"Whither Are We Bound?"

In 114,000 well-chosen words--probably the longest court opinion ever written --Federal Judge Harold R. Medina last week told why he dismissed the antitrust case against 17 leading investment banking firms. The antitrust laws, he said, require proof of an agreement or conspiracy, something the Government attorneys had not shown. Wrote Medina: "The Sherman Act is not an open door through which any court or judge may pass at will in order to shape or mold the affairs of businessmen according to his own individual notions of sound economic policy . . . Unless there is some agreement, combination or conspiracy the Sherman Act is not applicable."

Judge Medina declared that the syndicate system, in which investment bankers pool their resources to underwrite and distribute new security issues, does not destroy competition, and "has no effect whatever on general market prices."

In one of his most telling points, Judge Medina rapped the trustbusters for the methods they had used to gather evidence. Back in 1940 and 1941, the Securities & Exchange Commission had asked investment bankers for their opinions on compulsory sealed bidding by investment bankers for new security issues. Many of those who were later defendants in the case had expressed a preference for negotiated bidding, the traditional method of floating securities. "Incredible as it may seem . . . the . . . replies . . . were offered in evidence by Government counsel as some proof of the existence of the conspiracy . . . Here we are dealing with concededly honest expressions of opinion, in response to an invitation from public officials to state views on an important public question ... If the exercise by American citizens of their constitutional rights in expressing their honest views on public questions . . . can thus be used against them on a conspiracy charge in an antitrust suit, whither are we bound? ... If this procedure is to be consistently followed, many will hesitate to come before such public bodies and express views at variance with . . . the official policy . . . One of the surest ways ... to discourage communication between a citizen and his Government is to encourage such procedure as was here adopted in an attempt to bolster up a charge of conspiracy."

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