The Corporation and the Twentieth Century

229. Martin (1971); Hoogenboom and Hoogenboom (1976, chapter 2).

230. Neal (1969).

231. Vietor (1977) shows that shippers overwhelmingly favored rate regulation and railroads

overwhelmingly opposed it. This is at variance with the well-known narrative of Gabriel Kolko (1965), in which all railroad regulation came into being at the behest of and for the benefit of the railroads.

232. Quoted in Blum (1952, p. 1558).

233. Martin (1971, pp. 128–36).

234. Chandler (1977, p. 186).

235. Letwin (1965, pp. 250–53); Sklar (1988, pp. 364–82).

236. According to the 1912 annual report of Attorney General George W. Wickersham, the

Taft administration initiated 70 suits compared with 62 for all previous post-Sherman admin- istrations combined. (Cited in the New York Times, November 23, 1912, p. 11.) Richard Posner’s data are broken down by year not administration, but in the period 1910–1914, the federal gov- ernment initiated 91 antitrust suits compared with a total of 61 before then. This is the most suits of any five-year period until prosecutions skyrocketed under Thurman Arnold in the 1940s (Posner 1970). See also Bittlingmayer (1992, p. 1705).

237. Letwin (1965, pp. 253–65); Sklar (1988, pp. 146–47).

238. Kramer (1954, pp. 437–38).

239. Jones (1921, pp. 490–92); Sklar (1988, p. 152).

240. US Senate (1913). Perkins testimony is pp. 1088–1145; Brandeis is pp. 1146–1292. 241. US Senate (1913, p. 1094).

242. Sklar (1988, pp. 285–323).

243. US Senate (1913, p. 1162).

244. Hughes (1977, p. 122).

245. US Senate (1913, p. 1289).

246. Yet Marshall himself continued to equate competition with “economic freedom and

enterprise” (Marshall [1920] 1961, VI.iii.2).

247. DiLorenzo and High (1988); McNulty (1967); Morgan (1993, p. 567).

248. Klebaner (1964).

249. Stevens (1914a, 1914b). The eleven were: “Local price-cutting; operation of bogus ‘in-

dependent’ concerns; maintenance of ‘fighting ships’ and ‘fighting brands’; lease, sale, purchase or use of certain articles as a condition of the lease, sale, purchase or use of other required ar- ticles; exclusive sales and purchase arrangements; rebates and preferential contracts; acquisition of exclusive or dominant control of machinery or goods used in the manufacturing process; manipulation [probably meaning attempting to corner a market]; blacklists, boycotts, white- lists etc.; espionage and use of detectives; coercion, threats and intimidation.”

250. Another practice Brandeis wanted made illegal is full-line forcing, which he articulated in the context of what we now call an essential facility. “A practice like that of the Shoe Machin- ery Trust of denying to the individual the right to lease a certain machine unless he will take his

Notes to Chapter 3 575

other machines from the trust, so that competition is killed; that is, a practice under which he who controls an indispensible [sic] article of commerce uses it to kill competition in other ar- ticles is obviously unsocial, and ought to be prohibited” (US Senate 1913, p. 1162). It is notable that unlike the eventual Clayton Act, the draft Brandeis penned for La Follette would have outlawed only those forms of nonstandard contracting that he believed would have disadvan- taged small firms.

251. McGee (1958).

252. Bork (1978, p. 157); Williamson (1985, p. 382).

253. Williamson (1979). As we saw, economists also now understand that rebates and other

forms of price discrimination are the results of market power not the cause. Price discrimination also tends in general to militate in favor of economic efficiency, since it encourages welfare- enhancing transactions that would not take place in a single-price regime.

254. Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911).

255. Be careful to note that this discussion is about voluntary RPM contracts. These are often confused with so-called fair-trade laws that legally require RPM. Fair-trade laws, pushed strongly by small retail druggists who faced competition from discounters (Hawley 1966, pp. 254ff.), would be among the many pro-cyclical policies ushered in during the Depression by the New Deal.

256. Breit (1991). On the other hand, Oliver Wendell Holmes dissented in the Dr. Miles case on the sensible grounds that perhaps businesspeople know more about business practices than courts do.

257. Brandeis (1913). Brandeis redefined not RPM but price cutting below manufacturer’s suggested retail price as the “unfair” practice, which, like all instances of price cutting, he be- lieved, would lead to monopoly as small businesses tried to protect themselves through combination.

258. Telser (1960).

259. Marvel and McCafferty (1984).

260. McCraw (1981, p. 47). Thus in many ways Brandeis “was less the ‘People’s Lawyer’ than

the ‘petite bourgeoisie’s lawyer.’” 261. Mowry (1946, p. 159). 262. Solvick (1963).

263. Barfield (1970).

264. Rosen (2018, p. 66).

265. Mowry (1946, pp. 188–89).

266. Roosevelt (1911, p. 652).

267. Manners (1969); Morris (2010); Mowry (1946).

268. Mowry (1946, p. 236).