court (sec. 3).

(4) The corporate defendants were perpetually enjoined from carrying on in the United States, directly or indirectly, either for domestic trade or export trade, the manufacturing, jobbing, selling, transporting (except as common carriers), distributing, or otherwise dealing in a large number of commodities, including, among others, fish, vegetables, fruits, confectionery, soft drinks, preserves of all kinds, spices and relishes, coffee, tea, chocolate, cocoa, nuts, flour, sugar, rice, bread and crackers, cereals, grain, grape juice, and miscellaneous articles. Provided, however, that these commodities might be dealt in by the defendants when used (a) as supplies in operating their packing plants, branch houses, and other facilities; (b) in the construction and physical maintenance of their packing houses and other facilities; (c) in the operation of their restaurants, laundries, or other conveniences; or (d) in combination with meat (sec. 4). The requirements of this section were to be met at as early a date as possible, but in no event to be delayed beyond two years from the entry of the decree. The approval of the Court to the final disposition was required, and the Attorney General at any time within the two year period might apply to the Court for an order compelling the defendants to make a report of progress (sec. 12).

(5) The individual defendants were perpetually enjoined from owning, either directly or indirectly, voting stock which in the aggregate amounted to 50 per cent or more of the voting stock of any corporation (except common carriers), or from holding a half interest or more in any firm, which was carrying on in the United States the business of manufacturing, jobbing, selling, transporting, or distributing a large number of commodities, including all those enumerated in the preceding section except cereals, grain, grape juice, and miscellaneous articles