Today is the anniversary of a landmark decision of the U.S. Supreme Court which upheld the dissolution of the Standard Oil Company as an interference of interstate commerce. (Scandalous judicial intervention and activism at the time!)
My husband and I were just talking about oil monopolies and price fixing last week--but then who hasn't been lately? That reminds me...I better go fill up my tank before the prices go up again...
Here's the headline and front page story from the 5/15/1911 New York Times...
Standard Oil Company Must Dissolve in 6 Months; Only Unreasonable Restraint of Trade Forbidden
Washington, May 15 -- Final decision was returned late this afternoon by the Supreme Court of the United States in one of the two great trust cases which have been before it for so long -- that of the Standard Oil Company. The decree of the Circuit Court for the Eighth Circuit directing the dissolution of the Oil Trust was affirmed, with minor modifications in two particulars. So far as the judgment of the court is concerned the action was unanimous, but Justice Harlan dissented from the argument on which the judgment was based.
The two modifications of the decree of the Circuit Court are that the period for execution of the decree is extended from thirty days to six months, and the injunction against engaging in inter-State commerce on petroleum and its products pending the execution of the decree is vacated. This latter modification is made distinctly in consideration of the serious injury to the public which might result from the absolute cessation of that business for such a time.
Broadly speaking, the court determines against the Standard Oil Company on the ground that it is a combination in unreasonable restraint of inter-State commerce. For the first time since it has been construing the Sherman Anti-Trust act the scout takes that position, and thus definitely reads the word "unreasonable" into the law. It was on this ground that Justice Harlan, dissented. This decision, therefore, is a practical reversal of the position taken by the court in the trans-Missouri case, one of the first cases under the Sherman law.
In that case Justice White joined with the late Justice Brewer in a dissenting opinion, while Justice Harlan was with the majority of the court. That decision held, as Justice Harlan now holds regarding the Standard Oil Company, that the combination complained of was in restraint of inter-State commerce and therefore under the inhibition of the statute. Justices White and Brewer then held that the combination complained of was an "unreasonable" restraint of commerce, and so brought itself under the ban of the law.
Justice Harlan sharply criticized the majority of the court for taking this position. He declared it to be a menace to the institutions of the country. He said it was amending the Constitution by judicial interpretation, and was unjustified. And he asserted that one of the greatest dangers to the country was the willingness of the courts to take such action.
How Decision Was Received
The decision was received with varying emotion by the crowd in the little court room. Attorney General Wickerham hailed it as a victory for the Administration. Frank B. Kellogg, the Assistant "Trust Buster," who has had the chief management of the case from the Government from its inception, was of similar opinion. Progressive Senators like La Follette openly expressed distrust of the effect of the decision, and Senator Kenyon, who only a few weeks ago left the Department of Justice to enter the upper house of Congress, spoke of it as a "dangerous decision."
While in the Department of Justice, Mr. Kenyon was in charge of the prosecution of the Beef Trust, the members of which will be indicted individually on the criminal count. The department hopes to bring these cases to trial in the near future.
Trust lawyers who were in court did not display any willingness to comment on the decision. But among the lawyers who heard the Chief Justice deliver his epitome of the opinion, which he did without referring to the printed text of the decision, and who were not connected with this case, the opinion prevailed that the decision was distinctly favorable to "big business." For a long time there has been open expression of the hope on the part of "big business" that when the decision in the oil and tobacco cases did finally come down, they would at least point a way under which the big corporations could continue to do business, and that the present general method would not be [text unreadable.]
President Taft himself, in messages to Congress and in public speeches, has declared himself earnestly in favor of retaining the economy and efficiency of combination and of destroying merely those practices which unduly restrained inter-State commerce and stifled competition. There was a time when the President was in favor of some amendment to the Sherman law in the effort to reach this situation. But he finally came to the conclusion that it was impracticable to write the word "unreasonable" into the law, and pointed out that more and more the Supreme Court was tending toward the point where its decisions in trust cases would be based on that construction of the statute.