Show The circuit court the statute eommon law distinctions manufacture and sale of chewing and among the people of tbs United definite and as clear as that wnich the tegrating parts smoking tobacco and cigars Tbs States" has emasculated it This Is obviously Supreme court Itself lays’ down In en and the attorney general were greatcon' former one ly aided In framing the decree In the every untrue By Its Judgment Is forcing the statute Ownership company dissolution Into vided tobacco Not trust In of two one Needed— by an excombination restraint of and Supplemental captract Legislation $825000 It has been assumed that tbe presThe ent pert from the bureau of corporations Repeal or Amendment interstate trade made with the purpose ital and the other of $400000 and common ownership I see no objection — and Indeed can Federal Corporation Commission' Proor necessary effect of controlling prices ore1 snuff company Is divided Into In all these companies former by or of establish three companies one with a capital stockholders posed of the trust would Insure see decided advantages — In the enactby stifling competition another I do not set forth In detail tbe terms with a cap- a continuance Ing In whole or In part a monopoly of of $15000000 of the same old single ment of a law which shall describe and of competition id a third with a control of all the such trade Is condemned by the stat- ital of $8000000 and sections of a statute which might Into denounce methods companies of of unfair are which the and arebadges $8000000 ute The most extreme critics cannot capital The licorice which the trust has by decree teen supply the constructive legislation the Ip of Instance a case that ought to be con companies are two one with a cap- disintegrated This Is erroneous and unlawful purpose denounced and Riding the tormatlon law The attempt and pur combinations Into federal demned under the statute which Is not ital of $575800 and another with a Is based upon the assumed Inefficacy of capital to suppress a competitor by un pose There Is also and Innocuousness brought' within Its terms as thus con- capital of $2000000 of Judicial lnjuno corporations Tiey should be subject the him at a price so unprofitcomderselllng strued Tobacco to rigid rules as to their organisation tlons The companies are enjoined able as to drive him out of business doing from and procedure The suggestion Is also made that the pany a British corporation including effective pubor combination business abroad with a of exclusive contracts licity and to the closest supervision as capital of they have different managers dlrec or the making Supreme court by Its decision In the the $26000000 the Porto Rican Tobac- tors purchasing and sales agents If with customers under which they are to tbe Issue of stock and bonds by an Deals last two cases has committed to disAnnual with co company to give up association with of a required court the undefined and unlimited Btockhold executive bureau or commission In the all or any of the numerous capital and numerous other manufacturers of Acretion to determine whether a case $1800000 and the corporation ers reaching Into the thousands department of commerce and labor to With One of restraint of trade Is within tbe United Cigar Sto' s with a capital ttempt to secure concerted action of kindred methods for stifling competl which In times of doubt they might should be tlon and effecting monopoly Under this arrange- the terms of the statute This Is wholly of $9000000 well submit their proposed plans for companies with a view to the con accuracy In a untrue A reasonable restraint of ment each of the different kinds of trol of the market their number is so described with sufficient one future business It must be distinctly hand statute on the to business will be distributed criminal well not between Is under common at under a understood law trade that large that such an attempt could enable the government to shorten Its federal law could Incorporation DEFENDS DECISIONS OF CDURT stood and Is clearly defined It does two or more companies with a not exempt the comwell be concealed and its prime mov task misdeof the prominent brands in tbe single by prosecuting not rest In the discretion of the court vision thus formed and Its Incorporators ers and all its participants would he meanors Instead of an entire con pany tobacco products so as to make at once from prosecution under and It must be limited to accomplish the same managers Bubject to contempt proceed not only possible spiracy and on the other hand to the but Ings and Imprisonment Illelaw for subsequent of a summary purpose of a lawful main contract to competition Thus out serve the purpose of pointing the smoking tobac- character In Cases of Standard Oil and which In order that It shall be en- necessary The Immediate result of but tbe publicity of Its gal conduct combusiness to detail co in tbe business more of the country Is divided the present situation will necessarily for freforceable at all It must be Incidental procedure and the opportunity avoided must be so Tobacco ComDanies that what the present independent com- be If it exceeds the needs of that contract quent consultation with the bureau or activity by all the companies un munity Recommended panies have 2139 per cent while tbe commission In charge of the incorporait is void der different managers and then com Federal Incorporation American Tobacco company will have to congress tion as to the legitimate purpose of its was must follow or there will on In a special7 message The test of reasonableness petition 3308 per cent 1 ventured to 1910 the and January Liggett be activity by one company and stag transactions would offer It as great senever applied by the court at THINKS AMENDMENTS NEEDED feyers 2005 per cent out the disturbance to business the Lorlllard nation by another to contracts or combinations on-law curity against successful prosecutions Only a short time point 2282 per cent and ' the will Inevitably lead to a change In that would probably attend the disso- for violations of the law as would be or conspiracies In restraint of trade company trusts I Reynolds company 266 per cent The of the stock as all oppor lution of these offending or whose neceswas whose ownership practical or wise purpose stock qf tbe other thirteen Believe Present Statutes Good as Far must said: companies or commission Such a tunlty for continued sary effect would be to stifle competi- both might as They Go but Suggests Suppland comlnon has been "But such an Investigation and pos- well be bureau also with Those critics who speak tion to control prices or establish taken preferred disappear the duty invested from of the defendant sible corporations emental Legislation— -- For Fedprosecution American asof this disintegration In the trust as The courts never monopolies ready referred to of aiding courts In Tobacco affects and has been dis- a mere eral Corporation Law of garments have not whose prosperity or destruction trusts sumed pow6r to say that such con- tributed company of dissolution and the recreation change among Its stockholders All or consplra to the inevitable the comfort not only of stockholdersem- within the law It should be an executracts or combinations given consideration covenants restricting but of millions of wage earners have competition tive tribunal of the dignity and power Deo Washington 6— President cles might be lawful If the parties to been declared null and further per- working of the decree and understand ployes and associated tradesmen must of the little the personal danger of attemptTaft’s annual message which was read them were only moderate In the use formance of them has comptroller of the currency or tend to disturb the conbeen enjoined ing to evade or set at naught the sol necessarily In both houses of congress today deals of the power thus secured and the interstate commerce commission The preferred stock of the different eran injynctlon of a court whose ob fidence of the business community too great exact from the now exercise supervisory power publlo which with the statute exclusively companies has now been given vot- Ject Is to dry up the now flowing sources of and decree Is It true the exorbitant and made by plain over Important classes of corporations The full text of the message Is as folprices ing power which was denied it under whose inhibitions are set forth with a capital from its places of hoarding that many theorists and others en- the old under federal regulation lows: organization The ratio of detail and comprehensiveness unex and produce a halt In our present In the the business violating The drafting of such a federal IncoTo the Senate and House of Repre- - gaged preferred stock to the common ampled In the history of equity Juris prosperity that will cause suffering some such have hoped statue that was 78 as This sentatives: to 40 This constitutes a and strained circumstances among rporation law would offer ample oppomessage is the first line could be drawn by courts but prudence of several which I shall send to convery decided change in the character Innocence many for the faults of rtunity to prevent many manifest evils the court of authority has ever at- of the no has decisions The effect of these two gress during the Interval between the the guilty few The question which in corporate management today ownership and control In led to decrees dissolving the comblna Certainly there Is noth- each company cluding Irresponsibility of control opening of Its regular session and Its tempted I wish in this message to bring clearing In t£e decisions of the latest two the hands of the few who are not the In the original suit there were twen tlon of manufacturers of electric lamps adjournment for the Christmas holi cases ly to the consideration and discuswhich should be a dangerous associawholesale a southern grocers’ days The amount of Information to be sion of congress is whether in order real owners defendants who were charged tion an In enof Judicial discretion theory decree against Interlocutory Voluntary Incorporation to avoid such a possible business 0 communicated as to the operations of forcing this statue can ' derive the with being the conspirators through the powder trust with directions by danger something cannot be done by he government the number of ImpoI recommend whom the Illegal combination acquired that the federal charsanction the circuit court compelling dissolu rtant subjects calling for comment by slightest and exercised ters thus to be granted shall be volunwhich these business combinations its unlawful dominion the executive and the transmission to Force and Effectiveness of Statute a Under the decree these defendants tlon and other combinations of a elm' may be offered a means without great tary at least until experience Justifies liar history are now negotiating with Matter of Growth of changing tbe mandatory The benefit to will hold amounts of stock In the vacongress of exhaustive reports by spefinancial disturbance provisions the department of Justice looking to a cial commissions We have been and extent of be derived from the operation of great make it impossible character organization years rious distributee compahles ranging by decree and reorgan of to Include In one message of a reasonbusiness into one within the businesses under the protection making this statue effective for tbe from 41 per cent as a maximum to disintegration izatlon In accordance with law It their able length a discussion of the topics purposes for which it was enacted 28 control a federal would all who such law of the attract lines charter under a as cent minimum per except seems possible to bring about these rethat ought to be brought to the attenTbe Knight case was discouraging and supervision are anxious to keep within the lines in the case of one small company securing compliance the organizations business without general with the tion of the national legislature at Its and seemed to remit to the states tbe Porto Rican Tobacco of the law statute Other large combinations In company first regular session comwhole available power to attack and which they will hold 45 per cent The disturbance in the Industrial that fall to take advantage of the fed"Generally Movement for Repeal of the will not have a suppress the evils of tbe trusts binations called ‘Trusts’ the prin- eral Incorporation The individual defendants are Law— The Supreme Law however errors of that enjoined for three Is to if their failure the In business of Is Slowly sale complain tbe cipal goods right Court Decisions years from buying act Is But now that the to submit Judgment was corrected and only In any stock except from each other many states and In foreign markets ascribed to unwillingness In May last the Supreme court handthe last three or four years has the and the group is thus In other words the Interstate and for their transactions to the careful scrufrom seen to be effective for the accomplish' ed down decisions prevented In the suits In and pubheavy hand of the law been laid upon extending its control during that pe- ment of the purpose of Its enactment eign business far exceeds the busi- tiny competent supervision equity brought by the United States to the great Illegal combinations that riod AU parties to the suit and the we are met by a cry from many differ- ness done In any one state This licity attendant upon the enjoyment enjoin the further maintenance of the have exercised such an absolute doent quarters for Its repeal It Is said fact will Justify the federal govern- of such a charter Standard Oil trust and of the Amer- minion over many of our industries new companies who are made parties to be obstructive of business progress ment In granting a federal charter Needed are enjoined from In any Supplemental Legislation ican Tobacco trust and to secure their Criminal to be an attempt to restore have been way effecting perpetually to such a combination prosecutions to make and beThe opportunity thussuggested for any combination dissolution The decisions are sell In Interstate brought and a number are pending and foreign comtween any p£ th9cpmMkiiV?8 (n viola loned methods of destructive competl federal incorporation it seems to me and serve to advise the bush but Juries have felt averse to convict n between small units and to make merce the products manuof useful tlon of Is the suitable statute constructive legislation by way nsss world authoritatively of the scope Ing for Jail sentences and judges have those useful combinations Impossible facture under such limitations as wlir needed to facilitate the squaring of tlon of the old trust and operation of the act of been most reluctant to Impose such of capital and the reduction of the cost secure a compliance with the antiis companies great Industrial enterprises to the rule 1890 The decisions do not depart In that are essential to con trust law on men of respectable standing It Is possible so to frame of action laid down by the In any ifr'CEiT others of production stock acquiring any substantial way from tbe previous In society whose offense has been All these tlnued prosperity and normal growth a statute that while it offers protec- law This statute is construed by companies are enjoined from decisions of the court In construing regarded as merely statutory In the recent decisions the Supreme tion to a federal company Still having common directors or officers against the Supreme court must continue to and applying this important court makes clear that there is noth harmful vexatious statute as the offense becomes better underand unnecessary fob legitbut they clarify those Important deci- stood and the committing of it par- or common buying or selling agents Ing In tbe statute which condemns invasion by the states it shall sub- be the line of distinction imate business It must be enforced sions by further defining the already takes more of studied and deliberate or common offices or lending money of capital or mere big combinations It to reasonable taxation and unless we are to banish Individualism to each other to secure ject admitted exceptions to tbe literal con- defiance of the law we can be confness of plant organized control by the states with respect to from all business and reduce It to one 6lze of New Companies struction of the act By the decrees ident that Juries will convict Individand a reduc Its purely local business economy In production common system of regulation or conthey furnish a useful precedent as to uals and that Jail sentences will be Objection was made by certain in tlon of Its cost It Is only when the "Corporations organized under this trol of prices like that which now preorthe proper method of dealing with the Imposed dependent tobacco companies that this purpose or necessary effect of the act should be prohibited from ac- vails with respect to public utilities the of and and maintenance of property capital settlement was unjust because It left ganization Illegal trusts The Remedy In Equity by Dissolution quiring and holding stock in other and which when applied to 'all busor the aggregation of These decisions suggest tbe need and In the Standard Oil case the Su- companies with very large capital In combination (except for special rea- iness would be a long step toward state wisdom of additional or supplemental mense size are the stifling of competi- corporations sons socialism by the proper upon approval preme and circuit courts found the active business and that the settlelegislation to make it easier for the combination to be a monopoly of the ment that would be effective to put all tion actual and potential and the en- federal authority) thus avoiding the of the Act Importance a and of entire business community to square interstate business of prices hancing establishing an on of would be a division equality creation under national auspices of the refining transThe act Is the expression Is the violated statute that with the rule of action and legality monopoly porting and marketing petroleum and the capital and plant of the trust into Mere size is no Bln against the law bolding company with subordinate of the effort of a peothus finally established and to preserve Its small factions In amount more nearly in different states which effected and maintained products to corporations of opportunple preserve equality The merging of two or more business the benefit freedom and spur of readifferent cor- equal to that of each of the independthrough eliminates competi- has been suchof an effective agency in ity It is the result of the confident plants necessarily sonable competition without loss of porations This ent contention re tbe stock of which companies was the creation the great trusts and determination of such a people to tion between the units thus combined real efficiency or progress of the but held by a New Jersey company It suits from a misunderstanding monopolies maintain their future growth by prethis elimination is In contravention anti trust law and Its purpose It is of the No Change In the Rule of Decision— In effect commanded the dissolution of the If tbe prohibition and unrestricted serving uncontrolled statute only when the combinaof this combination directed In restraint the enterprise of tbe Individual the not Intended thereby to prevent the tion Is made for purpose of ending this act against combinations bis Merely In Its Form of Expression accumulation of busiand distribution large in transfer capital to is be of enforced by his Intelligence trade and his effectively In order to seThe statute in Its first section deIngenuity competition particular comIn ness which such New a of the Jersey company enterprises the It is essential that the national gov- dependent courage clares to be Illegal "every contract cure control of and enhance prices can secure reduced cost of bination held by It In the ernment shall provide for the creation For twenty years or more this statcombination In the form of trust or stock and create a monopoly sale and distribution It to carry on a ute has been upon the statute book of national corporations otherwise or conspiracy In restraint corporations to and among Its stock- production In the Statute Lack of Definiteness holders and the corporations and In- Is directed against such an aggregaof trade or commerce among the sevthroughout tbe All knew of Its general purpose and legitimate business Is made of the statute tion of capital only when Its purpose defendants were dividual The enjoined of The laws States complaint United conflicting Many of Its violators were approved eral states or with foreign nations" Is that of stifling competition enhancdefinite In the different states of the Union with that It Is not sufficiently cynical over its assumed Impotence and In the second declares guilty of a from conspiring or combining to restore such monopoly and all agreeing or controlling Its description of that which Is forbidprices and estabresrect to foreign corporations makes of enforceIt seemed Impossible misdemeanor every person who shall ments between If we shall have den to enable business men to avoid it difficult if not Impossible the subsidiary corpor- lishing a monopoly for one ment Slowly the mills of the courts monopolize or attempt to monopolize to produce or bring by the decree defeated these purposes Its violation Tbe suggestion Is that or combine or conspire with any other ations tending corporation to comply with their re- ground and only gradually did the mafurther violations of the act and restored competition between the we may have a combination of two about as on so business to carry Many quirements jesty of the law assert Itself person to monopolize any part of the were enjoined which may run on for In a number of different states” large units Into which the capital and corporations died before It of Its trade or commerce of the several In the Tobacco case the court plant have been divided we shall have years and that subsequently the attorI renew the recommendation of the became a living force and they and states or with foreign nations” found that the Individual defendants the useful purpose of ney general may conclude that It was enactment of a accomplished saw the evil grow which they law providing others In two early cases where the statute general In number and that had been entwenty-ninthe statute a violation of tbe statute for the voluntary formation of cor- had hoped to destroy Now its effwas Invoked to enjoin a transportation which was supposed by the combiners gaged In a successful effort to acicacy is seen now Its power Is heavy agreement between Interstate railroad quire complete dominion over the Confiscation Not the Purpose of the to be Innocent then turns out to be a porations to engage in trade and comnow Its object Is near achievement Statute merce among the states and with forv it was held that it was no manufacture sale and distribution companies in violation of the statof Now we hear the call for Its repeal on which nations It Is not tbe purpose of tbe statute combination eign argument Every defense to show that the agreement as tobacco In this country and abroad ute The answer to this hypothetical Interferes with busto' rates complained of was reasonal and that this had been done by com- to confiscate the property and capital case Is that when men attempt to was then advanced for such a law the plea that It and we are advised In iness which was of trusts and every explanation at Methods prosperity at common law because It was said binations made with a purpose and of the offending will enas amass capital stupendous that time offered to possible objec- most general terms bow by some by fine or Imprisonment punishment that the statute was directed sgalnst efTect to stifle competition to able suppress them competition control of other statute and In some other way been confirmed our exthe individual offenders by fine of have tions by all contracts and combinations In re- prices and establish a monopoly not and establish a monopcontrol prices the corporation or by forfeiture of Its perience since the enforcement of the' evil we are Just stamping out can straint of trade whether reasonal at only In the manufacture of tobacco they know tbe purpose of their In transportation statute has resulted In be cured If we only abandon this work the are provided oly common law or not It was plain from but also of Men do not do such a thing and licorice used goods acts of twenty years and try another ex- the record however that the contracts In Its manufacture and of Its products but the proceeding In equity Is a spe- without having It clearly in mind If the actual dissolution of active commercial organizations cific remedy to stop the operation of perlment for another term of years of In those cases would of complained Is and the for snuffs do what purpose merely The cigarettes cigars they It Is said that the act has not done trust by Injunction and prevent Is even more manifest now than It cost the no$ have been deemed reasonable at tobacco suit presented a far more the of of reducing production Can this be said In the face of good use of the plant and capital future then denunciation of It the that was the common law In subsequent cases tbe complicated and difficult case than of suppressing without the thought In restraint of trade the effect of the Northern Securities cobrt said that the statute should be tbe Standard Oil suit for a decree In violation of the statute by use of the bigness of conspiracies competition decree? should not and does not mean the deEffectiveness of Deeres given a reasonal construction and re- which would effectuate tbe will of the the plant they are creating then they That decree was In no way' so draslarge enough to fused to Include within Its Inhibition court and end the violation of tbe rannot be convicted at the time tbe nial of organizations I venture to say that not in the histic or Inhibltive in detail as either the certain contractual restraints of trade statute There was here no single tory of American law has a decree union Is made nor can they be con- be Intrusted with our Interstate and Standard Oil decree or tbe tobacco demade more has been It trade foreign which it dominated as Incidental or as bolding company as In tbe case of more effective for such a purpose victed later unless It happen that later now than It was then that a cree but did It not stop for all time Indirect The main been entered by a court than tbe Standard Oil trust that on they conclude to suppress competi- clear the then powerful movement toward These cases of restraint of trade that company was the American Tobacco against the Tobacco trust As Circuit tion and take the usual methods for purely negative statute like the anti- the control of all the railroads or the the court excepted from the operation company a manufacturing selling Judge Noyes said In his Judgment ap- doing so and thus establish for them- trust law may well be supplemented build- country In a single hand? for the specific provisions by in such can of the statute were Instances which at and The selves a monopoly holding They company plan proving the decree: could not Such a power of legitimate ing up and regulation cotnmon law would have been called adopted to destroy the combination have been a healthful Instance In the The extent to which it has been a case hardly complain If the motive reasonable In the Standard Oil and and restore competition Involved the necessary to tear apart this combina- which subsequently Is disclosed !b at- national and foreign commerce republic even though exercised under Administrative Experts the general supervision of an InteTobacco cases therefore the court redivision of the capital and plants tion and force It Into new forms with tributed by the court to the original Government Needed to Aid Courts In Trust rstate commission merely adopted the tests of the com- of the whole trust between some of the attendant burdens ought to dem- combination mon law and In defining exceptions to the companies constituting the trust onstrate Dissolutions New Remedies Suggested Do we desire to make such ruthless that the federal the literal application of the statute and new companies organized for the statute Is a drastic statute which acdrafting of the decrees In the combinations and monopolies lawful? The of the repeal of this said is Much only substituted for the test of being purposes of the decree and made complishes effective results which so statute and of constructive legislation dissolution of the present trusts with When all energies are directed not Uncldental or Indirect that of being parties to It and numbering new and long as It stands on the statute books Intended to accomplish the purpose view to their reorganization Into toward the reduction of the cost of and this without varying old' fourteen treasonable has for be made must the public benefit by a it production obeyed and which cannot and blaze a clear path for honest merlegitimate corporations Situation After ln the slightest the actual scope and Readjustment be disobeyed without Incurring chants and businessmen to follow It spfdlally apparent that thp courts healthful competition but toward new leffect of the statute In other words The American Tobacco permacompany will be are not provided with tbe administraways and means for making And on the othpenalties be that suq'H s plan may all the cases under the statute which (old) radjusted capital 192000000 er hand the successful reconstruction' evolved but ( submit that tbe discus- tive machinery to make the neoe- - nent Jtt a few hantja tbe absolute conjbave now been decided would have tbe Liggett and Meyers Tobacco comof this organization should teach that sions which have been brought out In sary Inquiries preparatory to re- trol of the conditions and prices preSeen decided the same way If tbe court pany (new) capital $67000000 the the effect of enforcing this statute Is recent to Inor such ‘n whole of field conthe pursue Industry vailing organization days by the fear of the had originally accepted In its construct P Lorlllard company (new) capital not andlaw1 quiries they should be empowthen individual enterprise and effortbut to reconstruct: not tinued execution of the and the R J Reynolds tlon the rule at common law $47000000 to demolish but to nyrreate In ac- have produced nothing but glittering red tq Invoke the aid of the bureau will be paralyzed and the spirit of4 It has been said that the court by Tobacco company (old) capital In determining the commercial freedom will be dead cordance with the cfditlons which and have offered no line of corporations generalities sr chiefly engaged in the the congress has dsc’jrsd shall exist of distinction or rule of action as suitable reorganization of tbe disin WMH TAFT Introducing Into tbe construction Message Subject J |