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Show L 'i-1 ? . !njf ! PRESIDENT SENDS 1 SPECIAL MESSAGE tha ordor of tha commtosfoii ufh ratts are affirmed It may ed how tffcMlKe tl ia remedy r haps most shiper rn.cr mov'n reuses have been porfatlnn. several First. U has re ode ted possible great economy: second, by a union of, 4orw.iT rowipcutors tt has reifli-efbe probability ef excessive competition, and. ha beep exthird, tf the tensive enough, and certain methods In Th aihAtvjn d do not rewtri the rgrraaitV to have which they m requped M custhe treatment ot pay. for the simple reason that they tup added the rates ph to the cost of fMS tomers have been adopt'd, . I he combiner snd tnueenham ed the prlce tiers-o- f h.ne secured a monopoly and complete to their r murmurs, amt that the puSlIf control of prices or rales. In ff4 paid the bill. On the A 'combination successful In achieving hand, the enormous olum of traaspW complete control over a particular line of button cherees the great tiumh-r- f y manufacture lias - frequently been called flh srjjb- - tariff annually with the a "trust," I presume that the derivation cf,rr(mr e ermrmiselon. anuj n of the yard la to be explained bythe fact to aTnu5fTWWlfl and the tmrx.,(il-lithat a usual method of urrtlng out the of any comm supervising the plan of the combination has bec to put In if advance tarl" of mnlf'ng their Iw the capital and plants of varum liupvld-ualon evedv transp .rtsuot Muohif cfft-tlArms, or corporation engaged In tine etihln the tnttd States to th exth earns business under the control of tent that wmHd be If th-- lr trustees. lomurrctue were required In the me The Increase In the capital of a buxtxrllf hna sattsAed ms that httig of eicry for the purpose of reducing the ines If granted. aliould ..be , tl Is Coa.-r- . cost of production and effecting economy In a very United and reatrhird In the management has become as essenform tial in modern progress as the change Commission Should Proba Chang. from the hand tool to the- - machine. we come to 1 construe When, therefore, therefore recommend that the com in, ree commission he einpov-ere- d the object of congress In adopting the "Sherman Act" In whenever any proposed Increase of rates is filed, at one, either on eonv 1890, whereby In the Arst section every contract, combination In the form of a , plaint or of Its own motion, to upon an Investigation into the reaaonablt-sea- s trust or otherwise, oror conspiracy In reforelgtn trade or of such change, and that If b ur. straint of Interstate I her empowered, in Ita dlaeretle,q te commerce, ia condemned as unlawful and restraint xtpone the effective date of auch pro--' made subject to Indictment and In the secposed Increase for a period not cxervd- - ' by Injunction; and whereby monopoly or attempt log 0 days bevond the date when u h ond section every and every combination or rate would take effort. If within thla to monopolise, other with persons to monopoconspiracy lime It shall determine that sueh Is unreasonable. It may then hr lise any part of Interstate trade or comaa Illegal and mada It order, either forbid th Increase m merce, iatodenounced similar punishment or reubject HAntr A the maximum beyond which straint. we must Infer that the evil aimed It ahall not be made. If, on the the mere bigness of ths enhand, at the expiration of this time tie at was not terprise, but It was the aggregation of commission shall not hava completed capital and plants with the express or Investigation, then the rates shall or TrupUed 4ntot4o ..restrain Interetat effect Threcl xefy ' a if would under thetake excommerce, or to monopolise It In isting law, and the commission may con- foreign or In part, whole f tinue Its Investigation with such result a might be realised under-t- h Not Necessarily Bad. law as It Trust stand Th claim Is very Monopoly destroys competition entireearnestly Advanced bv some large associations of ehlptem ly and the restraint of the fulla and free that shipper of freight should b .tendency operation ftf competition has powered to direct th route over whl,I to restrain commerce and trade. A com-their- - shipments should pass to destinanation ot.Jerwon. formerly engaged hr tion. amt In thlx connection It has been trade as partnerships or corporations or mged that the provisions Of section otherwise of course eliminates the comof the Interstate commerce aet, which petition that existed between them; but now empowers ths commission, aftet th Incidental ending of that competition on hearing to establish is not to b regarded as necessarily a complaint. through routes and maximum Joint rates direct restraint of trade, unless ofauch to be charged.- n character that the no reasonable an or nulsfttclory through rout shall hare and --effect to .restrain trade ar been already established, be amended so or are apparent from tha circumstances as to empower the, commission to tak expressly declared A to be the object Of such action, even when on existing reamere Incidental rethe combination. sonable and satisfactory route already straint of trade and competition Is not exists. If it be poeslble, to establish ot the act, but It inhibition within th additional routes This seems to m to Is where the combination or conspiracy be a reasonable proposition. or contract ts hievltably and directly a Th Republl, an platform of 190 desubstantial conatralnt of competition, and In clared favor of amending the Interso a restraint of trade, that the statute state commerce law, but so aa always to s violated. maintain th principle of competition beThe second condition of the set ts suptween naturally competing - lines, knd of the Aral, A 'direct restraint avoiding fh common control of such plement ot such aa is condemned in ths tines by any means whatever. On of Arst trad section, It successful and used to the most potent meant of exercising such competition, Is one of the comcontrol has been through th holding of suppress monest methods of securing a trade stock of on railroad company by ancond. mned In ths second other company owning a competing tins monopoly, Thla Condition has growrn np under x. section. It Is possible for the owners of a busipress legislative power conferred by the law of many states, and to attempt now ness of manufacturing and selling useful articles of merchandise so to conduct, to suddenly revere that, policy so-f- tr as It affects ths ownership of stocks here- their business' as hot to Violate the Inlaw and yet tofore so argufred, would be to Inflict hibitions mf th to secure to themselves' 4h beneAt of the grievous Injury, not only upon the coreconomies of management and poration affected but upon a large body tlon due to th concentration under one of the Investment holding public. of rontrol -large capital and many plants Plan t End Rail Combine. use no other Inducement than If I, however, recommend that the law the they ronstant tow price of their product shall be emended so as to provide that and Its quality to attract custom, from and after ths date of Its passage and theirgood business Is a profltable one', no railroad Company subject to th Interviolate no law. If their actual they state commerce act shall, directly or In- competitor! are small In comparison with Interest any of directly, acquire Jhe total capital Invested, the prospect kind In capital stock or of new Investment of capital by others teas any railroad of any other corpora a profltable buslneas la sufficient tlon which competes with it feapeQtjul allot) tp. rMtr.ln th., hualmjL.ta jahluh. th Interstate com- - M)e price n4.potf.nl(ll their prodBut especially for uct But If at which they sell mere act applies. they attempt by a use of their the protection of the minority stockholda sale of and preponderating by capital, ers In securing to them the best market their goods temporarily at unduly low for ther stork, I recommend that such to drive out of buslneas their prohibition be coupled with a proviso prices, or If they attempt, by exthat tt shall not operate to prevent any competitors clusive contracts with their patrons and corporation which, at the date of passage threats of except upon such ef such act, shall own not less than hetf-ef and outstanding liar the entire-issue- d to use character, largeness of capital stock of any other railroad com- their resources and the the extent of their pany, from acquiring all or the remaincompared with th total output der of auch stock; nor to prohibit kny output railroad company- - which at the date of as a means of compelling custom and off fompetltion, then they the snarlnmit of the law la operating g frightening railroad of any other corporation under disclose a purpose to restrain trade and lease, executed of s term not less than to establish a monopoly, aitd violate the Set. IS years, from acquiring tha reversionary ownership --of, Aha demised railroad;- - but Law to Suppress Abuses." that such provisions ahall not operat to tne "Ticqufsinon TV object of the anti-truauthorise law was to suppress the' abuses of business of the" through stock Ownership or Interest therein In kind described. It was not to Interfere of a competing line or any other with a great vnlum violation of the ofcapUJ wblc4v concentrated under one organisation, den The Republican platform of duced' the cost of production and made declare In favor of such national Ms proflt thereby, and took no advantage will legislation and supervision of Its else, bv methods akin to duress, to of stocks and allAe competition with It. the future Interstate In and bonds by carriers, order I wish to make this distinction as emlo rarry out Its provision I recommend ' possl bte, -- been use T conceive the enactment of a law providing that phaticthat nothing could happen more destrurx no railroad corporation subtect to the tlve to the prosperity of thls countrr than commerce act shall hereafter's of that great economy In prvvl n any purpose connected with or relating the loss which ha been, and will be effectto any part of Its business governed by sal I'art, Issue any cxpltal stn k without ed tn all manufacturing lines by the emor capital under one manprevloujtpr simultaneous payment to tt ployment I large do not mean to say that of not less than the par value of such agement, stork, or any bond jjr other obligations there Is not a limit beyond which the (except notea maturing hot more than economy of management by th enlargeone year from the date of hotr Issue), ment of plant ceases, and where this without the previous or aim ultaneoua pay- happens and combination continues bement to such corporation of not ass than yond this point, th very fact shows Intent to monopolise and not to economize. the par value of such bonds, or other obThe original purpose of many combinaligations, or. If Issued at less than their -la thla country was not per value,- - then not without-su- m par. tion ot capital msnt of 'Abet reasonable market value of conflped to the legitimate and proper obsuch bonds or obligations as ascertained ject of reducing the cost of production. bv the Interstate commerce contrary, the history of most com in Is. iOn s'onand that no property, svsvlce. trades will show at times a feverish deor olher thing than money, ahall be sire to unit by purchase, combination, r otherwise, all the plants In the counu! en In payment to auch of the par or other required try engaged tn th manufacture of a par'The Idea was rife prhe of such stock, hor.d orotlrer oblige, ticular line of agoods monopoly eou!d be eflion, except the fu'r value of ajh prop- that thereby control of prices brought erty', services or other thing ruined fected and awould tnur to th proflt of which about by the commission: and that sueh act The shall altg coy tain provisions tq- - prevent tiloe engaged In the combination. t'ie abuse by th Ipiprovtilent or linprop. path of commerce Is strewn with failures Their projectors er issue of note maturing at a period of such combinations not exceeding 13 month from date, in found that the union of sit plants did not where especially to manner as commit the commissuch prevent competition, economy had not been pursued in sion to th approval, of a huger amount of stork or bond In order to rente suck the purchase and In th conduct of tho notes than should legitimately have bees business after th aggregation was Ther wer enough, however, of retired. to arouse Roch act should also provide for auch successful combinations men as to th approval by the Interstate commerce th fears Of good, patriotic amount of slot k and bonds result of a continuance, of thla movement to be Issued by anv railroad company toward the concentration tn th hands of a few of the absolute control of th subject to this act upon any reonjunlx. tldn. pursuant to Judicial sale or other prlcjei of all manufactured product. legal proceedings, la order to prevent th Refers to Suger Trust Case. ssue of stocks and bonds to an amount was passed In statute fair in excess -of the value tlxe of Th anti-tru- ,1 . - wnjoa.iS u nmn. -suth ror. Tiu and prosecution! wer sow begun erty which Is of th United States ganlxallon. under It In th case as known By my direction tl e attorney general night, has drafted- a bill fo carry out thsst because of th narrow scop which 'will be th combination aought to recommendations, pleading, upon reqA-s- t to th appropriate en Joined was held not to b Included committee whenever It may be dxatrsd. - wUhinths prohibition of th act, because tho did not go " av.rm.nta plant .caulltton of manufacturing T LAW AND tn not did Tu ). refining of sugar, and chid that of a direct aad Intended FEDL RALJN CORPO RATIO end commerce q the. -- upon .trad stale anl dltvrytn -f suaar --acre, foreign trad.- Th Government Control of Biff Industrial boundaries and kru wu rwiuit of th wnf tru,tother Corporations Favored Assarts companies in that It gv haopy similar meta combination seeking Scope of Present Law g tn hod establishing by Too Wide. of making proflt control and monopoly Hi a of line of manufacture, a There has been a marked tendency i. immunity against prosecution In th business In thla country for 40 year amt her hat ast federal Jurisdiction, toward combination of capital respect to a Jurisdiction la barred plant la manufacture, eat and trawe business which Is neosasarilyjsommensur- eeeiPr.gs tx-e- jr-- ha -- Makes Recommendations - as - to - Com-- merce Law and the Trusts " . mt-I- v a. e te-- SPECIAL CONSTITUTE A WOULD COURT nir-Sla- te Judges to Have Power to A:t in Certain Specified Cases Wisdom of Federal Incorporation of Industrial Companies Sjggested Scope of Present La wToo Wide Washington, Jan. f ThrAfolluwIng I Frexl'ient Tft a' message tv onkre on th subject of needed legislation regarding tha Interstate commerce Jaw and tba control of tlia truata. To tha Sonata and Houaa of Represrnt-..atlves,,.- ,. J withheld fruBr.tBX annual message a discussion of needed legislation undar tha authority whi h congress haa to regulate comtuana between tha atataa and with foreign couutrlaa, and aald that 1 would bring thla subject-matte- r to your altantlon later in tha wanton. Accordlug-- 1 to to you artalii mom-I- It, bag aubmtt niandallone aa to tha it mend men ta loth intaratate commerce law and certain con aidarattona arising our oparattona af tha anti-trulaw suggesting lha wisdom of federal Inmi potation of tndua- trial companies. , - bus1 ness of the court of dM not re jmre the service ti th to r tho jutltf Jtjrfjre to that court to the circuit to which they rjcf-nJfccfmnf, and It to should provide for payment time when the roraiwrif of al) s should be empowered tO toild sessions In different parts of the I'nitsi States If' found deatruMe; and Its orders and Judgments should be made Anal, subject only to review by the supreme court of the lniteiL States, with tne piovtslon that tha operation of tha dec ree appealed from shall not ba stayed unlesa tha court shall so order. The commerce court ahould be empowered tn Ite 4 restrain nr suspend the opera I Ion of an order of the Interstate commerce fommlaatnn under review' pending the Anal hearing and determination of tha proceeding, but no such restraining order ahould ba mads axcept upon to-tland after - hearing, unless In cases where Irreparable damage would otherA Judge wise ensue to the petitioner of that court might ba empowered to allow a stay of the commlaaton's order for A period of not more than 0 days, but pending application to the court of Re or order Injunction, then only where hts order shall contain a apeclAc Andtng bused upon evidence submitted to the Judge making tha order and Identified by reference thereto that such Irreparable daman would result to tha petitioner, specifying tha nature of the damage, Under the existing law, the Interstate commarca commission Itself Initiates and defends litigation In the court for-th- a snforcecmnt, or In tha defens of its .orders and decrees, and for thla purpose It employ attorney, jeho, while subject to. tha control of tha attorney general, art upon tha Initiative and under the Instructions of the commission. Thla blending of administrative, legislative and Judicial functions tenda. In my opinion, to Impair tha efficiency of the commission by clothing It with partisan characteristics and robbing it of tha Impartial Judicial attitude It should occupy In passing upon questions submitted to It. In my opinion all litigation affecting tha government should ha under the direct rontrol of the department TTfiCrTure ficuirmivud that ail proceed- Inga affecting orders and decree of th commission be Interstate commerceth United States brought by nr against an be In of eo nomine, and charge placed acting under assistant ettomev-genera- l the direction of th attorney general. IntsrstatS Commerce Law. In tha annual report of the intaratata commerce commtaalon for the year into, attention ta catted to tlia fait that between July ld. and the close of that jraar. It aulta had been begun to set aside ardors of tha commission (besides ona tom me need before that date), and that few orders af much consequence had 4lfttaa t to go without protest; that tha questions presented by these various suits were fundamental, aa the constitutionality Of the act Itself was In issue, and the right of congress to delegate to any tribunal authority to establish an Interstate rat was denied, but that perhaps tha moat serious practical gueetion raised concerned the extent of the right of tha courta to review the or- ders of the coni mission: and It was pointed out that If the contention of the carriers In thla latter respect clone were but little progress had been made In the Hepburn act toward th regulation of Interstate transportation charges. In 13 of the rases re-- f erred to it was slated, preliminary Injunctions wera prayed for. being granted in ala and refused In bis. "It haa from- thy- - ftrvt been welt under- stood,' says tha commission, "that lha success of tha present act aa a regulat- . tog measure depended largely upon the facility with which tcmp?rary Injunctions could be obtained. If a railroad 'company, by mere allegation In Its bill of complaint, support! by exparts , can overturn (ha result of days of patient Investigation, no very satisfactory result ran be expected. The railroad loses nothing by these proceedings since they fall. It can only ba required to iff'Ptiiiiiih lit tale amt gw yny is gWpjiwT the difference between the higher rale collected and the rate which is Anally held to ba reasonable, la point of fact It usually profits, because It can seldom be required to return more than a fraction of the excess Charges collected.! I Its report for the year ! the com- 'mission shows thst.ofthw.Uea re- -. . ferred to In Ua IMS report, only ona had been decided In tha supreme court of tha United States, although five other cases bad been argued, and submitted to that tribunal In Ot tuber, tba, Of course, every carrier affected by an order of the commission has a constitutional right to appeal to a federal court to protect It from the enforcement of an order --which It may show to be prims- fart conflscetnry or'tthJtnrfTjr-aiai-riinlna' ' lory In It eltecti'end aa thla application may he mada to a court In any district of the United States, not only does delay In the enforcement of the order but great uncertainty ta caused by contrariety of decision. Tha queatlona presented by these applications are too often technical In their character and require a knowledge ef th business and .the mastery of-- agreet volume of conflicting evidence which is tedious to examine and troublesome to comprehend. . It would not be addi- tional amount aa la netraaary to bring their annuol compenaatlon up to lOuo Only Second to Supreme Court. Tha regular sessions of such court should be held at thn rnpltol, but It of-th- been permitted . LUa MV JumJl i&itfe. In the court of commune of audi st - Alt d, - affl-dai- i - Would Permit Agreements. the complcte control over and other practices of carriers established by th seta of congress, and as recommended In this 1 - see as why rommunlcetlen, agreemnts between carriers subject to th act. specifying th classtAcatlops of freight and th rales, fares and charges for trsneportatlqjy of pasBJ!Bert and. freight which they may agree,- ,to eatab-Hxshrmld permitted- proyldcdr copies Of such tree mnts be promptly Aled with the contmlxslon, but subject to all the provisions of the Interstate com- -' mere act, and subject--totright of to cancel It any parties to such ssreemnt -as to all or any of the agreed rates, fnres, charges, or cUssiAcattons by 30 dais' notc In writing to the other par-ti- e end to th commission, jnvlew of -' not--tie ult 1 - UmJ-'Tt- h 'existing Isw-th- e commts- - slon can only act with respect t an al leged excessive rate or unduly discriminatory practice by a perrlcr on b)T sofneIndTvMuaT aiferted' "any cor.' poratlon of the right to the review by thereby, I nee no reason why th coma court of any ooler or decreo which. mission should nol be authorized to act If undisturbed, would rob It of a reason! on its own tniitntlv as well as upoq th able return upon Its investment or would complaint, of an Individual in Investigatsubject It to burdens which would un- ing th fairnessI of any existing rate or rwommend the amendpractice; and justly discriminate against It and In favor of other.earrlers similarly situated. ment of the law to so provide, and also ' What la, however, .of supreme liupor! that ths commission slmll be fully .emtance Is that th decision of such ques- powered, bf)und any question, to pass tion shall be as xpeedv as the nature of upon the idasslflcatlons of commodities th circumstances will admit, and that tor purpose of Axing rat s. In like manit mav now do with respect to the a uniformity of decision he secured so ner to bring about an effective, ajxtem-all- c maximum rate applicable to any trans, and sclenttflc enforcement of th portation, commerce law, rather than conflicting deExisting Law Powerless, cisions and uncertainty of Anal result Under the' existing law the commission Court of Cemmsrcq.-Fo- r may not Ihvriltgat an Increase In rates Recommend this purpose I' recommend the until after It ahall become effcctlie; and on or more carriers may Al establishment of a court of the United although with th romntlaxlon a proposed Increase State composed of Ave Judges designated for such purpose from among the In rates or change tn claesiflcathms, or circuit Judges ef States, to other alteration of the ex sting rates or be known as th "United States court class! Arsttona. 10to become effeclti at the hdays from such'lllng, no court shall be expiration of of commerce." whl proceeding can be taken In Investigate clothed with exclusive original Jurisdiclb reasonableness of such proposed tion over the following elassea of cases: change until after It becomes operative. (1) All rases for tha enforcement, than by adjudication and collec- On th other hand. If th commission shall make an order flmimg that an extion. of a forfeiture or penalty, or by Infliction of criminal punishment, of any isting rale is excessive, and directing It to be reduced, the carrier affected may order of the Interstate commerce ether than tof the payment of by proceedings In Ih courta slay th . operation of such" order of reduction for .money, and even years, it has, there-for- e. tit) AU caaea brought to enjoin, set months,heen Suggested thsi the eommls-slo- n aside, annul or suspend any order or should be empoSV- - fd whenever a requirement of the 'Interstate commerce In rates a filed. At Inrrease proposed commission. tJ) All such eases as under eectlon t mice tn enter upon nn Investigation ef the reasonableness of the Increase, and of the act of February 13. W03, knows aa the "Elkins set." are authorised to .to make an order feietponlng the effec--b flSTe of QTh 'ThVreas maintained In a'rcuIFcVurt of ?h un(irTiHefr such Investigation shall be completed. To Unlted States. much thla been made on HI All such mandamus proceeedlngs .objection has ha under the provision of section ID or the part of carriers. They contend that S of th Interstate commerce this would be In effect to tak from th law are authorised to be maintained In a owners of th railroads th management of their properties and to clothe th Incircuit court of th United State. Reasons precisely analogous t thnee terstate commerce commission with th g to crest Induced which tbs original the congress power a policy which was much discussed at th time Court of customs appeals by th provides tn th tariff act of August L 1901. of th passage of th Hepburn act In 1906 A, and which was then and haa alurged In support of th creation day be fcoramerM 'enurt.' ways 'heed dutinctly rejected andf tn re--' f the u sum(Aden t . In order to. provide a ply to th suggestion thst they ar able, her af Judges te enable this court to be by resorting to th courts, te stmy- - th constituted It will be necessary to autaking effect of th order of the comm lesion until its reasonablsneee shall have thorise tbs appointment of Are addibeen Investigated by th courts, wheretional circuit Judges, who, for the purdlstrlb-ted as. th people ar deprived of any such pose of appointment, might be ta at remedy with respect to action by th ta thee circuits where ther volume ef th time carriers, they point to th provlsons of largest the present aa th the Interstate commerce act providing tor second, third, fourth, such gustBees seventh and eighth circuits. Th act restitution to th shippers by carriers, of should empower th chief Justice at say axessatv rates charged ta cases where -- i 1 the-Unit- oth-rsrl- se ' 5 com-mias- - a rate-makin- t'I Mr e'VJ '"" ""' - Anil-Tru- st -- -- . etc.,-whe- -- anti-tru- of-vii- aTe st anl-tru- fur-th- over-issu- e a' prs-ve- nt -- th' ca-r- hr e. Lpr com-nle- te cV-th- st r- - thAHurru!i vsK - t- ANTI-TRUS- ' bw-on- ar V I . at with the boundaries of the country, no state prosecution Is able to supply tits reded mai hlnery for adequate restraint ' TT JJunQ.1 ment, The supreme court In several of its ih has. d lined to read into the 'elute the wont "unreasonable before "restraint of trade, on I he ground that rfie statute appUea-jna- l real ramta and loe not Inti ml to leave the court th discretion to determine what is a reasonable restraint bf trade The expre-vsio"restralnt-otrade" coines from the common law, and at tommon law there were certain coxcnqnl incidental to the out of ja main or principal contract 'hlch were suurTo be Covenant-I- n rcetrqlnt ot trade, and acre held tigrtial to be enforclble because "reasonably adopted to the prformance of the main or primipal contract, and onder the general contrat t. .and under the general court in language used by the supr-It would seem that even several c suv h lm t ( OvotianU In restraint of Intersfu.e trade were aithln the Inhibition of the statute and must be nrh rnrpomfMfr to fl full plfie r ports u; their operutiun iiul'jiXUuciil f car-rvi- ng jk states. To the suggestion thallhl proposal of federal Incorporation for Industrial eom In order to avoid sueh a result. I have thought and said that It might be well to amend the statute so as to exclude sues Covenants from Its condemnation. A close examination of the later decisions of the court, however, shows quite clearly in caws prem ntlrig the exact question. .that such Incidental restraints of Ttrade are held hot to Ite within the law and are excluded by the general statement that,- - to be wLthin the statute, the effect upon the trade of the restraint must be direct and not merely Incidental or Indirect. The necessity, therefore, for, an amendment of the statute so as to exclude these incidental and bene-flctcovenants In restraint ot trade held In common law to be reasonable, does not exist. . JnT some of the opinions sS the federal, circuit judge' there have been intimations, having the effect, If sound, to weaken the force of the statute by InIt within cluding absurdly unimportant combinations and arrangements, and sugwisdom of changthe therefore, gesting, ing It language by limiting Its 'application p. serious combinations with intent to restrain competition or control prices. A reading of the opinions of' the court, makes the however, supreme exclude change unnecessary, for they from the operation of the act contracts affecting Interstate trade In but a small and Incidental way, and apply the statute only to th real evil aimed at by congress. -The statute-ha- s been on the statute book now for two decades, and tha suIn mors court than a doxeir opinpreme ions has construed It tn application to various phases of business combinations and in reference to various subject matter. It has applied It to the union under one rontrol of two competing Interstate railroads, to private manufacturers ' engaged In a plain attempt to control prices aqd suppress competition In a part of the country. Including a dozen states, nr to muny other combination affecting Interstate trade. The value of a statute which ia rendered more and more certain In Its meaning by a series of decisions of tha supreme court furnishes a strong reason for leaving the act as It ia, to accomplish Its useful purpose, Vven though If It were being newly enacted, useful suggestions as to change of phrase might be made. binations Is intendfn to furnish them ft refuge In which to cdhlitfuft- industrial It business under federal protection. ahould be said that the measure content tha Sherman antiplated does a trust law and is not to be framed to permit the doing of the wrongs which tt Is the purpose of that law to prevent, but only to foster a continuance and advance of the highest industrial efficiency without permuting industrial abuses. Sure to Meet Opposition. 8uch ft national incorporation law will be opposed, first, by those who believe that trusts should be completely broken wul up and their Vroperty destroyed. Itdoubtwte In- -,, be pp by those- federal Of such the constitutionality corporation and even if tt is valid, object to it as too great federal centralisation. who It will be opposed, third, by thoseIncorwill Insist that a mere voluntary It to poration like this will not attract assistance the worst of the offender al - otatute and whq against the aim-truwill therefore propose tpstead of it. a system ot compulsory licenses for all federal corporations engaged In Interstate st busine Let UH.t imstder these objections In their order. 1 he government Is now trying to dissolve vMiie t)f these combinations and It ta not the intention of the government to 4eaist in the least degree in Uaareeffort toto end these combinations which of this day monopolising the commerce that country; that where It appears and concentration of property go to the extent of creating a monopoly of substantially and directly restraining Interstate commerce, it la not the Intention of the government to permit this incormonopoly to exist under federal transfer to the protecting poration or to federal of g government wing of the slate corporation now violating the Bherman act. But it U not. and should not be, the policy of the government to prevent reasonable concentration of capital which Is necessary to the economic development of manufacture, trade and commerce. Thla country haa shown power of economic production that has astonished the world, and has enabled us to compete with foreign manufacturers lo many markets It ahould be the care ot the itovemmettt"te permit euehcoacen?.. tratlon of capital while keeping open th and th avenues of -Individual enterprise, -opportunity- Tof A man or corparatlow T" to reasonable with engags Is capital t business. It we would maintain out ' present business supremacy, we should give to Industrial concerns an opportunity to organise or to concentrate theli legitimate capital In 4 federal corporation, and to carry on their large buslneas within the lines ot th law. May Doubt Constitutionality. busl-ww- 1 st law to make a distinction under which good combinations may be permitted to organize, suppress competition, control prices, and do It all legally it orvlv they do not abuse the iower by taking too great proflt out at the business. They point with force to certain (notorious trusts as having grown into power through criminal methods by fh tw of Illegal rebates and plain cheating, and by various act utterly violative of business honesty or morality, and urgtr the 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 buslnesa. Now, the public, and especially the business Second There are those who doubth constitutionality of such federal Incorporation. The regulation of interstate and foreign commerce ts certainly conferred In the fullest measure upon congress, and If for the purpose of securing tn the most thorough manner that kind of regulation,, congress shall Insist that It may provide and authorize agencies to carry on that commerce. It would seem to be within its with respect to railroad companies doing an Interstate business and Interstate bridges. The power of Incorporation haa been exercised by congress and upheld hv th supreme court In this regard. Why, then, with respect to any otbei form of Interstate commerce like th tale of goods across state boundaries and Into foreign fluntrlfi may Jhe aamo pgwe, not be asserted? Indeed, It Is the very fact "that they carry" on lnterstate com--- " merce that makes these great industrial concerns subject to federal prosecution and control. How Tar aa incidental to the carrying on of that commerce tt may be within the power of the federal government to authorise the manufacturer of goodx. is perhaps mor open to discussion, though a recent decision of th supreme court would seem to answer that question ln 4he affirmative. Even those feho are willing to conceds that the supreme court max sustain, such. federal Incorporation are Inclined to oppose tt on the ground of Its" tendency to the- enlargement of the federal power at the expense of the power of ths state. It Is , sufficient answer to this argument to say that ho other method ran be suggested which offers federal protection on the one hand and close federal supervt-alo- n on The other of- - these great organ!- xatlons that are In. feet federal because thev are a wide as the country and are entirely unlimited In their buslneas by state lines Nor-l- s the centraIlzatIon-of-feder- al power under this act likely to be excessive. Only the largest rorporatione would avail themselves of such a law. because the burden of complete federal su- perviBlon and control That must certainly be Imposed to accomplish the purpose of the Incorporation would not be accepted bv an ordinary business concern. The third objection, thst the worst offenders will not federal Incorporation. Is easllv answered The decrees of Injunction recently adopted In prosecutions under the anti-trulaw are so thorough end sweeping that the corporations affected them have but three courses before them; First, thev must resolve themselves Into their component parts In the different states, with a consequent loss, to themselves of capital and effective organisation and to the country of, concentrated energy and enterprise; or second." of the law and under some In deflanc secret trust they must attempt to con- tlnu their business In violation of the federal statute, and thus Incur the penalties pf contempt and bring- on an Inevitable criminal prosecution of the Indt- itlAula..Damed t)ecrea and te.i. associates; or Third, they must reorganise and accept In good faith the federal charter I suggest a federal compulsory license law, urged as a substitute far a federal tncor! poratlon law. Is unnecessary except to reach that kind Of corporation which, by virtue of th consideration already ad- va need, will take advantage voluntarily of aa Incorporation law. while th other state corporations doing an Interstate business "do "not need to Supervision or the regulation of federal license and would only bo unnecessarily burdened idea that such a distinction Is practicable or can be Introduced Into the statute. trrtaJniy under th present anti-trutaw no auth distinction exist- - It has Iweo proposed, however, that the word "reasonable" should be made a part of the statute, and then It should be left to the cuurt" ta y what Is restraint of trade, w liatlx.qreasunahls. suppression of competition, what ls a reasonable monopoly I venture to thing that' this la to put into the hands bf the court a power Impossible, ro exarclse on any consistent principle which will Insure tl uniformity of decision essential to st judgment It Is to thrust upon the cmrrtg - burden that they have ho ptecedents to enable them to carry, and to glv e them a power approaching rhUem'rnv the abuse of whlch- - might nvohi our whole judicial system in disst aster. An Aid to Business Virtus. In considering violations of 'the antitrust law we ought, of course, not to forget that that law makes unlawful, methods of carrying on business which before Its passage were regarded as evidence of business sagacity and success, and that they were denounced In this act not because of their Intrinsic Immorality, but because of the dangerous results toward which thev tended, the concentration . of Industrial power in the hands ol the few. leading to oppres- sion and Injustice. In dealing, therefore, with many of the men who have used the methods condemned bv the statute for the purpose of maintaining a profitable business, we may well facilitate a change by them In the method, of doing buslnesa and enable them to bring it back Into the zone of lawfulness, without losing to the country the economy of management by whleh. tn our domestic trade the cost of production has been materially lessened, and in competition with foreign manufacturers our foreign trade has been greatly Increased.' Through all our consideration of this gTSV question, however, we must Insist that the suppression of competition, the controlling of prices, and the monopoly or attempt to monopolise In Interstate commerce and burlness are not only unlawful. but contrary to the public good, end that they must be restrained and punished until epded. Asks National Corporation Law. I therefore recofnmend the enactment by congress of a general taw providing "US formation pf corporation 4o, eru gage In trade and 'commerce' among the states and with foreign nations, protecting them from undue Interference by th state and regulating their activities so as to prevent th recurrence, under national auspice, of tho abuaes which have arisen under, stats control. Auch a law should provide for th Issue of stock of such corporations to an amount equal only to the cash paid' In on ths stock: and tf the stock be issued for air 4n tlow afer-talned peoperty.thsnat under approval and supervision of federal authority after a full and com plet disclosure of all th facta pertaining to th Tlu of such property and th Interest therein of tba persona to whom It ts proposed to Issue stock tn payment It should subject the of such property. real and personal property only of such corporations to th cam taxation aa Imposed by th state within which tt may b situated upon other similar property located therein, and It should require r v For Government Control, e great people conducting liavecberijfhed s hore .and g. be-- 1 that In some way or other a line tnnv he drawn between good trusts and "bad trusts, and that it ts possible by anti-tru- - at- - busmens throughout tbe United. State The conflicting lams of the different" states of the union with reapset to foreign corporation make It difficult. If not Impossible, for one corporation to Comply with their requirements so as lo carry on bustnese In number of different me amendment to the cmniffc Ufcor regular linen ala, .orparat:ons organ)! under thla art atimild l prohibited from inquiring amt bolding atm k In other cor poratlon s except for special reasons upon approval bjT'Tbe projer federal author ' UyL Thus avoiding the creation,, under national auspices, of the hoi Hiui com'" pany wHh subordinate, qorporanore tn such an .different states which fias effeve a?euy in the creation, of tiif. great trusts nd monopolies-Iact the prohibition of The anil-truIn re(rdnt of rnnhination against d. It trade is to be effectively enfn. '!' essential that the national government shalt provide fpr tha creation of national corporations to carry on a legitimate -- .Many & rom- YUb tho Jnlhe af thereby. J The attorney general, at my suggestion, baa drafted a federal Incorporation law, embodying th views 1 have attempted to set forth and It will be at th disposition of th appropriate committees ot . congress. I I WILLIAM The White Rouse. Jan. T. H. TAFT. lilt. ' A" - f |