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“The rule that equity will not enjoin a crime has here no application. The authorities where the rule is thus stated are cases where the injury about to be caused was to the public alone, and where the only proper remedy, therefore, was by criminal proceedings. When an irreparable and continuing unlawful injury is threatened to private property and business rights, equity will generally enjoin on behalf of the person whose rights are to be invaded, even though an indictment on behalf of the public will also lie.”
Another highly important case is that of the United States vs. Workingmen's Amalgamated Council of New Orleans, 54 Fed. Rep., 994, in which, upon an application for injunction, Judge Billings held that a combination of men belonging to a trades union with a view to prevent by violence and intimidation the employment of non-union men in the transportation of goods between the states and between the states and foreign nations was a violation of the Interstate Commerce Law.
I trust that I may be pardoned for expressing the opinion, confessedly of no great value, that these are among the most important decisions that have been rendered for many years. It opens a new perspective of practical utility to be attained through the preventive process of courts of equity.
The usefulness of trades unions of laborers in cases of arbitration is obvious; for without some such organization arbitration would be impossible. Their utility was shown in the first case just mentioned in the same way; for an injunction against the chief officer of the Brotherhood operated through him at once upon all of its members, as they held themselves subject to his orders.
But let it not be supposed that such unions are altogether beneficial. Far from it. Their rules limiting the number of apprentices cannot be justified. Every man ought to be allowed freely to choose his calling in life. The right to labor is the first of all rights, and it ought not to be limited by artificial restraints. Besides, the result is to exclude from various callings men who are the most qualified to excel in them. Moreover, the efforts of the union men to exclude non-union men from employment leads to the grossest injustice and oppression. What the unions seek to attain is a monopoly of labor.
Most of our state constitutions contain the declaration that “perpetuities and monopolies are contrary to the genius of a republic, and shall not be allowed." This is but the expression of the ascertained fact that competition is the life of trade. If you remove or suppress that competition by any artificial means, monopoly at once ensues. Many years ago, before the extension of transportation by railways, the several merchants of a village, when weary of competition, would agree to mark up all their goods on a certain day a certain per cent, thus creating a monopoly.
So it was common a few years ago for competing railroads to pool their earnings. After that they could charge what they pleased without detriment to either, and neither had any particular inducement to furnish good service. At present, the monopoly of the village merchants can no longer be imposed; for goods are now advertised with prices annexed by large dealers in all our cities, and are sent on demand to all parts of the country by mail and by express; and the pooling of earnings by railway companies is forbidden by the Interstate Commerce Act.
The plan adopted by merchants in small villages could rarely or never be successfully carried out in large places, for if a concurrence of all the merchants in the agreement could first be obtained, some would be found that would violate it, in which case it would be necessarily abandoned by common consent.
I have spoken only of the unions of skilled workmen. As for the unskilled, though, like the farmers, they sometimes attempt to form and keep up such unions, yet all such efforts are fruitless, because they are too numerous and too scattered, and because their necessities often prevent them from withholding their products from the market until the advent of better times. Like lawyers, doctors and professional classes generally, they are debarred from increasing their wages by combination.
The local and somewhat primitive monopolies mentioned have been succeeded by others far more portentous. In 1869, the Standard Oil Trust, the first of the kind, was organized. It was a combination among the refiners of crude petroleum in Pennsylvania and Ohio. This scheme was attended with such astonishing pecuniary success that it was in the course of a few years applied to almost every kind of industry. The proprietors of various mills said to each other: “We are now spending large sums of money in the race for business, in advertising, in sending out drummers, and so on. If we will only pool our property, and put it under one control, we shall save all this expense; we can also dismiss many agents and employes, as one superintendent or cashier will do all the work that is now done by twenty; and we can charge what we please for our products, for we shall then have no competition. In short, let us quit trying to cut each other's throats, and let us begin to fight the public.” This reasoning resulted in a trust, and with the results of trusts we are familiar.
As soon as the trust is formed the price of the goods is marked up, and as every increase in price means a decrease in consumption, the production of goods is not so great as it was. Therefore certain mills are closed, or are run on shorter time, and workmen are told that their services are no longer needed. The profits derived from this proceeding are phenomenal. Thus on the waste."
establishment of the Standard Oil Trust, though the rail. ways were carrying the products of this monopoly nominally at the same rates imposed on other refiners, they paid the Standard Oil Trust $10,000,000 in eighteen months in rebates that were agreed on. The result was that "its competitors were ruined, and idle factories, old pipe lines no longer used, and business wrecks throughout the country give evidence of enormous economic
The most marvelous thing was that by its agreement with the railways the trust not only secured and received a rebate on its own shipments, but also on
a all shipments of oil made by other producers. A few years ago the Cotton Seed Oil Trust by a single stroke of the pen reduced the price of cotton seed from $7 to $4 a ton, thus realizing two million dollars per annum on that item alone; the loss being sustained by the planters who raised the seed.2
It would be of but little use to put down competition unless it could be kept down. To accomplish this result, the trusts resort to measures analogous to those used by laborers to keep down the number of apprentices. If a number of men, say in the south or west, conclude to begin the manufacture of some article of necessary consumption, it will not be long before they receive a letter reading somewhat as follows:
“We notice with regret that you purpose to start a factory in your place for the purpose of making the commodities which we are now producing in a manner acceptable to dealers. You are no doubt aware of the fact that for many years we have supplied your market with articles of that kind. This we have done at the lowest possible cost of production. Our duty to our cus
? Richard T. Ely, Harper's Magazine, August, 1886. Handley vs. Cleveland R. R. Co., 31 Fed. Rep., 689. Cook on "The Corporation Problem," 37.
2 “Monopolies and the People," by Charles Whiting Baker, 79.
tomers as well as to ourselves forbids that we shall sit idly by and let our trade be taken out of our hands. We therefore think it proper to advise you that if you persist in your purpose we shall sell the articles that we manufacture in your town and country for much less than you can make them for. Hoping that you will receive this communication in the same friendly spirit by which it is dictated, we remain, etc.”
This letter is signed by some well known manufacturing firm, and means what it says. On inquiry the promoters find that while they can start their factory with a capital of $100,000, it will take a million more to fight the battle with monopoly; therefore they usually desist. Occasionally a very rich man like Claus Spreckles may start an opposition sugar refinery; but in that case there is no guaranty that if he comes out safely from the conflict with an established trust, it will not very soon disappear in the capacious bosom of that trust, with a participation in the extra twenty-five per cent that the trust levies on the consumer.
It has sometimes been said that the effect of the trusts is to bring down prices, owing to the greater cheapness with which goods can be manufactured on a large scale, and that the proof of this lies in the fact that refined oil is now sold for less than it was before the Standard Oil Trust was formed. In this statement there is no truth whatever. It would be strange if these trusts should forego the very objects for which they were created. The truth is that the price of oil has gone down because the Standard Oil Trust was never able to corner the entire production, and has therefore always been subject to the law of competition; and because of the extraordinary development of the oil industry in Russia, which has reduced prices the world over.
But the evil does not stop here. Lord Coke pointed out an evil effect arising out of monopolies from the fact