BUSINESS AND ITS REGULATION - THE ATTEMPT TO PRESERVE COMPETITION: THE ANTITRUST LAWS by Wendell Berge There is a strong tradition in this country against monopoly. This tradition has been expressed in the Sherman Antitrust Act and numerous other Federal laws, as well as in State legislation. We repeatedly assert our faith in free enterprise. We believe in economic opportunity. We are against regimentation of business. We want businessmen left as free as possible to take risks, decide their business policies, and then to succeed in their ventures or fail according to their abilities and the whims of fortune.
This is the American philosophy. And yet despite the generality of its acceptance, it has not prevented monopoly from gaining ground. Indeed, concentration of economic control in a sense that a few companies together control the major output of an industry is today the standard pattern of American business.
I shall not burden you with statistics on this point. You are familiar with the many studies of economic concentration which have been made in recent years. The accumulated evidence in antitrust investigations, in the volumes of data which have been compiled . . . by the Temporary National Economic Committee, and by other Congressional Committees, reveals the vast extent of monopoly control in many of our largest industries—the metallurgical industry, the chemical industry, the electronics and electrical equipment field, the production of pharmaceuticals, the manufacture of precision instruments and machines, the distribution of foodstuffs and tobacco, the petroleum industry, and even investment banking with its vast control over money and credit. This is just a sampling of the industries where monopoly controls are dominant, and it by no means exhausts the list.
The war undoubtedly accelerated this trend toward concentration. More than two-thirds of all war contracts went to 100 companies. And the larger companies have shared well in the disposal of surplus plants and property. Since the war numerous corporate mergers have taken place which further emphasize the trend toward concentration and monopoly.
Nearly every political platform of both major parties since the passage of the Sherman Act has demanded its vigorous enforcement. Presi
dential candidates have almost invariably promised to outdo their rivals in enforcing the law. Even President McKinley, who is generally thought of as one of our more conservative presidents, was vigorous in his vocal denunciation of monopolies. And, of course, the crusades of Theodore Roosevelt and Woodrow Wilson are part of our recent well-known history. But notwithstanding this ideological devotion to free enterprise, and our instinctive abhorrence of monopoly, we have done very little in a practical way toward effective antitrust enforcement.
Lack of vigorous enforcement accounts for the Sherman Act's ineffectiveness to stem the rising tide of monopoly control. During a large part of the Act's history, enforcement was little more than a token. Only a small staff was possible under the paltry appropriation. Few cases were instituted and no attempt was made to apply the law on a broad front; to make it really significant as an instrument of economic policy.
We hear a great deal about the trustbusting policies of President Theodore Roosevelt. But even when you survey his seven-year administration you find that relatively few suits were instituted. The fame which he attained as a trustbuster rests largely on several cases—the Northern Securities case, the Packers case, the Standard Oil case and the Tobacco case. I do not mean to underestimate the importance of those cases. They were important as landmarks in the judicial interpretation of the law and they were moderately successful, at least temporarily, in attaining economic results within the industries with which they were concerned. But when you consider that these cases were instituted over a seven-year period and that during this very period many of the industrial giants of the future were being formed in other industries which the Department of Justice of that day did not challenge, you cannot reach any other conclusion than that the Sherman Act was not being enforced on a broad front. And how could it have been? In the Theodore Roosevelt administration the average number of lawyers in active service on antitrust mattern was five. Five lawyers cannot do very much in policing against the monopoly practices of the whole industry of America.