United States and China-Japan Line.- 13 sailings 8 sailings 7 sailings. 41 sailings No other sailings can be admitted without the consent of twothirds of the signatories based on their respective number of sailings. The sailings allotted to each of the signatories shall be distributed as nearly as possible at regular intervals throughout the twelve months, and the order of taking the berth shall be mutually arranged by the agents in New York. 2. That the fundamental condition of this agreement is to be close co-operation, and in order to secure this result the rates of freight from America to the East shall be controlled and mutually determined by the agents in New York, who before naming or altering a rate on any commodity shall first confer and agree amongst themselves as to the rate to be named and/or 1 the reduction to be made. All engagements shall be reported to one another by the Agents in Conference the first business day of each week, and copies of freight lists are to be exchanged not less than three weeks after the departure of the steamer. 3. That all contracts shall be taken for joint account, and where such contracts cannot be divided such shortages shall be made good to the parties in arrear out of the other contracts previously or subsequently secured, it being the purpose to equitably divide all bookings. Each line shall, however, be entitled to book cargo specifically for their next steamer to be despatched, provided ready to load within 30 days. No line to book cargo specifically for a steamer until allowed to do so by a two-thirds majority vote of the New York agents, based on their principals' respective number of allotted sailings. 4. That engagements of Petroleum in cases, Phosphate Rock and Coal are not necessarily joint operations, but competition for such articles is to be avoided and the closest possible co-operation is to be aimed at. Bookings of Petroleum in cases, Phosphate Rock and Coal are to be reported as soon as fixed. 5. That shipments of the Quartermaster's Department, the Navy (excluding Coal), and the Insular Department, and/or any other Government Department, shall be taken for joint account and 1 Thus in original.—Ed. pooled on a basis to be agreed between the respective Agents in such a way that all may obtain their proper proportion of the benefits arising from such contracts. Shipments of Specie and Explosives shall be dealt with in like manner. 6. That no return of any description be given to Shippers, Contractors, etc., and where Freight Brokerages are paid the amount shall not exceed one and one-quarter per cent., unless where mutually agreed by all Agents to the contrary. 7. That in order to avoid unnecessary expense and possible delay, the respective parties shall nominate one of the firms of Agents in New York to act for the time being as the mouthpiece of the Associated Agents; and also shall appoint one of their own number to act in a similar capacity on this side. All cabled enquiries regarding matters of policy, important contracts, etc., shall be communicated to the respective parties through this channel, and their replies forwarded in the same way; but it is understood that this arrangement in no way interferes with the right of each signatory to communicate with his own Agents whenever and however he thinks fit. 8. That in all matters of detail not herein decided the settlement shall be left in the hands of the Agents in New York, who shall as far as possible be given a free hand in the conduct of their business. 9. That where it is considered advisable to book cargo for account of the Associated Lines, which through lack of accommodation on the regular steamers might otherwise fall into the hands of competitors, such cargo shall be taken care of by chartering additional tonnage, the result to be divided in proper proportion between the various interests, and the loading commission credited to the Agents pro rata to the share in the trade which each of the signatories hold, based on their respective number of sailings. All questions connected with the bookings of such additional cargo and the chartering of tonnage shall be governed by a twothirds majority vote of the New York Agents, based on their principals' respective number of allotted sailings. Each service to charter and load such extra tonnage in turn. 10. That the whole purpose of this Agreement is an equitable and fair division of the traffic between the services, to work openly and fairly with one another, and to avoid any and all steps by which even the appearance of undue advantage is given. Should therefore conditions and questions arise which are not herein provided for, the purport and not the strict wording of this Agreement is to be considered. II. That no steamer of a greater carrying capacity than 8,000 tons all told is to be loaded under this Agreement, except by the unanimous consent of the Agents. 12. That should any disputes arise under this Agreement they are to be left to the decision of the signatories to this Agreement, whose voting power shall be pro rata to their share in the business. Should any decision so arrived at be objected to by any party or parties hereto, the matter shall be referred to the decision of two Arbitrators, who shall be commercial men in London, New York, or Hong Kong, whichever place in the opinion of the majority of the signatories, as above, is best suited for the purpose, one to be appointed by the party or parties claiming or objecting as the case may be, and the other by the party or parties against whom the claim or objection is made; or in the case of a question as to the validity of a settlement by those parties who are content with the settlement as presented; with power to such nominated Arbitrators to appoint an Umpire whose decision shall be final and conclusive between all the parties to this Agreement, and for the purposes of any such reference this Agreement shall be deemed to be a submission to Arbitration within the meaning of the Arbitration Act, 1899, or any statutory modification or re-enactment thereof for the time being in force, the provisions whereof shall apply as far as applicable. 13. That this Agreement is to commence with steamers sailing from their first loading port in the U. S. A., on or after April 1st, 1905, and to remain in force until cancelled by any of the parties thereto giving six months' written notice of their desire to withdraw, such notice not to be given previous to 1st day of July, 1906. By authority of BARBER & Co. Incd., WALTER CHAMBERS. WILLIAM ADAMSON & Co., on behalf of SHEWAN TOMES & Co Per Pro. T. B. ROYDEN, and by written authority of the HAMBURG AMERICA LINE and the UNION S. S. Co. of Hamburg P. L. ROOPER. For THE AMERICAN & ORIENTAL LINE, Howard Holder & Partners, Ltd., ALEX. FREELAND, Director, General Managers Witness to the Signatures of WM. ADAMSON & Co., P. L. ROOPER, and ALEX. FREELAND, ANGLO AMERICAN OIL Co. Ltd., CHAPTER X THE PATENT MONOPOLY NOTE FOR several years past the United Shoe Machinery Company has been regarded, and with reason, as the foremost example of a Patent Monopoly. This concern is, moreover, a combination, since prior to 1897 much of the machinery now controlled by the single company was divided among four concerns and was therefore, subject to at least limited competition. In February 1897 the United Shoe Machinery Company was organized under the laws of the State of New Jersey. By means of an issue and exchange of its capital stock it took over the business of four concerns-the Consolidated and McKay Lasting Machine Company, Goodyear Shoe Machinery Company, McKay Shoe Machinery Company and Eppler Welt Machine Company. Since that time the United Shoe Machinery Company has substantially controlled the shoe machinery business of the United States which has been handled strictly upon a lease basis. Powerful as the company has been it has been constantly threatened by the invention of new types of shoe machinery. Frequently it has been compelled to buy out such potential competitors, often at high valuations. The license or lease system of the United Shoe Machinery Company is shown below in the exhibits by a typical lease contract. There has also been included another typical lease or license agreement, that of the Motion Picture Patents Company and one of the Crown Cork and Seal Company. The last exhibit in this chapter consists of excerpts from the decision handed down in March 1912 in the so-called Dick case. Influential as was the decision in the Dr. Miles Medical Company case, in restricting the tendency toward monopolistic control so far as the conditions and terms of sale have reference to unpatented articles, the Dick case goes the full length in the opposite direction and upholds in the most sweeping language the power of concerns and individuals holding patents to impose whatsoever conditions they may deem fit upon the use of articles covered by such patents or applications. The dissenting opinion rendered by Mr. Chief Justice White and concurred in by Mr. Justice Hughes and Mr. Justice Lamar condemns in no uncertain terms the doctrine thus laid down, chiefly on grounds of general public policy. This decision was not rendered by a full bench, Mr. Justice Day taking no part in the decision, while the vacancy caused by the death of Mr. Justice Harlan remained still unfilled. Hence as being a four to three decision it was really a minority decision. Petitions for a rehearing have been filed and there is a chance that these may be granted. Unfortunate as the decision appears it may nevertheless have in it the germs of much good. This arises through the fact that one of the most needed things at the present time to check the tendency toward monopoly is a radical reform of the Patent Laws. The first step in this direction was taken by President Taft on May 10, 1912 in sending to Congress a message asking for legislation to authorize him to appoint a commission to investigate the Patent laws and report changes necessary-Ed. EXHIBIT I LEASE AND LICENSE AGREEMENT OF THE UNITED SHOE MACHINERY 1 COMPANY FOR CERTAIN MACHINES Goodyear Department. [Form M. G. J., 6-806.] LEASE AND LICENSE AGREEMENT NUMBER SEWING AND STITCHING MACHINES. This agreement made at Boston, in the State of Massachusetts, this day of, 19—, between the United Shoe Machinery Company, a corporation organized under the laws of the State of Maine, having an office in said Boston, hereinafter referred to as the lessor of the one part, and —, of -, in the State of —, hereinafter referred to as the lessee, of the other part: Witnesseth that the lessor, in consideration of the covenants and agreements on the part of the lessee herein contained, does 1 United States of America v. United Shoe Machinery Company and others. Petition, In the Circuit Court of the United States for the District of Massachusetts, Exhibit 5, pp. 113-120. |