The Gisborne Times. PUBLISHED EVERY MORNING. MONDAY, SEPTEMBER, 7, 1908. TRUST METHODS IN THE UNITED STATES.

Gisborne Times, Volume XXVI, Issue 2289, 7 September 1908, Page 2

The Gisborne Times. PUBLISHED EVERY MORNING. MONDAY, SEPTEMBER, 7, 1908. TRUST METHODS IN THE UNITED STATES.

Wihen Mr. John D. Rockefeller was interrupted in liis game at golf to hear that the stupendous fino of 29,000,000 dollars had been imposed upon the Standard Oil Company, it is reported that the president of the great American trust was so little discomposed by the news that he merely smiled and then wont on with his' game. Subsequent events have justified the easy confidence of the financial magnate, for, as reported by cable a few weeks back, the deNot only has Judge Landis’ decision versed by the United States Circuit Court of Appeals. ' American files just to hand give some explanation of tho latest pliase of the position. Not only has Judeg Landis’ decision been revorsed; and tho case remanded for another trial but his methods are condemned as arbitrary and legally unsound. The Court declares that Judgo Landis’ plan of computing the number of offences charged against ■tho defendant was incorrect, but its most severe condemnation was aimed at his apparent -attempt to- punish tho Standard Oil Company of Now Jersey for the faults- of the Standard Oil Company of Indiana, which last was tile defendant at his bar. It will be remembered by those who followed tho trial that the total capitalisation of the Indiana corporation was very nmcli less than the amount of the fines .assessed. Judge Landis, before he fixed the assessment, summoned a number of witnesses —among them Mr v Rockefeller —to establish the relations existing between the Standard Oil Companies of New Jersey and Indiana, reaching tlio conclusion that the concerns were, identical and proportioning his fino upon the capitalisation and profits of the parent organisation. To that line of reasoning the tCourfc of Appeals is strongly opposed. “Can an American judge, without abuse of judicial discretion,” it asks, “condemn any one who has not has his day in Court? That to our mind is strange doctrine in Anglo-Saxon jurisprudence. No monarch, no parliament, no tribunal of Western Europe, for centuries, has pretended to have the right to punish except after due trial under all the forms of law. Can that rightfully he done here, on no other basis than the judge’s personal belief that tho party marked by him for punishment deserves punishment?” With the heavily capitalised New Jersey corporation relieved of responsibilty for the faults of the subsidiary company, Judge Landis’ 29,000,000 dollars fine, greatly exceeding the capitalisation of the corporation of •Indiana, would he revised and reduced as a matter of course, even though the conviction were sustained. But it appears that the defendant lias overthrown the conviction as well as the fine, so that , its victory is complete. The Federal prosecutor promises to insist upon a new trial of the

case ns early as possible, but, conducted along tho lines prescribed by tho superior Court, it threatens to bo tamo .and commonplace, lacking all of the sensational features that controd public attention in tho lormor hearings. Commenting on tho case a loading American contemporary says:—lt is probable that few of those who applauded Judge Landis when, ho assessed this gigantic penalty ovor believed that it would bo collected. It was tho spectacular effect that brought the applause, and Mr. Bockofollor’s grim prophecy that the Chicago jurist would be a long timo dead before the lino was paid was generally accepted as correct. Tho decision of tho Court of Appeals’ lias been to that extent discounted. But tho episode, after all, is highly instructive. Another avenue of escape has apparently boon opened to corporations whose practices conflict with tho laws. In order to evade serious punishment, they have only, it would appear, to work through subsidiary companies. Thus a corporation capitalised for millions and domiciled in New .Torsoy may organise a subsidiary concern, with capital merely sufficient to prevent suspicion, and transact its business through the lesser medium. In tho event of discovery of illegal practices, tho little company alone may be held responsible, whilo the parent combination goes free. The. fine must bo fitted to tlid’capital of tho defendant concern, so that there is small danger of heavy punishment and, if tho profits of the illegal transealions are sufficient to compensate for tho risks, there seems to bo no reason why they might not bo continued. The picturesque campaign of tho administration has practically onded in Federal discomfiture, and the .attempt to inflict adequate punishment -upon corporations by means of fines may ho admitted a failuro. 11l most cases tho fines assessed have boon ridiculously small. In tho case beforo Judge Landis they were ridiculously large. The Court seems unable to fix an average monetary punishment which will prove offcctive as a deterrent or an example. Tho euro for corporation lawlessness will have to ho sought elsewhere. Wo suspect that it will some day bo found either in the prescription of jail sentences for the officers of tho offending combinations, the adoption of tho Federal license system proposed by Mr. Bryan, or in both.