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POWERSOF INTERSTATE (Continued from page 3.) approval .by the Interstate Commerce Commission of tlie amount of stock and bonds to be issued by any rail road company subject to this act up-been on any reorganization, pursuant to judicial sale or other legal proceedings in order to prevent the issue of stock and bonds to an amount in excess of the face value of the .property 'Which is the subject of such reorganiza tion. I believe these suggested modifica tions in and amendments to the in terstate commerce act would make it a (complete and effective measure for securing reasonableness of rates and fairness of practices in the operation of interstate railroad' lines, without undue preference to any individual or class over any others and would •prevent the recurrence of many of the practices which have given rise in the past to so much public in convenience and loss, By 'my decision the attorney gen eral 'has drafted a bill to carry out t'hesfe recommendations, which Will be furnished upon request to the ap propriate committee whenever it may be desired. Additional Powers of Commission. In addition to the foregoing amend ments of the interstate commerce law, the Interstate Commerce Commission should be given the .power, after a bearing, to determine upon the uni form construction of those appliances —such as sill steps, ladders, roof handholds, running boards, and band brakes on freight irars engaged in in terstate comtmerce—used by the train men in the operation of the trains, the defects and lack of uniformity in which are apt to produce accidents and injuries to railway trainmen. The wonderful reform effected in the num ber of switchmen and trainmen in jured by coupling accidents, due to the enforced introduction of safety couplers, is a demonstration of wbat can be done if railroads aire compell ed to adopt phroper safety appliances. The question has arisen in the op eration of the interstate commerce employer's liability act as to whether suit can be brought against the em ployer company in any place other than that of its home office. The •right to bring the suit urndjer this act should be as easy of enforcement as tlhe right of a private person not in the company's employ to sue on an ordinary claim, and process in such BURNHAM'S ANTIQUE BOOK STORE IMS-ltIO OM Swth MM0*t Hoaat •••wntnt, ••Stan, Mass. In Stock 4 0 0 0 0 0 Volumes Please write us regarding any book, old or new. Send for our FREE Catalogues of Curious, Rare and Standard Books in every department of literature. U. S E O S I O FIRST NATIONAL BANK suit should be sufficiently served If upon the station .agent of the company upon wtom service is authorized tc be made to bind the company in ordi nary actions arising under state laws. Bills for both the foregoing pur posies have been considered iby the house of representatives, and have passed, and! are now before tlhe Interstate Commerce Commission of the senate. I earnestly urge that they be en alcted into law. ANTI-TRUST LAW AND FEDERAL INCORPORATION. There has bean a marked tendency in business in this country for forty years last ipast, toward combination of capital and plant manufacture, sale and transportation. The moving causes have been several: First, ii has rendered possible great economy second, by a union of former compe titors it baa reduced the probability of excessive competition and, third, if the icombinatlon has been exten sive enough, 'and certain methods in the treatment of competitors and cus tomers have heen adopted, the com biners have secured a monopoly and complete control of iprices or rates. A combination successful in achiev ing complete icontrol over a particu lar line of manufacture has frequent ly 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 sami9 ibusiness under the con trol of trustees. The increase in the capital of a ibusiness for the 'purpose of reducing the cost of produlc-tion and effecting economy in the management has be come essential in modern progress as the change from the hand tool to the machine. When, therefore, wie come to iconstrue the object of con gress in adopting the so called "Sher man anti-trust act" in 18&0, .whereby in the first section every contract, icomlbination in the form of a trust or otherwise, or conspiracy in restrain.* of interstate or foreign trade or com merce, is condemned 'as unlawful and made subject to indictment and re straint by injunction whereby in the second section every monopoly or at tempt to monopolize, and every com bination or conspiracy with other per sons to monopolize any part of inter state trade or commence, is denounc ed as illegal and made subject to siim lia.r punishment or restraint, we must infer that the evil aimed at was not the mere bigness of the enterprise, but it was the aggregation of capital and plants with the express or im plied intent to restrain interstate or foreign commerce, or to monopolize it in whole or in part. [Monopoly destroys competition ut terly, and the restraint of the full and H, LITTLE, President. F. D. KENDRICK, Vie* I rest. J. L. BELL, Cashier H. M. WEISEU. Assistant Cashier. I S A N D. Established In I87t Capital and Surplus $130,000.00 Genera Bankin Business a a O A N S A E O N A A N S S a Deposi Boxes for YOUWONT HAVE TO ASK AjjK fpyOR YOU/V HAVd CASH MARSHALL FIELD clerked in a store when he was a boy. He put in the bank enough out of his salary to start a small business of his own. Today his establishment is the finest in the world. His two grandsons will get 400 millions each when they are given their share of the estate. We will pay you interest on the money you put in our bank and compound the Interest every six months. free operation of competition has a tendency to restrain commerce and trade. A combination of ipersons, formerly engaged in trade as part nershitpe or corporations or otherwise. of course eliminates the (competition that existed between them but the Incidental ending of that competition is not to be regarded as necessarily a direct* restraint of trade, un less of such an embracing character that the intention and effect to re strain trade are apparent from the circumstances, or are expressly de clared to be the object of the combi nation. A mere incidental restraint of trade and competition is not with in the inhabition of the act but it is where the combination or conspiracy of contract is inevitably and directly a substantial restraint of comipetition and so a restraint of trade that the statute is violated. The second section of the act is supplement to the first. A direct re st.ra.int of trade such as is condemned in the first section if successful and used to suppress competition is one of the commonest methods of securing a trade .monopoly condemned in the second section. It is possible for the owners of a 'business of manufacturing and selling useful articles of merchandise, to so conduct their business as to not vio late the inhibitions of the anti-trusi law and yet to secure to themselves the benefits of the economies of manr agement 'and of .production due to the concentration under one control 01 large capital and many plants. Ii they use no other inducement than (he constant low price of their pro duct and its good quality to attract custom and their business is a (profi table one they violate no law. If their actual (competitors are small in com parison with the total capital invested, the .prospect of new investments of capital by others in such a profitable business is sufficiently near and poten tial to restrain tiiem in the prices at which they sell their product. But if they attempt by use of their pre pond»5rating capital and 'by a sale of their goods temiporarily at unduly low prices to drive out of business their competition, or if they attempt by exclusive contraicts with their patrons and threats of non-dealing except up on such contracts, ortoyother meth ods of a similar character to use the largeness of their resources and the extent of their output compared with the total outbut as a means of com peting custom and frightening off competition, then they disclose a pur pose to restrain trade and to estab lish a monopoly and violate tha aict. The object of the anti-trust law was to suppress the abuses of bus iness of the kind described. It was not to interfere with a great volume of capital which, con centrated under one organization, reduced the cost of production and made its profit thereby, and took no advantage of its size by methods akin to duress to mine competition with it. I wish to make this distinction as emphatic as possible, because I con ceive that nothing could happen more destructive to the property of this country than the loss of that great economy in production which has been and will be effected in all manufacturing lin*js by the employ ment 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 enlargement of plant ceases and where this happens and combin ation continues beyond this point, the very fact shows intent to mon opolize and not to economize. The original purpose of many combinations of capital in this coun try was not confined to the legiti mate and proper object of reducing the cost of production. AI8»AR'"' OAILV TRIBUNE. SATURDAY MORNING, JANUARY 8. 1910. On the contrary, the history of most trades will show at times a feverish desire to unite by purchase, combination or otherwise all the plants in the country engaged in the manufacture of particular kinds of goods. The idea was rife that there by a monopoly could be effected and a control of prices 'brought about which would inure to the profit of those engaged in the combination. The path of commerce is strewn with failures of such combinations. Their projectors found that the union of all the plants did not pre vent competition and especially where proper economy had not been pursued in the purchase and in the conduct of the business after the ag-centration gregation was completed. There were enough, however, of such suc cessful 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 abso lute control of the prices of all man ufactured products. In some of the opinions of the fed eral circuit judgec there have been intimations, having the effect, If sound, to weaken the force of the statute by including within it ab surdly unimportant combinations and arrangements, and suggesting foreign manufacturers our foreign therefore the wisdom of changing its trade has been greatly increased, language by limiting Its application Through all our considerations of to serious combinations with intent his grave question however, we to restrain competition or control applied it to the union under one control of two competing interstate in a part of the country, including a dozen states, and to many other 8 prices. A reading of the opinions of competition, the controlling of pric the supreme court however, makes pr0 the supreme court in more than a porations to engage in trade and dozen opinions has construed it in among the states and with application to various phases of bus- combinations affecting interstate der approval and supervision of trade. The value of a statute which federal authority, after a full and is rendered more and more certain in complete disclosure of all the facts its meaning by a series of decisions pertaining to the value of such prop of the supreme court furnishes a strong reason for leaving the act as per8onB to whom it is proposed to it is, to accomplish its Useful pttr.' Generally in the industrial combin- 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 parage were regarded as evidence of bus. iness sagacity and success, and that 8 pose, even though if it were being' should subject the real and newly enacted useful suggestions as to change of phrase might be made. It is the duty and purpose of the imposed by the states within which executive to direct an investigation it may be situated upon other simi by the department of justice,• lar property located therein, and it through the grand jury or otherwise, should require such corporations to into the history, organization, and file full and complete reports of their purposes of all the industrial com- I operations with the department of panies with respect to which there I commerce and labor at regular in is any reasonable grounds for sus- tervals. Corporations organized un picion that they have been organ-j der this act should be prohibited ized for a purpose, and are conduct- from acquiring and holding stock in ing business on a plan which is in other corporations (except for spec violation of the anti-trust law. The ial reasons upon approval by the work is a heavy one but it is not proper federal authority) thus avoid beyond the power of the department ing the creation under national aus. of justice, if sufficient funds are fur. pices, of the holding company with nished, to carry on the investigations subordinate corporations in different and to pay the counsel engaged in states, which has been such an ef the work. But such an lnvestiga-' fective agency in the creation of the tion and possible prosecution of cor porations whose prosperity or de- ations called "Trusts" the principal ting industrial abuses. business is the sale of goods in many Such a national incorporation law states and in foreign markets in other words, the interstate and for. eign business far exceed the business done in any one state. This fact will justify the federal government in granting a federal charter to such a combination to make and sell in interstate and foreign commerce the products of useful manufacture un der such limitations as will secure a compliance with the anti-trust law. It is possible so to frame a statute that while it offers protection to a federal company against harm, ful, vexatious, and unnecessary in. vasion by the states, it shall sub- Instead of it a system of compulsory ject it to reasonable taxation and licenses for all federal corporation control by the states, with respect to its purely local business. they were denounced in this act, not this country that where it appears because of their intrinsic morality, that the acquisition and concentra. but because of the dangerous results toward which they tended, the con.creating of industrial power in the hands of the few, leading to op pression and injustice. In dealing, therefore, with many of the men who have used the methods con demned by the statute for the pur.protecting pose of maintaining a profitable bus iness, 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 law fulness without losrng to the coun try the economy of management by which in our domestic trade the cost of production has been material ly lessened and in competion with insist that the suppression of 8 a the change unnecessary, for they ex- monopolize, in interstate commerce elude from the operation of the act a contractB affecting interstate trade contrary to the public good, and in but a small and incidental way, the monopoly or attempt to bU8iness, are not only unlawful, a 8 and apply the statute only to the ished until ended. real evil aimed at by congress. I therefore recommend the enact. The statute has been on the stat- congress of a general law ute book now for two decades, and restrained and vidlng for the formation of cor. 0 re iness combinations and in reference undue interference by the to various subjects matter. It has nations,, protecting them 8 a a re iating their activities, a 8 re vent the recurrence, un- tional auspices, of those abus- na railroads, to joint traffic arrange-' hich have arisen under state ments between several interstate' trol. Such a law should provide railroads, to private manufacturers for he issue of stock of such cor engaged in a plain attempt to con- porations, to an amount equal only trol prices and suppress competition a a in on the stock and jSSUed for property, 8 to a a fair valuation, ascertained the interest therein of the a tock in payment of such prop, personal property only of BUch cor porations to the same taxation as is great trusts and monopolies. If the prohibition of the anti- struction affects the comfort not trust act against combinations in re only of stockholders, but of mil- I straint of trade is to be effectually lions of wage-earners, employes, and enforced, it is essential that the na associated tradesmen must necessar- tional government shall provide for ily tend to disturb the confidence the creation of national corporations of the business community to dry to carry on a legitimate business up the now flowing sources of capi-j throughout the United States. The tal from its places or hoarding, and conflicting laws of the different produce a halt in our present pros- states of the union with respect to perity that will csuse suffering and! foreign corporations make it diffi. strained circumstances among the cult, if not impossible, for one cor.as innocent many for the faults of the poration to comply with their re guilty few. The question which I quirements so as to carry on busi wish in this message to bring clear.! ness in a number of different states, ly to the consideration and discus- To the suggestion that this pro sion of congress i8 whether in order posal of federal incorporation for to avoid such a possible business industrial combinations is intended danger something cannot be done by: to furnish them a refuge in which which these business combinations to continue industrial abuses under may be offered a means, without federal protection, it should be said great financial disturbance, of that the measure contemplated does changing the character, organization not repeal the Sherman auti-trust and extent of their business into one law and is not to be framed so as to within the lines of the law under permit the doing of the wrongs federal control and supervision, se curing compliance with the anti trust statutes. which it is the purpose of that law to prevent, but only to foster a con tinuance and advance of the highest industrial efficiency without permit. will be opposed, first, by those who believe that trusts should be com pletely broken up and their property destroyed. It will be opposed, sec ond, by those who doubt the consti tutionality of such federal incorpor ation, and even if it is valid, object to it as too great federal centraliza tion. It will be opposed, third, by those who will insist that a more voluntary incorporation like this will not attract to its acceptance the worst of the of fenders against the anti-trust stat ute and who will therefore propose engaged in interstate business. Let us consider these objections In their order. The government is now trying to dissolve some of these combinations, and It is not the in tention of the government to desist in the least degree in its effort to end those combinations which are to-ation day monopolizing the commerce of tion of property go to the extent of a monopoly or of substan tially and directly restraining inter state commerce, it is not the inten tion of the government to permit this monopoly to exist under federal incorporation or to transfer to the wing of the federal gov ernment of the state corporations now violating the Sherman act. Butwill it is not, and should not be, the pol icy of the government to prevent reasonable concentration of capital which is necessary to the economic development of manufacture, trade, and commerce. This country has shown a power of economical pro duction that has astonished the world, and has enabled us to com pete with foreign manufacturers in many markets. It should be the care of the .government to permit such concentration of capital while keeping open the avenues of individ ual enterprise, and the opportunity for a man or corporation with reas onable capital to engage in business. If we would obtain our present bus iness supremacy, we should give to industrial concerns an opportunity to reorganize and to concentrate their legitimate capital in a federal corporation, and to carry on their large business within the lines of the law. Second, there are those who doubt the constitutionality of such federal incorporation. 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 regu lation, congress shall insist that it may provide and authorize certain 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 in terstate bridges. The power of in corporation 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 commerce, may the same power not be asserted? In* deed it is the very fact that they carry on interstate commerce that makes these great industrial con cerns subject to federal prosecution and control. How far as incidental to the carrying on of that commerce it may be with *he power of the federal government to authorize the manufacture of goods, is perhaps more open to discussion, though a recent decision of the supreme 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 appose it on the ground of its tendency to the en largement of the federal power at the expense of the power of the states. It is a sufficient answer to this argumentthis argument to say that no other method can be sug gested which offers federal protec tion on the one hand and close fed eral supervision on the other of these great organization, that are in face federal because they are as wide the country and are entirely elim inated 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, 'because the burden of complete federal supervision and control that must certainly be im posed to accomplish the purpose of the incorporation would not be ac cepted by an ordinary business con cern. The third objection, that the worst offenders will not accept federal in corporation, is easily answered. The decrees of injunction recently adopt ed in prosecutions under the anti trust law are so thorough and sweep ing that the corporations affected by them have but three before them: "First, they must resolve them selves into their component parts in the different states, with a conse quent loss to themselves of capital and effective organization and to the country of concentracea energy and enterprise or "Second, in defiance of law and under some secret trust they must attempt to continue their business in violation of the federal statute, and thus incur the penalties of con tempt and bring on an inevitable criminal prosecution of the individ uals named in the decree and their associates or "Third, they must re-organize and accept in good faith the federal charter issuing. "A federal compulsory license law, urged as a substitute for a federal incorporation law, is unnecessary except to reach that kind of corpor which, by virtue of the consid erations already advanced, will take advantage voluntarily of a corpora tion law, while the other state cor porations doing an interstate busi ness do not need the superivision or the regulation of a federal license and would only be unnecessarily burdened thereby. "The attorney general, by my sug gestion, has drafted a federal incor poration bill, embodying the views I have attempted to set forth, and It be at the disposition of the ap propriate committees of congress. For Sale. Ground Feed, clean and sweet, per 100 pounds, $1.40 ton $25. OSCAR H. WILL & CO. Try the Tribune want columns.!