United States v. United Shoe Machinery Company is a suit which was brought before the Supreme Court by the United States (US) against the defendants- United Shoe Machinery Company (of New Jersey), United Shoe Machinery Corporation, United Shoe Machinery Company (of Maine) along side their officers and directors. It was brought under the provisions of Antitrust Act 1914, c. 323, 38 Stat. 731, 736 aimed at preventing them from making leases and decisions deemed to be in a violation of this law. After its argument on March 16th, 19th, 20th and 21st, 1817, it was decided upon on 20th, June, 1918.
In deed, this was a landmark ruling which still plays a significant role in the life of Americans. Over the years, healthy business has been a very problem to the commercial community in any country. Since business is primarily meant for profit making, several businesspeople have taken advantage to engage in unethical practices to enrich themselves at the expense of other parties. This is the same thing which was evidenced in this case involving United Shoe Machinery Company et al as the defendants in this case.
The Antitrust Laws
The Congress passed Federal Trade Acts during different times to check on the conducts of businesspeople. This was a good step in preventing unhealthy business practices and defending the interests of the consumers and other players in the commercial industry. In 1890, it passed the historical Sherman Act to preserve free competition in trade. It does this by outlawing activities such as monopolization, conspiracy, market segmentation, pricing discrimination and illegal acquisition of contracts through canvassing (Garland, D., 2002).
In 1914, the Congress passed the Clayton Act which essentially addressed the issued left out by the Sherman Act. This includes matters to do with the formation of mergers and interlocking directorates. If well implemented, it would curb the tendency of businesses forming amalgamations with the aim of monopolizing the market. Besides, it would help to control the tendency of business officials from making decisions for their rival organizations.
These are legislations which were well thought and had a significant contribution towards smooth running of business activities. They are supposed to be complied with by anyone who intends to excel in trade. Violations to any of the clauses can be regarded as a criminal offence and even lands one into jail.
The Court Decision
As already highlighted, United States v. United Shoe Machinery Company was a landmark case which still remains in the memory of many Americans. The decision of the District Court to enter into a decree and dismiss a bill was later contested in the Supreme Court. The complainant was justified to file a suit against the defendants for their alleged violations. Of course, the leases and mergers they had done were deemed to be contrary to the legal stipulations governing their execution.
Their demand for the court to dissolve the alleged conspiracies and officers for the accused companies was sensible. Moreover, they were to be heard for appealing to the court to annul the agreements and leases which had been perceived as conspiracies to create a monopoly and eliminate healthy competition in the market.
I would like to say that the decision of the District Court to issue a decree was not unfair. The complainant had a genuine complain which was a clear demonstration of violation of these acts. The purchases they had made an agreement to make were not done in a fair manner. The exclusion of other parties from the purchases was not justified. As was later established by the court, the defendant controlled a huge portion of the market: 95%. Therefore, the formation of merger for the sake of killing competition was a great conspiracy and violation of the law.
On the other hand, the defendant was very strong in denying the allegations. In fact, they claimed that the charges took place more than six years before the suit was filed in the court. Further more, their actions were not supposed to be interpreted as a conspiracy, but as legal activities done in a good faith with the sole aim of promoting competitive and healthy trade. At the same time, the alleged leases were legal and not in a violation of any legal provision.
In this regard, I would like to say that the court was supposed to rule in favor of the complainant. United Shoe Machinery Company and its associates did not comply with the legal provisions guarding the conduct of business organizations. Their intention to enter into a trade agreements was illegal because it was a conspiracy targeting the exclusion of other competing firms. If not checked, it would result into a monopoly and eventual control of the shoe business in the entire US in which it was enjoying a large share of the market.
The conducts of the defendant would greatly impact on the success of other competing firms in the market. It would create unfavorable conditions for their survival. Being that the defendant was the main shareholder in the market, gaining significant control would mean that it would eventually eliminate its small-sized competitors.
The law should protect businesses from unhealthy practices. Monopoly is not good because it leads to the production of low quality products and higher pricing. This is one way through which business organizations can formulate policies to exploit their consumers. However, the government should be involved in business activities particularly through legislations. If stringent laws are made to guard on the conduct of businessmen, they will ensure that they participate in legal activities which will eventually be of benefit to the clientele and other players in this sector (Walker, S., 2002). For instance, there should be no monopoly. Instead, everyone should be ready for a free market structure in which every investor is accorded equal chances of participating in the production, distribution and sale of any commodity.
Any violation should be reported to the court of law. This is the same scenario in the case involving United Shoe Machinery Company and its counterparts against the state. No one should be barred from joining an available market. If there is a free entrance at all times, the existing and well established organizations will have to accept new arrivals. In this case, competition will be stiffer. Hence, making all the rival firms to improve on the quality of their products. This is one way through which legislation can ensure a smooth running of business activities.
The Supreme Court was supposed to rule in favor of the appellant. Its decision would be instrumental in shaping the conduct of businesspeople to ensure that they comply with the stipulations of these laws. They are crucial in determining a smooth running of business activities in the country (Glanville, W., 2007). Ethical business practices are very important. They can make each and every investor to put the interest of their competitors and clients primary to their own. United Shoe Machinery Company and its affiliates should take responsibility for their actions. They are not justified to exclude or eliminate any investor from the market. It is unethical and illegal to do this. It should be made accountable for its actions.
Glanville, W. (2007) Learning the Law. Eleventh Edition. Stevens.
Garland, D. (2002). "Of Crimes and Criminals". In Maguire, Mike, Rod Morgan, Robert Reiner.
The Oxford Handbook of Criminology, 3rd edition. Oxford University Press. p. 20.
Walker, S. (2002). "Origins of the Contemporary Criminal Justice Paradigm: The American Bar
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