" "S44-
AUGUST 2, 1913
The Commoner.
$r
The Stanley Committee Report
Following is a special dispatch in Louisville
Courier-Journal: Washington, July 22. Rep
resentative A. O. Stanley tonight gave the cor
respondent of the Courier-Journal the full text
of the three important bills which tho demo
cratic members of the Stanley steel committee
today Anally decided to recommend for enact
- ment into law in order to remedy evils growing
out of the existence of the great industrial
trusts.
While the committee has based its report
largely upon its investigation of the steel trust,
Which lasted for more than a year, it has also
studied the government suits against the tobacco
trust and the Standard Oil company, and several
of the important provisions of the Stanley bills
are aimed directly at the tobacco trust.
Tho democratic members of the committee
met this morning and took their final vote.
Their report will be unanimous except for the
dissent of Representative Martin W. Littleton,
of New York, from the proposal of the other
four members to shift the "burden of proof"
from the government to the defendant corpora
tion In a suit under the Sherman law.
The text of none of these bills has ever been
printed. The Courier-Journal has published the
important sections, and the substance of each
measure.
LITTLETON'S VIEWS
Mr. Littleton was authorized by the other
democratic members of the committee this after
noon to file along with the report a statement
of his views in favor of adhering to the practice
of requiring the government or any other com
plainant under the Sherman law, to prove "un
reasonableness" of restraint of trade. He thinks
that to make tho defendant prove "reasonable
ness," thus shifting the burden of proof, would
be revolutionary as a legal proposition.
Judson C. Clements, of the interstate com
merce commission, at the request of Mr.
Stanley, revised the two highly important
committee bills to break up the system of
"interlocking directorates"' and to divorce in
dustrial corporatipns engaged in interstate busi
ness from transportation lines. While Mr. Cle
ments has not given his official approval of these
bills, ho has written to Mr. Stanley telling him
that he believes they aro a long step in tho
direction of remedying trust evils.
STANLEY AMENDMENTS
Here are the -important sections of the Stan
ley committee bill amending the Sherman law:
"Section 10. Any person who shall be in
jured in his business or property, or shall be
threatened with such injury, by any other per
son or corporation by Teason of anything for-
bidden or declared to be unlawful by this act,
may bring suit in equity in any circuit court of
the United States in the district in which the
defendant resides or is found, to prevent and
restrain violations of this act and for other
appropriate relief.
"Section 11. Whenever suit has been in
stituted under Section 4 of this act any person
who shall be injured in his business or property,
or threatened with such injury, by the defen
dants in said suit or any of them by reason of
anything forbidden or declared to be unlawful
in this act, and any state of the United
States, may at any time intervene in said suit
to protect his interests, or, if the intervenor
be a state, the interests of the citizens of such
state and any person interested or any state
may after final decree in said suit petition said
court for protection or redress in case of any
violation of said decree, and tho court shall
have power to take such action as may be ap
propriate in the premises.
BURDEN OF PROOF
"Section 12. Whenever in any suit it shall
appear that any combination was entered into,
existed- or exists, which was or is in restraint
of trade, the burden of proof to establish tho
reasonableness of such restraint shall be upon
the party who contends that such restraint is
reasonable.
"Section, 13. Whenever in any suit it shall
appear that any combination was entered into,
existed, or exists, which was or is In restraint
of trade, such restraint shall be conclusively
deemed to have been, and to have been un
reasonable and in violation of the provisions of
this act as to any party thereto who is carrying
on any business to which ouch combination re
lates or !n connection therewith:
"(a) If such person does business, directly
or Indirectly, under any- name other than his
own or that of tho partnership of which he Is
a member; or any corporation does business
under any name other than its own corporato
name; or if there bo any concealment or mis
representation as to tho ownership or control of
such business; or if there bo any misrepresen
tation as to the identity of the manufacturer,
producer or vendor of any article sold.
"(b) As the vendor of any article spies upon
tho business of any competitor or secures In
formation concerning his business either through
bribery of an agent or employe of such com
petitor, or if any stato or federal official, or by
any Illegal means whatsoever secured informa
tion concerning tho competitor's business.
UNLAWFUL RESTRAINT
"(c) As tho vendor of any article attempts
to prevent or restrain competition by supplying
or offering to supply such article without chargo,
or at a price at or below cost of production and
distribution.
"(d) As tho vendor of any article with a
view to preventing competition with the samo
fixes upon some raw or manufactured material
which he controls and which is required for pro
ducing a competitive article an unreasonably
high price.
"(e) As tho vendor of any article attempts
to prevent or restrain competition by any con
tract or arrangement under which he shall not
Bell any article in which ho deals to certain
persons or classes of persons, or to thoso doing
business within certain districts or territories.
"(f) As tho vendor of any article attempts
to prevent or restrain competition by supplying
or offering to supply to any person doing busi
ness in any particular territory articles sold by
him upon terms or conditions in any respect
more favorable than are accorded by him to his
other customers.
"(g) As the vendor of any article attempts
to prevent or restrain competition either by
refusing to supply to any other person request
ing the same any article sold, or by consenting
to supply same only upon- terms or conditions
in some respects less favorable than are ac
corded to any other person.
"(h) As tho vendor of any article attempts
to prevent or restrain competition by making In
the price or other terms of any such sale any
discrimination based upon whether the vendee
purchases from him articles of a particular
quantity or aggregate price.
JURISDICTION
"Section 19. Whenever in any proceeding
under section 4 of this act any combination has
been adjudged illegal under section 1 and sec
tion 2 of this act the court before which such
proceedings are pending shall have jurisdiction:
"(a) To partition any property owned
under any contract or by any combination men
tioned in section 1 and section 2 of this act
severally among tho owners thereof, or groups
of owners thereof, and if the owners includ6 ono
or more corporations, among the several stock
holders thereof if among groups of the several
stockholders thereof all in proportion to their
respective interests.
"(b) If sales of such property aro necessary
or proper, either to pay debts or incumbrances
thereon, or to recreate conditions in harmony
with the law, to sell such property as a whole
or in parcels; and tho court may forbid tho said
owners, and if the said owners include ono or
more corporations tho stockholders thereof,
from purchasing at such sales, and may pre
scribe the conditions on which any purchase
may be made by any person whatsoever.
"(c) To make such restraining orders or
prohibitions as may be necessary and proper to
recreato conditions in harmony with- the law,
Including prohibitions of any acts, conduct,
methods or devices which aro enumerated herein
as indicating unreasonable restraint.
"(d) To declare void, as against the defen
dants or any of them any contract entered into
as a part of the combination found to be in re
straint of trade."
TOBACCO TRUST
In its discussion of Sections 13 and 19, which
aro aimed at tho tobacco trust, tho committee
says:
"Section 13. The purpose of this section is
to select various practices commonly pursued
by trusts which have proved particularly oppres
sive and to stipulate that when they are In
dulged in by a combination to restrain trado tho
combination shall be considered conclusively un
reasonable and therefore illegal. It seemed best
to adopt this form of securing prohibition in
order to leave Intact tho present Sherman law
as interpreted by tho supremo court In tho
Standard Oil and tobacco cases. Practically
every ono of tho practices specifically enumer
ated as being conclusively unreasonable has boon
reviewed in one or moro of tho trust caseif aa
strong ovidenco of its illegality, and has been
subject to genoral public condemnation.
"(a This clauso strikes at tho fake indepen
dents used by the tobacco trust with such dis
astrous effect to tho real independents.
"(b; This section deals with tho practiro
pursued so effectively by tho Tobacco trust and
Standard Oil trust of crushing Independents
through bribing Independents' employes and
otherwlso Illegally obtaining business secrets.
"(c) This deals with tho practlco of price
cutting usod with such disastrous effect by thi
Tobacco trust nnd tho Standard Oil trust as
against particular competitors in particular
districts.
"(d) This deals with tho practlco so effec
tively used by tho Tobacco trust when it con
trolled licorice paste, and which, of courso tho
3teel trust would bo in a strong position to uso
with respect to iron ores nnd its crude manu
facturers. "(e) This also deals with practice of tho
tobacco and other trusts of discriminating iu
favor of their 'loyal' customers as against thoso
vho have dared to deal with competitors.
"(f) This also donls with forms of discrimi
nation as exorcised by tho tobacco trust and tho
Standard Oil trust which have uroven so disas
trous to tho Independents.
"(g) This is designed to meet still another
form of discrimination practiced by the tobacco
trust and others.
"(h) This Is designed to meet practices Hko
those usod by tho tobacco trust which practically
destroy competition by means of skillfully de
vised quantity discounts. Tho company would
ascertain what the annual purchases of a dealer
wore and then fix tho quantity required for tho
discount at an amount approximately that of
the total sales of the dealer."
REAL DISSOLUTION
"Section 19. Tho provisions of this section
are designed to make clear tho power of tho
court to bring about a real dissolution of the
trusts and to avoid such shams as the alleged
disintegration in tho tobacco trust and Standard
OH cases. That disintegration shows clearly
how Inadequate tho present legal machinery as
administered by the court is, although tho
powers wero doubtless broader than tho circuit
judges who passed upon tho tobacco case as
sumed. "The tobacco trust was declarod to be Illegal
on admitted facts. It was so declared by unani
mous court. Tho plan of disintegration adopted
divided most of the properties among three cor
porations, tho three coroprations to be owned
by the samo persons, in the same proportions,
and necessarily controlled by the same people.
The Independents contended that tho trust's
property should be distributed among different
sets of individuals, and that provision should bo
made so that the segments into which the trust
was divided should be separately owned. Tho
circuit judges appeared to think that they had
no power to require such an absolute separa
tion of the interests of those who formerly had
been used in an unlawful combination. Clauso
(a) is designed to grant tho power to make a
complete separation, if such power does not
already exist, and If It does exist to intimate
that tho exorcise of such power which Is essen
tial to a complete disintegration and to the
restoration of competitive conditions may ap
propriately bo exercised.
PLAN OF ADJUSTMENT
"The circuit judges in the tobacco case also
assumed apparently that unless they could se
cure tho consent of the defendants to the plan
of disintegration the court had neither authority
nor power to carry out any plan of adjustment;
that is, that they must secure in some form tho
consent of the holders in bonds and stocks of the
defendant company. Tho court assumed that
In the absence of such consent the only resource
would bo to soil the property at receiver's sale,
and that at such sale the defendants or any
other person could buy the property without re
striction. "Clause (b) is designed to make clear that
the court has power on final decree to sell tho
property and in selling it to prescribe the con
ditions upon which the purchaser shall hold it.
Including, among other things, provision for
bidding tho defendants themselves, or if tho de
(Contlnued on Pago 10.)
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