Show T y S COMMERCE LAND L WAND W-AND THE TRUSTS TREATED BY TAFT PRESIDENT HANDLES TWO IMPORTANT IM-PORTANT TOPICS IN HIS SPECIAL SPE-CIAL MESSAGE TO CONGRESS WANTS NEW COURT CREATED Tribunal Would Hear Cases Arising Under the Interstate LawChIef Executive Also Urges Federal Incorporation In-corporation Statute to Suppress Abuses and Not to Destroy Legitimate Legiti-mate Combinations of Capital Washington Jan 7Needed legislation concerning tile Interstate commerce law nnd the control of trusts formed the sub Jvct 01 Ireslclcnt Tnfts special message Id congress run prcnldent calls attention atten-tion to the partial Mlluro of the present irmiim rco law tu get results because of the frequent npponlH from Its decisions to federal courts nhd the slowness of the xuprenio court In ducldlng these cases The mcinuKo Buys It would not be proper to attempt to deprive any corporation of the right to the review by a court of any order or do cree which If undisturbed would rob It of a reasonable return upon Its Invist ment or would subject It to burdens which would unjustly discriminate against It aim < l In favor of other carriers similarly situated What Is however of supreme Importance Is that the decision of such questions shall be iw speedy as the nuturu of the Jrciimstunu ulll admit ad-mit nod that n uniformity of declaim bo secured so as to lirlnK about an rlTcc tlve systematic and isHeiitlllc enforcement enforce-ment of the cornerce law rather than connictlng decisions and uncertainty of final result Recommends Court of Commerce lror this purpose I recommend the establishment es-tablishment of a court of the United Htates composed of live judges designated desig-nated for such purpose from among the circuit Judges of the United States to be known as tim United States court of commerce which court shall be clothed with exclusive original Juilsdic tlon over the following classes of cases 1 All cases for the enforcement otherwIse oth-erwIse than by ajudlcntlon and collection collec-tion of n forfeiture or penalty or by In diction of criminal punlilxnr of any order of thus Interstate commerce commission com-mission other than for tlio payment of money 2 All cases brought to enjoin set aside annul or suspend any order or requirement of the interstate commerce commission 3 All such eases ns under section 3 of the act of February Ji 1901 known as tho Hiking net are authorized to be maintained In a circuit court of the United Uni-ted States U All such mandamus proceedings asunder as-under thoprovisions of section 3 O or section sec-tion 13 of time Interstate commerce law are authorized to ho maintained In a circuit cir-cuit court of the United States Reofions precisely analogous to those which Induced the congress to create the court of customs appeals by the provisions provi-sions In the tariff net of August 6 109 may he urged Jn support of tho creation of the commerce couit In order to provide a sufficient num ber of Judges to enable this court to bo constituted It will be necessary to nuthoi Ize the appointment of five additional circuit Judges who for the purposes of appointment might bo distributed to those rlrcilltH where there Is at the present pres-ent time tho largest volume Of business such ns the second third fouith seventh nnd eighth ci cults The act should empower em-power the chief Justice at any time when the business of the court of commerce ilooB not require thn services ot nil tho Judges to reassign the Judges designated to that court to tho circuits to which they respectively belong nnd It should also provide for pa > ment to such Judges while sitting by assignment In thn court of commerce of such additional amount ns Is I necessary to bring their annual compensation up to 10000 Only Second to Supreme Court The regular sessions of such court should bo held at the capital hut It should bo empowered to hold I sessions indifferent In-different parts of tile United States If found desirable and Its orders nnd judgments judg-ments should be made final subject only to review by the Huprcmo coil t of tho United States with tho provision that the operation of the decree appealed from hall not be staved unless the supreme court shall so order The commerce court should bo empowered In Its discretion to restrain or suspend the operation of an order of the Interstate commeico commission commis-sion under review pendlpg the final hearing hear-ing and determination of tho proceeding but no such restraining order should be made except upon nutlco nnd nfetr hearing hear-ing unless In cases where Irrepartlile clnmngo would otherwise ensue to tho petitioner pe-titioner A judge of that court might be empowered to allow a stay of the commissions order for a period of not more than CO days hut pending application applica-tion to the court of Its order or injunction Injunc-tion then only where his order shall contain con-tain n specific finding based upon evidence 1 evi-dence submitted to the judge making the order and Identified by reference thereto that such Irreparable damage would result re-sult to the petitioner specifying the nature na-ture of the damage Under the existing law the Interstate commerce commission Itself Initiates and defends litigation In the courts for the enforcement or In the defense of Its orders or-ders and decrees and for this purpose It employs attorneys who while subject to the control of the attorney general act upon the Initiative and under the instructions Instruc-tions of the commission This blending of administrative legislative and Judicial Judi-cial functions tends In my opinion to Impair the efficiency of time commission by clothing It with partisan charade ties and robbing It of the Impartial judicial judi-cial attitude It should occupy In passIng pass-Ing upon questions submitted to It In my opinion nil litigation affecting the government should be under time direct control of the department of justice and I therefore recommend that all proceedings proceed-ings affecting orders anti decrees of the Interstate commerce commission bo brought by or against the United States eo nomine anl he placed In charge of an assistant attorney general acting under the diction of the attorney general Would Permit Agreements Coming to the subject of railroad pools and trnlllc agreements the president savs The Republican platform of 1DOS expressed ex-pressed the belief that the Interstate commerce law should be further amended amend-ed so as to give the railroads the right to make any public traffic agreements subject to thi approval of the commission commis-sion but maintaining always the principle prin-ciple of competition between naturally competing lines and avoiding tho common com-mon control of such lines by any means whatsoever In lrw of the complete control over ratetnaklnjr and other practices of Interstate In-terstate carriers established b > tho arts of congress and as recomm ndm In this comnninlrntlon I see no reason why agreements between carriers subject to tin act specifying the classifications of freight and time rates fares and charges for transportation of passengers and freight which they may agree to establish estab-lish simon Id not I permitted provided copies of such agreements be promptly filed with tile commission but subject to all tho provisions of the Interstate commerce com-merce art nnd subject to the right of any parties to such agreement to cancel It as to all or any of the agreed rates fares charges or classifications by 30 days notice In writing to tho other parties par-ties and to the commission Other Amendments Urged In accord with other declarations of tho publican platform of 1W8 the president further recommends that tIO Interstate commerce law be amended so as to provide pro-vide that no railroad company subject to time commerce act shall directly or indirectly In-directly acquire any Interests of any I kfhd In capUnl stock or purchase or lease any rnllrond or any other corporation corpora-tion which competes with It respecting business to winch the interstate commerce com-merce act applies that n law be enact ed providing that no railroad corporation corpora-tion subject to the Interstate commerce act shall hereafter for any purpose connected con-nected with or relating to any part of Its business governed by slid act Issue any capital stock without previous or simultaneous simul-taneous payment to It of not less than the pir value of such stock or any bonds or other obligations except notes maturing matur-ing not inoro than one year from the date of their Issue without the previous previ-ous or simultaneous payment to such corporation cor-poration of not less than the par value of such bonds or oilier obligations or If Issued at less than their par value then not without such payment of tho reasonable market value of such bonds or obligations ns nncettalned by tho Interstate In-terstate commerce commission and that no property service or other thing than monej shall be taken In pn > ment to such carrier corporation of the par or other required price of such stock bond or other oth-er obligation except tho fair value of such property services or other thing ascertained as-certained by tho commission Would Prevent Wrong Practices The president continues I bullovo these suggested modifications In and amendments to the Interstate commerce com-merce act would make It a complete and effective measure tor sccmnt reasonableness reasonable-ness of rates and fairness of practices In the operation of Interstate railroad lines without undue preference to any Individual Individu-al or class over any others By my direction the attorney general has drafted a bill to carry out these recommendations which will be furnished fur-nished upon request to the appropriate comrnltte whenever It nmy he desired In addition to tho tom going amendments amend-ments of tho Interstate commerce law thu Interstate commerce commission should he given the power utter a hearing hear-ing to determine upon the uniform construction con-struction of these appliances such as sill steps ladders roof hand holds running boards and hand brakes on freight cars engaged In Interstate commerce used by the trainmen In the operation of trains the defects and lack of uniformity In which lire apt to produce accidents and Injuries to railway trainmen The wonderful won-derful reforms effected In the number of reonns switchmen and trainmen Injured by coup ling accidents duo to the enforced Introduction In-troduction of safety couplers Is I demonstration demon-stration of what can ho done If railroads tire compelled to adopt proper safety appliances Tho question has arisen In the operations opera-tions of tho Interstate commerce employers employ-ers liability act as to whether suit can bo brought against tho employer company com-pany In any place other than that of Its homo office The rig it to bring tho suit under this act should bo us easy of enforcement en-forcement as the right of a piivate person per-son not In tho companvs employ to suo on an ordinary claim and piocess In each suit should bo sufficiently served It upon the station agent of the company upon whom service Is authorized Is made to bond the company In ordinary actions arising under state laws Hills for both the foregoing purposes have been considered con-sidered by the house of representatives and have been passed and arum now bo tom the interstate commerce committee of the senate I earnestly urge that they be enacted Into law Control of the Trusts Time second part of the message la devoted de-voted to the control of trusts AIr a lengthy discussion of trusts good and bail and tho succcus of prosecutions under un-der tho Shernun antitrust act Mr Taft sajs sajsH Is tho duty and purpose of the executive exec-utive to direct an Investigation by the de imartment of justice thiough the grand ury or otherwise Into tho hlstoi > organ zatton and purposes of all the industrial companies with respect to which there Is nny reasonable ground for suspicion that they havei been organizes for a purpose nnd aro conducting business on I plan which Is In violation of the antitrust law limo work Is n heavy one but It Is not beyond the power of the department depart-ment of Justice If sulllclent funds are furnished to carry on time Investigations nnd to pay the counsel engaged In timework time-work But such an Investigation and possible prosecution of corpoiailons whose piospcrlly or destruction nffects the comfort com-fort not oniy of stockholders but millions of wage earners emploves and associated tradesmen must necessirlly tend to disturb dis-turb time confidence of the business community com-munity to dry up the now flowing sources of capital from Its places of hoarding and product n hal In our prvsent prosperity that will cause suffering and strained cir tmt cl cumstanccs among the Innocent many for faults of the guilty few The question which I wish In this message to bring clearly to the consideration nnd decision of the congress whether to avoid business danger something cannot he done by which these business combinations maybe may-be offered n means without great financial finan-cial disturbance of changing the character char-acter orgnnlzatfon and extent of their business Into one within tint lines of the law under federal control and supervision securing statutes compliance with the antitrust strtllteH strtllteHFor Government Control Generally In the Industrial combinations combina-tions cal 1 trusts the principal I business busi-ness Is the sale of goods In ninny states and In foreign markets In othor words the Interstate and foreign business far exceeds tho business done In any one state This fact will Justify the federal fed-eral government In granting 1 federal charter to such a combination to make nnd sell In Interstate nnd foreign com mcrcc the products of useful manufacture manufac-ture Inter such limitations as will secure se-cure a compliance with the antitrust law I Is possible so to frame n statute that while It otters protection to a federal fed-eral company against harmful vexatious nnd unnecessary Invasion by the states It shall subject It to reasonable taxation und control by tho states with respect to Its purely local business rsI Many people conducting great businesses busi-nesses have cherished a hope and a belief be-lief that In some way or other I line may be drawn between good trusts and bad trusts and that It Is possible by amendment to tho antitrust law to make a distinction under which good combinations combina-tions may be permitted to organize suppress sup-press competition control prices and do It I all legally If only they do not abuso the power by taking too great profit out of the business They point with force to certain notorious trusts as having grown Into power through criminal methods by the use of Illegal rebates and plain cheating cheat-Ing and by various acts utterly vlolatlvo of business honesty or morality and urge tho establishment of some legal line of separation by which criminal trusts of this kind can be punished and they on the other hand be permitted under the law to carry on their business Now the public and especially the business nubile ought to rid themselves of the Idea that such a distinction Is practic l Into the stat able or can be Introduced Itnt Ute jn considering violation of the anti Iolatonl not to of course trust law we ought coure that that law makes unlawful forget tlllt iLW which mfhods currying on business nthods of IUHlness cvi were rtgan = J as before Its passage hefort and success of business sagacity fceas dencc Icnct denounced In this deL and that the were enolnc not bccuuie ul their Intrinsic ImmoralIty of tho dangerous results its but because InerouB sults toward which they tended thy concentration con-centration of Industrial power in the hands of the few leadfng to opprea stun IUlds injustice In dealing therefore tmsed the men who hae usel with many of Y ih VS STii wih methods condemned by the statUte for the purpose of maintaining 1 prott able business llrl080 may well facilitate na In the method of 10 h them change by Jj C1111J0 li business mind enable them to bring back Ing Into the anl zone o lawfulness without tho economy or losing to the countrj management by which In our domesto trade tho cost of production has been materially lessened and In competition with foreign manufacturers our foreign IIUufacturers trade has been greatly Increased Asks National Corporation Law I therefore lecommend the enactment by congress of a g neral law providing for the formation of corporations to engage til gage In trade and commerce unions time nations protecting states nnd with foreign Intuns ing tlcm from undue Interference by the states ami regulating their activities so under national as to prevent tIme recurrence undt tional auspices of those abuses which have arisen under state control Such a law should provide for the isbiie of stock of such corporatlonas to an amount equal corporutonas onlv to time cash paid In on the stock ami If tho stock bo issued for property then at n fair valuation ascertained under un-der approval and supervision of federal authority after n full and complete disclosure dis-closure of nil tho facts pertaining to the value of such property and the Interest thetdn of the persons to whom It Is proposed to Issue stock In payment of such property I should subject the real and personal property only of such corporations cor-porations to the same taxation as imposed Im-posed by the states within which It may he situated upon other similar property located therein amid It should require I such corporations to file full and complete com-plete reports of their operations with the department of commerce and labor at regular Intervals Corporations organized under this act should ho prohibited from acquiring and holding stock In other corporations cor-porations except for special reasons upon approval by the proper federal authority author-ity thus avoiding the creation under national auspices of the holding company with subordinate corporations In different states which has been such an effective agency In the creation of the great trusts anti monopolies State Laws Conflict I the prohibition of tho antitrust act against combinations In restraint of trade Is to bo effectively enforced It Is cssen tlni that the national government shall provide for the creation of national corporations cor-porations to tarry on n legitimate business busi-ness throughout the United States rime conflicting laws of the different states of the union with resftect to foielgn corporations corpora-tions make It difficult If not impossible for one corporation to comply with their requirements so mum to carry on business In a number of different states To the suggestion that this proposal of federal Incorporation for Industrial combinations com-binations Is Intended to fuinlsh them I refuge In which to continue industrial business under federal protection I should be multi that the measure contemplated contem-plated does not repeal the Sherman anti trust law and Is not to bo framed so as to permit the doing of tho wrongs which It Is I the purpose of that law prevent but only to foster a continuance and advance ad-vance of the highest Industrial efficiency without permitting Industrial abuses Such a national Incorporation law will be opposed first by those who believe that trusts should be completely broken up and their property destroyed I will be opposed second by those who doubt the constitutionality of such federal incorporation In-corporation and even if It is valid object to It ns too great ffxlrnjl 1 centralization I will be opposed third by those who will Insist that a mere voluntary Incorporation Incor-poration like this will not attract to Its assistance tho worst of tho offenders a Unst the nntltrust statute and who will therefore propose Instead of It a system sys-tem of compulsory licenses for nil odor nl corporations engaged In Interstate business Let us consider these objections In their order The government is now try Ing to dissolve some of these combinations combina-tions nnd It Is I not the Intention of tha gov eminent to desist In the least degree In its effort to end these combinations which are today monopolizing the commerce com-merce of this country that where It appears ap-pears that the acquisition and concentration concen-tration of property go to the exlent of creating a monopoly of substantial and dlrectly restraining Interstate commerce it Is I not the Intention of the government to permit this monopoly to exist under federal incorporation or to transfer to the protecting wing of the federal gov gv ernmen of n state corporation now violating I vio-lating time Sherman net Hut It Is I not anil should not be the policy of the government gov-ernment to prev ent reusonahlo concc tratlon of capital which Is nec ss iry to the economic development of manufacture manufac-ture trade and commerce May Doubt Constitutionality Second There are those who doubt tho constitutionality of such fed < ral Incorporation Incorpor-ation The regulation ot Interstate and foreign commerce Is certainly conferred In tho fullest measure upon congress and 1 for the puiposo of securing In the most thorough manner that kind of regulation congress shall insist that it may provide and authorize ng ncles to carry on that commerce It would seem to be within its power this has been distinctly affirmed atrmed with respect to railroad companies doing nn Interstate business and Interstate bridges rime power of Incorporation has been exercised by congress and upheld by the supreme court In thIs regard Why then with respect to any other form of interstate commerce like the sale of goods across state boundaries and Into foreign conn tries may the name power not bo asserted1 Indeed It Is tho very fact that they carry on Interstate commerce com-merce that makes these great Industrial concerns subject to federal prosecution and control How fur as Incidental to the carrying on of that commerce It may be within the power of the federal government gov-ernment to authorize the manufacturer or goods Is perhaps more open to discussion discus-sion though a recent decision of the supreme su-preme court would seem to answer that question tho affirmative The third objection that the worst of fenders will not accept federal Incorpora tion Is easily answered The decrees of Injunction recently adopted In prosecu tions under the antitrust law are so thorough and sweeping that the corpora tlons affected by them have but three I courses before them First they must resolve themselves Into their component parts In the differ ent states with a consequent dltLr themselves of capital and effective organ electve Izatlon and to the country of concen trated energy and enterprise or second In defiance of the law and under some secret trust they must attempt to con tlnuo their business In violation of the federal statute and thus Incur the pen allies of contempt and bring on an In oyltable criminal prosecution of the Indl vlduals named In the decree and their ns soclntPs or Third they must reorganize and ac cept In good faith the federal charter I sujgest a federal compulsory license law urged as 8 substitute for I federal Incor poratlon law Is unnecessary except to reach that kind of corporation which by virtue of the considerations already ad consideratons vanced will take advantage voluntarily of an Incorporation law while the other state corporations doing nn Interstate business do not need the supervision or the regulation of federal I license anti thereby woulmi only be necessarily burdened |