"Good" Combination

In the opinion of the Chief Justice of the U. S. the bituminous coal industry is in "distress," riddled with injurious practices, in a thoroughly "deplorable" state. Because the Chief Justice is right, James D. Francis, coal operator of Huntington, W. Va., acting under a plan launched by the National Coal Association year and a half ago to place all sales in the hands of regional agencies, set up Appalachian Coals, Inc. He quickly persuaded 137 independent operators controlling three-fourths of all production in the Virginia, West Virginia, Kentucky and Tennessee fields and one-eighth of all production east of the Mississippi, to subscribe for Appalachian Coals stock and to let Appalachian Coals sell their entire output. Besides stabilizing prices and unifying all sales promotion, Appalachian was designed to stamp out competitive practices that have hamstrung the industry for a decade.

Operators in other regions watched Appalachian's development with deep interest. The U. S. Government through the Federal court at Richmond, Va. obtained an injunction on grounds that the selling pool was in violation of the anti-trust laws. The fine plan of Coalman Francis was spiked before a ton of coal was sold.

But last week Chief Justice Hughes, in addition to commenting on the sad state of the coal trade, handed down a decision reversing the findings of the lower courts and permitting Coalman Francis to put Appalachian Coals into operation.

Vital to the coal business, the decision was significant for all business because it was one of the Supreme Court's most liberal interpretations of the anti-trust laws. The emphasis it placed on the social purposes of a business combination coincided with a prime Rooseveltian motto: "It's not what you do, but how you do it." If Franklin should follow Theodore in holding that there are "good" trusts and "bad'' trusts, the executive arm of the Government would be in complete agreement with the Judicial arm. Dicta of the Chief Justice:

"The fact that correction of abuses may tend to stabilize a business, or produce fairer price levels, does not mean that the abuses should go uncorrected or that co-operative endeavor to correct them necessarily constitutes an unreasonable restraint of trade.

"The intelligent conduct of commerce through the acquisition of full information of all relevant facts may properly be sought by the co-operation of those engaged in trade, although stabilization of trade and more reasonable prices may be the result.

"A co-operative enterprise, otherwise free from objection, which carries with it no monopolistic menace, is not to be condemned as an undue restraint merely because it may effect a change in market conditions, where the change would be in mitigation of recognized evils.

"Voluntary action to . . . aid in relieving a depressed industry and in reviving commerce by placing competition upon a sounder basis, may be more efficacious than an attempt to provide remedies through legal processes."

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