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About The Loup City northwestern. (Loup City, Neb.) 189?-1917 | View Entire Issue (Jan. 13, 1910)
PRESIDENT SENDS SPECIAL MESSAGE Makes Recommendations as to Com merce Law and the Trusts . WOULD CONSTITUTE A SPECIAL COURT Judges to Have Power to Act in Certain Specified Cases — Wisdom of Federal Incorporation of Indus trial Companies Suggested—Scope of Present LawToa Wide ■ W a Ellington. Jan. 7.—The following is President Taft's message to congress on the subject of needed legislation re garding the interstate commerce law and the control of the trusts: To tile Senate and House of Represent atives: I withheld from my annual mes sage a discussion of needed legislation under the authority which congress lias to regulate commerce between ttie states and with foreign countries, and said that 1 would bring this subject-matter" to your attention later in the session. According ly, I beg to submit to you certain recom mendations as to the amendments to the Interstate commerce law and certain con siderations arising out of the operations of the anti-trust law suggesting the wis dom of federal incorporation of indus trial companies. Interstate Commerce Law. In the annual report of the interstate commerce commission for the year 1908. attention is called to the fact that be tween July 1. 2908. and the close of that year. 16 suits had been begun to set aside orders of the commission (besides one commenced before that date), and that few orders of much consequence had been permitted to go without protest; that the questions presented by these va rious suits were fundamental, as the con stitutionality of the act itself was in is sue. and the right of congress to dele gate to any tribunal authority to estab lish an Interstate rate was denied; but that perhaps the most serious practical question raised concerned the extent of the right of the courts to review the or ders of the commission: and it was point ed out that if the contention of the car riers in tills latter respect alone were sus tained, but little progress had been made in the Hepburn act toward the ef fective regulation of interstate transpor tation charges.' In 12 of the cases re ferred to, it was stated, preliminary In junctions were prayed for, being granted in six and refused in six. "It lias from the first been well under stood." says the commission, "that the suet ess of the present act as a regulat ing measure depended largely upon the facility with which temporary injunc tions could be obtained. If a railroad ■company, by mere allegation in its bill of complaint, supported by exparte affi davits, can overturn the result of days of patient investigation, no very satisfac tory result can be expected. The railroad loses nothing by these proceedings since if they fall, it can only be required to establish the rate and to pay to shippers the difference between the higher rate collected and the rate which is finally held to be reasonable. In point of fact it usually profits, because tt can seldom be required to return more than a frac tion of the excess charges collected.” In its report for the year 1909 the com mission shows that of the 17 cases re ferred to in its 190S report, only one had been decided in the supreme court of the United States, although five other cases bail been argued, and submitted to that tribunal in October. 1909. Of course, every carrier affected by an order of the commission has a constitu tional right to appeal to a federal court to protect it from the enforcement of an order which it may show to be prima fa. ie confiscatory or unjustly discrimina tory in its effect; and as tills application may be made to a court in any district of the United States, not only does delay result in the enforcement of the order, but great uncertainty is caused by con trariety ot decision. The questions presented by these ap pll at.ons are too often technical in their i haracter and require a knowledge of the business and the mastery of a great volume of conflicting evidence which is tedious to examine and trou blesome to comprehend. It would not be proper to attempt to deprive any cor poration of the right to the review by a court of any order or decree which, if undisturbed, would rob It of a reason able return upon its investment or would subject it to burdens which would un justly discriminate against it and In fa vor of other carriers similarly situated. What is, however, of supreme impor tance is that the derision of such ques tions shall be as speedy as the nature of the circumstances will admit, and that a uniformity of decision be secured so as to bring about an effective, system atic and scientific enforcement of the commerce law, rather than conflicting de cisions and uncertainty of final result. time when the business of the court of commerce does not require the services of all the judges to reassign the judges designated to that court to the circuits to which they respectively belong; and it should also provide for payment to such judges while sitting by assignment in the court of commerce of such addi tional amount as is necessary to bring their annuol compensation up to $10,000. Only Second to Supreme Court. The regular sessions of such court should be held at the capitol, but it should be empowered to hold sessions in different parts of the United States if found desirable; and its orders and judg ments should be made final, subject only to review by Che supreme court of the United States, with the provision that the operation of the decree appealed from shall not he stayed unless the su preme court shall so order. The com merce court should be empowered in its discretion to restrain or suspend the op eration of an order of the Interstate com merce commission under review pending the final hearing and determination of the proceeding, but no such restraining order should be made except upon no tice and after hearing, unless In cases where irreparable damage would other wise ensue to the petitioner. A judge of that court might be empowered to al low a stay of the commission's order for a period of not more than 60 days, hut pending application to the court of its order or injunction, then only where his order shall contain a specific finding based upon evidence submitted to the judge making the order and identified by reference thereto that such irreparable damage would result to the petitioner, specifying the nature of the damage. Under the existing law, the Interstate commerce commission itself initiates and defends litigation In the courts for the enforceemnt, or in the defense of its 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 instruc tions of the commission. This blending of administrative, legislative and judi cial functions tends, in my opinion, to impair the efficiency of the commission by clothing it with partisan characteris tics and robbing it of the impartial judi cial attitude it should occupy in pass ing upon questions submitted to it. In my opinion all litigation affecting the government should be under the direct control of the department of Justice; and I therefore recommend that all proceed ings affecting orders and decrees of the interstate commerce commission be brought by or against the United States eo nomine, and be placed in charge of an assistant attorney-general acting under the direction of the attorney general. Would Permit Agreements. In view of the complete control over rate-making, and other practices of in terstate carriers established by the acts of congress, and as recommended in this communication. I see no reason why agreemnts between carriers subject to the act, specifying the classifications of freight and the rates, fares and charges for transportation of passengers and freight which they may agree to estab lish. should not be permitted, provided, copies of such agreemnts be promptly filed with the commission, but subject to all the provisions of the interstate com merce act, and subject to the right of any parties to such agreemnt to cancel it as to all or any of the agreed rates, fares, charges, or classifications by 30 days’ notice in writing to the other par ties and to the commission. Under the existing law the commis sion can only act with respect to an al leged excessive rate or unduly discrimin atory practice by a carrier on a com plaint made by some individual affected thereby. I see no reason why the com mission should not be authorized to act on its own initiative as well as upon the complaint of an individual in investigat ing the fairness of any existing rate or practice; and I recommend the amend ment of the law to so provide; and also that the commission shall be fully em powered, beyond any question, to pass upon the classifications of commodities for purpose of fixing rates, in like man ner as it may now do with respect to the maximum rate applicable to any trans portation. Existing Law Powerless. Under the existing law the commission may not investigate an increase in rates until after it shall become effective; and although one or more carriers may file with the commission a proposed increase in rates or change in classifications, or other alteration of the existing rates or classifications, to become effective at the expiration of 30 days from such filing, no proceeding can be taken to investigate the reasonableness of such proposed change until after it becomes operative. On the other hand, if tile commission shall make an order finding that an ex isting rate is excessive, and directing it to be reduced, the carrier affected may by proceedings In the courts, stay the operation of such order of reduction for months, and even years. It has, there fore. been suggested that the commis sion should be empowered whenever a proposed increase in rates is filed, at once to enter upon an investigation of the reasonableness of the increase, and to make an order postponing the effec tive date of such increase until after such investigation shall be completed. To this much objection lias been made on the part of carriers. They contend that this would be in effect to take from the owners of the railroads the management of their properties and to clothe the In terstate commerce commission with the original rate-making power—a policy which was much discussed at the time of the passage of the Hepburn act in 1905-6. and which was then and has al ways been distinctly rejected; and In re ply to the suggestion that they are able, by resorting to the courts, to stay the taking effect of the order of the commis sion until its reasonableness shall have been Investigated by the eourts, where as. ti c people are deprived of any such rented v with respect to action by the earr'< i s. they point to the provisons of the i:i irstate eommerce act providing for resifi non to the shippers by carriers, of excessive rates charged in cases where Recommends Court of Commerce.” For this purpose I recommend the establishment of a court of the United k, States composed of five judges desig nated for such purpose from among the circuit judges of the United States, to be known as the "United States court of commerce,” which court shall be clothed with exclusive original Jurisdic tion over the following classes of cases: (1) Ail cases for the enforcement, oth erwise than by adjudication and collec tion. of a forfeiture or penalty, or by in fliction of criminal punishment, of any order of the interstate commerce com mission other than for the 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 cases as under section 3 bf the act of February 19, 1903. known is the “Elkins act.” are authorized to be maintained in a circuit court of the United States. H> All such mandamus proceeedings is under the provisions of section 20 or section 23 of the interstate commerce !sw are authorized to be maintained in a circuit court of the United States. Reasons precisely analogous to those which induced the congress to create the court of customs appeals by the provi lion* in the tariff act of August 5. 1909. ■nay be urged in support of the creation of the commerce court. In order to provide a sufficient num ber of Judges to enable this court to be constituted it will be necessary to au thorize the appointment of five addi tional circuit Judges, who. for the pur poses of appointment, might be distrib uted to thekd circuits where there is at the present time the largest volume of business such as the second, third, fourth, seventh and eighth circuits. The act should empower the chief Justice at any LAST OF THE YEW TREES Small Tract in the Bavarian High lands of Germany Is a Good Deal of a Curiosity. A b;t of primeval yew forest is still to be found in the Bavarian highlands of Germany. This tree, whose wood was so eagerly sought in the days when the cross-bow was still a dan gerous weapon of warfare, was in the middle ages widely distributed over Germany, but is to-day almost extinct, and even most German foresters know It only as a very rare tree, individual specimens of which are here and there preserved. There is, however, a tiny yew woodland still in existence in the Bavarian mountains near the village of Paterzell, and not far from the royal city of Munich itself. It covers an area of not much more than half a mile square. Here along the peaty shores of the dried out lake of Zell grow the last of the yew trees. It is primeval forest land, and ac the order of the commission reducing such rates are affirmed. It may be doubt ed how effective this remedy really is. Experience has shown that many, per haps most shippers do not resort to pro ceedings to recover the excessive rates which they may have been required to pay, for the simple reason that they have added the rates paid to the cost of the goods, and thus enhanced the price there of to their customers, and that the public has in effect paid the bill. On the other hand, the enormous volume of transpor tation charges, the grpat number of sep arate tariffs filed annually with the in terstate commerce commission, amount ing to almost 200,000, and the impossibil ity of any commission supervising the making of tariffs in advance of their be coming effective on every transportation line within the United States to the ex tent that would be necessary if their ac tive concurrence were required In the ma king of every tariff, has satisfied me that this power, if granted, should he con ferred in a very limited and restricted form. Commission Should Probe Change. I therefore recommend that the inter state commerce commission be empow ered whenever any proposed increase of rates is filed, at once, either on com plaint or of its own motion, to enter upon an investigation into the reasonable ness of such change, and that it be fur ther empowered, in its discretion, to postpone the effective date of such pro posed increase for a period not exceed ing 60 days beyond the date when such rate would take effect. If within this time it shall determine that such in crease is unreasonable, it may then, by its order, either forbid tile increase at all, or fix tlie maximum beyond which it shad not be made. If. on the other hand, at the expiration of tins time, the commission shall not have completed Its investigation, then the rates shall take effect precisely as it would under the ex isting law. and the commission may con tinue its investigation with such results as might be realized under the law as it now stands The claim is very earnestly advanced by some large associations of shippers that shippers of freight should bfe em powered to direct the route over which their shipments should pass to destina tion. and in this connection it has been urged that the provisions of section 15 of the interstate commerce act, which now empowers the commission, after hearing on complaint, to establish through routes and maximum joint rates to be charged, etc., when no reasonable or satisfactory through route shall have been already established, be amended so as to empower the commission to take such nction. even when one existing rea sonable and satisfactory route already exists, if it be possible, to establish ad ditional routes. This seems to me to be a reasonable proposition. The Republican platform of 1908 de clared in favor of amending the inter state commerce law, but so as always to maintain the principle of competition be tween naturally competing lines, and avoiding the common control of such lines by any means whatever. One of the most potent means of exercising such control lias been through the holding of stork of one riilroad company by an other company owning a competing line. This condition has grown up under ex press legislative power conferred by the laws of many states, and to attempt now to suddenly reverse that policy so far as it affects the ownership of stocks here tofore so acquired, would bo to inflict grievous injury, not only upon the cor porations affected but upon a large body of the investment holding public. Plan to End Rail Combine. I, however, recommend that the latv shall be amended so as to provide that from and after the date of its passage no railroad company subject to the Inter state commerce act shall, directly or In directly, acquire any interests of any kind in capital stock or purchase or lease any railroad of any other corpora tion which competes with it respecting business to which the interstate com merce act applies. But especially for the protection of the minority stockhold ers in securing to them the best market for (her stock, I recommend that such prohibition be coupled with a proviso that it shall not operate to prevent any corporation which, at the date of passage of such act, shall own not less than one half of the entire issued and outstanding capital stock of any other railroad com pany, from acquiring all or the remain der of such stock; nor to prohibit any railroad company which at the date of the enactment of the law Is operating a railroad of any other corporation under lease, executed of a term not less than 25 years, from acquiring the reversionary ownership of the demised railroad; but that such provisions shall not operate to authorize or validate the acquisition, through stock ownership or otherwise! of a competing line or interest therein in violation of the anti-trust or any other law. The Republican platform of 1908 fur ther declares in favor of such national legislation and supervision as will pre vent the future over-issue of stocks and bonds by interstate carriers, and In order to carry out its provisions 1 recommend the enactment of a law providing that no railroad corporation subject to the In terstate commerce act shall hereafter for any purpose connected with or relating to any part of its business governed by said act, issue any capital stock without previous or simultaneous payment to it of not less than the par value of such stock, or any bonds or other obligations (except notes maturing not more than one year from the date of their issue), without the previous or simultaneous pay ment to such corporation of not less than the par value of such bonds, or other ob ligations, or, if issued at less than their par value, then not without such pay ment of the reasonable market value of such bonds or obligations as ascertained by the interstate commerce commis sion; and that no property, service, or other thing than money, shall be taken in payment to such carrier cor poration, of the par or other required price of such stock, bond or other obliga tion, except the fair value of such prop erty, services or other thing ascertained by the commission; and that such act shall also contain provisions to prevent the abuse by the improvident or improp er issue of notes maturing at a period not exceeding 12 months from date, in such manner as to commit the commis sion to the approval of a larger amount of stpck or bonds in order to retire such notes than should legitimately have been retired. Such act should also provide for the approval by the interstate commerce com mission of the amount of stock and bonds to be Issued by any railroad company subject to this act upon any reorganiza tion. pursuant to judicial sale or other legal proceedings. In order to prevent the issue of stocks and bonds to an amount in excess of the fair value of the prop erty which is the subject of such reor ganization. By my direction the attorney general has drafted a bill to carry out these recommendatlons.i* which will be fur nished upon request to the appropriate committee whenever It may be desired. ANTI-TRUST LAW AND FEDERAL INCORPORATIONS Government Control of Big Industrial Corporations Favored—Asserts Scope of Present Law Is Too Wide. There lias been a marked tendency In business in this country for 40 years last past t y.vard combinations of capital and plant in manufacture, sale and trans cording to a recent count comprises 8+5 large and 1,456 small trees. The larger trees are at least 200 to 500 years old, and perhaps hundreds of years more. The smaller trees are all under 50 years. The largest of the trees at a height of four feet from the ground has a circumference of eight feet eight inches, and quite a number of them are more than six feet in cir cjmforenee and have heights varying from 50 to 60 feet. The larger trees are much damaged by storm and still more through the cutting away of the portatlon. The moving causes have been several: First, It has rendered possible great economy: second, by a union of former competitors It has reduced the probability of excessive competition; and, third, If the combination has been ex tensive enough, and certain methods in the treatment of competitors and cus tomers have been adopted, the combiners have secured a monopoly anil complete control of prices or rates. A combination successful In achieving complete control over a particular line of manufacture has frequently been called a "trust." I presume that the derivation of the word is to be explained by the fact that a usual method of carrying out the plan of the combination has been to put the capital and plants of various individ uals, firms, or corporations engaged In the same business under the control of trustees. The increase In the capital of a busi ness for the purpose of reducing the cost of production and effecting economy in the management has become as essen tial in modern progress as the change from the hand tool to the machine. When, therefore, we come to construe the object of congress in adopting the so-called "Sherman Anti-Trust Act” in 1S90, whereby in the first section every contract, combination in the form of a trust or otherwise, or conspiracy in re straint of interstate or foreign trade or commerce, is condemned as unlawful and made subject to indictment and restraint by injunction; and whereby in the sec ond section every monopoly or atterfipt to monopolize, and every combination or conspiracy with other persons to monopo lize any part of interstate trade or com merce, is denounced as illegal and made subject to similar punishment or re straint. we must infer that the evil aimed at was not the mere bigness of the en terprise, but it was the aggregation of capital and plants with the express or Implied intent to restrain interstate or foreign commerce, or to monopolize it in whole or in part. Trust Not Necessarily Bad. Monopoly destroys competition entire ly and the restraint of the full and free operation of competition has a tendency to restrain commerce and trade. A com bination of persons, formerly engaged in trade as partnerships or corporations or otherwise of course eliminates the com petition that existed between them; but the incidental ending of that competition is not to be regarded as necessarily a direct restraint of trade, unless of such an all-embracing character that the in tention and effect to restrain trade are apparent from the circumstances or are expressly declared to be the object of the combination. A mere incidental re straint of trade and competition is not within the inhibition of ttie act, but it is where the combination or conspiracy or contract is inevitably and directly a substantial constraint of competition, and so a restraint of trade, that the statute is violated. The second condition of the act is sup plement of the first. A direct restraint of trade such as is condemned in the first st ction.' if successful and used to suppress competition, is one of the com monest methods of securing a trade monopoly, condemned in the second section. It Is possible for the owners of a busi ness of manufacturing and selling useful articles of merchandise so to conduct their business as not to violate the in hibitions ef the anti-trust law and yet to secure to themselves the benefit of the economies of management and of produc tion due to the concentration under one control of large capital and many plants. If they use no other inducement titan the constant low price of their product and its good quality to attract custom, and their business is a profitable one, they violate no law'. If their actual competitors are small in comparison with the total capital invested, the prospect of new investments of capital by others in such a profitable business is sufficient ly near and potential to restrain them in the prices at which they sell their prod uct. But if they attempt by a use of their preponderating capital, and by a sale of their goods temporarily at unduly low prices, to drive out of business their competitors, or if they attempt, by ex clusive contracts with their patrons and threats of non-dealing, except upon such contracts or by other methods of a sim ilar character, to use the largeness of their resources and the extent of their output compared w'itii the total output as a means of compelling custom and frightening oil competition, then they disclose a purpose to restrain trade and to establish a monopoly, and violate the act. Law to Suppress Abuses. The object of the anti-trust law was to suppress the abuses of business of the kind described. It was not to interfere with a great volume of capital which, concentrated under one organization, re duced the cost of production and made its profit thereby, and took no advantage of Its size, by methods akin to duress, to stifle competition with it I wish to make this distinction as em phatic as possible, because I conceive that nothing could happen more destruc tive to the prosperity of this country than the loss of that great economy in produc tion which has been and will be effect ed in all manufacturing lines by the em ployment of large capital under one man agement. I do not mean to say that there is not a limit beyond which the economy of management by the enlarge ment of plant ceases; and where this happens and combination continues be yond this point, the very fact shows in tent to monopolize and not to economize. The original purpose of many combina tions of capital In this country was not confined to the legitimate and proper ob ject of reducing the cost of production. On the contrary, the history of most trades will show at times a feverish de sire to unite by purchase, combination, or otherwise, all the plants in the coun try engaged in the manufacture of a par ticular line of goods. The idea was rife that thereby a monopoly could be ef fected and a control of prices brought about which would inure to the profit of those engaged in the combination. The path of commerce is strew n with failures of such combinations. Their projectors found that the union of all plants did not prevent competition, especially where proper economy had not been pursued In the purchase and in the conduct of the business after the aggregation was com plete. There were enough, however, of such successful combinations to arouse the fears of good, patriotic men as to the result of a continuance of this movement toward the concentration in the hands of a few of the absolute control of the prices of all manufactured products. Refers to Sugar Trust case. The anti-trust statute was passed In 1890, nnd prosecutions were soon begun under It. In the case of the United States vs, Knight, known as the ‘‘sugar trust case," because of the narrow scope of the pleadings, the combination sought to be enjoined was held not to be Included within the prohibition of the act. because the averments did not go beyond the mere acquisition of manufacturing plants for the refining of sugar, and did not In clude that of a direct and intended re straint upon trade and commerce In the sale and delivery of sugar across state boundaries and in foreign trade. *f he result of the sugar trust case was not happy, in that It gave other companies and combinations seeking a similar meth od of making profit by establishing In absolute control and monopoly in a par ticular line of manufacture, a sense of immunity against prosecutions in the federal jurisdiction, and where that juris*;1 Mon is barred In respect to a business which is necessarily commensur young sprouts in the spring. These dark green needled branches are much sought for wreaths and for decoration. Fortunately, if it may be so put, the old-trees are ail more or less rotted and their wood thus rendered useless, for to this fact undoubtedly is due their preservation. A small part of the yew woodland belongs to the com munity of Paterzell, but by far the greater part is included in the state forest reserve. There is at present a movement on foot looking to the preservation of these rare trees. I ata with the boundaries of the country, no state prosecution Is able to supply the needed machinery for adequate restraint or punishment. The supreme court tn several of its decisions, has declined to read into the statute the word ‘‘unreasonable” before “restraint of trade,” ori the ground that the statute applies to all restraints and does not intend to leave the court the discretion to determine what Is a reason able restraint of trade. The expression "restraint of trade” comes from the com mon law, and at common law there were certain covenants incidental to the car rying out of a main or principal con tract which were said to be covenants in partial restraint of trade, and were held to be enforcible because “reasonably” adapted to the performance of the main or principal contract, and under the general contract, and under the genera! language used by the supreme court in several cases, it would seem that even such incid rntal covenants in restraint of interstate trade were within the in hibition of the statute and must be con demned. In order to avoid such a result, I have thought and said that it might be well to amend the statute so as to exclude such covenants from its condemnation. A close examination of the later decisions of the court, however, shows quite clear ' ly in cases presenting the exact ques tion, that such incidental restraints of trade are held not to be within the law and are excluded by the general state ment that, to be within the statute, the effect upon the trade of the restraint must he direct and not merely Inciden tal or Indirect. The necessity, therefore, for an amendment of the statute so as to exclude these incidental and bene ficial covenants in restraint of trade held in common law to be reasonable, does not exist. In some of the opinions of the federal circuit Judges, there have been intima tions, having the effect, if sound, to weaken the force of the statute by In cluding within it absurdly unimportant combinations and arrangements, and sug gesting, therefore, the wisdom of chang ing its language by limiting its appli cation to serious combinations with in tent to restrain competition or control prices. A reading of the opinions of the supreme court, however, makes the change unnecessary, for they exclude from the operation of the act contracts affecting Interstate trade in but a small and incidental way. and apply the stat ute only to the real evil aimed at by congress. me statute nas been on tne statute book now for two decades, and the su preme court in more than a dozen opin ions has construed it in application to various phases of business combinations and in reference to various subject mat ter. It has applied it to the union un der one control of two competing inter state railroads, to private manufacturers engaged in a plain attempt to control prices and suppress competition in a part of the country, including a dozen states, and to many other combinations affect ing interstate trade. The value of a statute which is rendered more and more certain in its meaning by a series of de cisions of the supreme court furnishes a strong reason for leaving the act as it is, to accomplish its useful purpose, even though if it were being newly en acted, useful suggestions as to ciiange of phrase might bo made. For Government Control. Many people conducting great busi nesses have cherished a hope and a be lief that in some way or other a line may be drawn between "good trusts” and "bad trusts,” and that it is possible by amendment to the anti-trust law to make a distinction under which good combina tions may be permitted to organize, sup press competition, control prices, and do it all legally if only they do not abuse the power by taking too great profit out of tlie 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 cheat ing, and by various acts utterly violative of business honesty or morality, and urge 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 business. Now, the public, and especially the business public, ought to rid themselves of the idea that such a distinction is practic able or can be introduced into the stat ute. Certainly under the present anti-trust law no such distinction exists. It has been proposed, however, that the word “reasonable” should be made a part of the statute, and then It should be left to the court to say what is a reasonable restraint of trade, what Is a reasonable suppression of competition, what is a rea sonable monopoly. I venture to think that this is to put into the hands of the court a power impossible to exercise on any consistent principle which will In sure the uniformity of decision essential to just judgment. It Is to thrust upon the courts a burden that they ha%-e no precedents to enable them to carry, and to give them a power approaching arbitration, the abuse of which might involve our whole judicial system in dis aster. An Aid to Business Virtue. In considering violations of the anti trust 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 evi dence of business sagacity and success, and that they were denounced in this act not because of their intrinsic immoral ity, but because of the dangerous re sults toward which they tended, the con centration of industrial power in the hands of the few, leading to oppres sion and injustice. In dealing, therefore, with many of the men who have used the methods condemned by the statute for the purpose of maintaining a profit able business, we may well facilitate a change by them in the method of doing business, and enable them to bring it back into the zone of lawfulness, with out losing to the country the economy of management by which, in 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 tills grave question, however, we must insist that the suppression of competition, the controlling of prices, and the monopoly or attrmpt to monopolize in interstate commerce and business are not only un lawful. but contrary to the public good, and that they must be restrained and punished until ended. Ask* National Corporation Law. I therefore recommend the enactment by congress of a general law providing for the formation of corporations to en gage in trade and commerce among the states and with foreign nations, protect ing them from undue interference by the states and regulating their activities so as to prevent the recurrence, under national auspices, of those abuses which have arisen under state control. Such a law should provide for the issue of stock of such corporations to an amount equal only to the cash paid in on the stock: and if the stork be issued for property, then at a fair valuation ascer tained under approval and supervision of federal authority after a rull and com plete disclosure of all the Tart* pertain ing to the value of such property and the interest therein of the persons to whom it is proposed to issue stock in payment of such property. It should subject the real and personal property only of such corporai'ors to the same taxation as im posed 1 y tile states within which it may be situated upon other similar property located therein, aod it should require Deep Drilling Unprofitable. The boring conducted by the Prus sian department of mines at Czuchow in Silesia had to be discontinued re cently upon reaching a depth of 2,240 meters in view of the fact that the cost of drilling at this depth in hard sandstone was out of proportion to the obtainable results. Like the boring at Paruschowitz in Silesia, which had to be abandoned at a depth of 2,000 meters on account of the drills breaking, the Czuchow bor ing was undertaken for scientific pur such corporations to file full and com plete reports of their operations with the department of commerce and labor at regular intervals. Corporations organized under this act should be prohibited from acquiring and holding stock in other cor porations (except for special reasons upon approval by the proper federal author ity), thus avoiding the creation, under national auspices, of the holding com pany with subordinate corporations in different states which has been such an effective agency in the creation of the great trusts and monopolies. If the prohibition of the anti-trust act against combinations in restraint of trade is to be effectively enforced, it is essential that the national government shall provide for the creation of national corporations to carry on a legitimate business throughout the United States. The conflicting laws of the different states of the union with respect to for- j eign corporations make it difficult, if not impossible, for one corporation to comply with their requirements so as to carry on business in a number of different states. To the suggestion that this proposal of federal incorporation for industrial com binations is intended to furnish them a refuge in which to continue industrial business under federal protection. It should be said that the measure contem plated does not repeal the Sherman anti trust law and is not to be framed so as to permit the doing of the wrongs which it is the purpose of that law to prevent, but only to foster a continuance and ad vance of the highest industrial efficiency without permitting industrial abuses. Sure to Meet Opposition. Such a national Incorporation law will be opposed, first, by those who believe that trusts should be completely broken up and their property destroyed. It will be opposed, second, by those who doubt the constitutionality of such federal in corporation and even if it is valid, object to it as too great federal centralization. It will be opposed, third, by those who will Insist that a mere voluntary incor poration like this will not attract to Its assistance the worst of the offenders against the anti-trust statute and who will therefore propose instead t>f it a sys tem of compulsory licenses for all fed eral corporations engaged in Interstate business. l,et us consider these objections in their order. The government is now trying to dissolve some of these combinations and it is not the intention of the government to desist in the least degree in its effort to end these combinations which are to day monopolizing the commerce of this country; that where it appears that the acquisition and concentration of property go to the extent of creating a monopoly of substantially and directly restraining interstate commerce, it is not the inten tion of the government to permit this monopoly to exist under federal incor poration or to transfer to the protecting wing of the federal government of a state corporation now violating the Sher man act. But it is not, and should not be, the policy of the government to pre vent reasonable concentration of capital which is necessary to the economic devel opment of manufacture, trade and com merce. This country has shown power of economic production that has aston ished the world, and has enabled us to compete with foreign manufacturers In many markets. It should be the care of the government to permit such concen tration of capital while keeping open the avenues of Individual enterprise, and the opportunity for a man cr corporation with reasonable capital to engage in business. If we would maintain out present business supremacy, we should give to industrial concerns an oppor tunity to organize or to concentrate their legitimate capital In a federal corpora tion. and to carry on their large business within the lines of the law. May Doubt Constitutionality. Second—There are those who doubt tha constitutionality of such federal incorpor ation. The regulation of interstate and foreign commerce is certainly conferred in the fullest measure upon congress, and if for the purpose of securing in 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 power, this has been distinctly affirmed with respect to railroad companies doing an interstate business and interstate bridges. The 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 countries, may the same power not be asserted? Indeed, it is the very fact that they carry on interstate com merce that makes these great industrial concerns subject to federal prosecution and control. How far as Incidental to the carrying on of that commerce it may be within the power of the federal gov ernment to authorize the manufacturer of goods, is perhaps more open to discus sion. though a recent decision of the su preme court would seem to answer that question in the affirmative. Even those who are willing to concede that the supreme court may sustain such federal incorporation are inclined to op pose it on the ground of its tendency to the enlargement of the federal power at the expense of the power of the state. It Is a sufficient answer to this argument to say that no other method can be sug gested which offers federal protection on the one hand and close federal supervi sion on the other of these great organi zations that are in fact federal because they are as wide as the country and are entirely unlimited in their business by state lines. Nor is the centralization of federal power under this act likely to be excessive. Only the largest corporations would avail themselves of such a law, be cause the burden of complete federal su pervision and control that must certainly be imposed to accomplish the purpose of the incorporation would not be accepted by an ordinary business concern. The third objection, that the worst offenders will not accept federal incorporation, is easily answered. The decrees of injunc tion recently adopted in prosecutions un der the anti-trust law are so thorough and sweeping that the corporations af fected \.y them have but three courses before them: First, they must resolve themselves Into their component parts in the differ ent states, with a consequent loss to themselves of capital and effective organ ization and to the country of concen trated energy and enterprise; or second, in dellance of the law and under some secret trust they must attempt to con tinue their business in violation of the federal statute, and thus incur the pen alties of contempt and bring on tn In evitable criminal prosecution of the indi viduals named In the decree and their associates; or Third, they must reorganize and accept in good faith the federal charter I sug gest a federal compulsory license law, urged as a substitute for a federal incor poration law. is unnecessary except to reacli that kind of corporation which, by virtue of the considerations already ad vanced. will take advantage voluntarily of an incorporation law. while the other state corporations doing an interstate business do not need the supervision or the regulation of federal license and would only be unnecessarily burdened thereby. The attorney general, at my suggestion, has drafted a federal incorporation law. embodying the views I have attempted to set forth and it will be at the disposi tion of the appropriate committees of congress. WILLIAM H. TAFT. The White House. Jan. 7, 1310. poses only, since mining operations are of course entirely impossible at this depth, if no account is taken of the rapidity with which the ex pense for hoisting increases with depth —Scientific American. Gifts to Columbia University. Within the period since the trustees of Columbia university held their reg ular meeting in June, the sum of $4, 281,502 has been received by the insti tution in gifts from various sources, chiefly in the form of bequests. _ COUNTRY AWAKE TO DANGEF Immense Amount of Money Spen' Last Year in Fight Against Tuberculosis. A report issued recently by the Xa tional Association for the Study unc Prevention of Tuberculosis shows tha' for the treatment of tuberculous pa tients in sanatoria and hospitals $5, 292,289.77 was expended during tht year 1909. The anti-tuberculosis asso ciations spent $975,8S9.56, the tubercu losis dispensaries and clinics $640,474, .64, and the various municipalities, foi special tuberculosis work, spent $1, 111,967.53. The anti-tuberculosis asso ciations distributed the most litera lure, spreading far and wide 8,400,001 copies of circulars, pamphlets anc printed matter for the purpose of edu eating the public about consumption The health departments of the differ ent cities also distributed more that 1,056,000 copies, which, with the wort done by state departments of health brings the number of pieces distribut ed during the year well over 10,000, 000. 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