Bismarck daily tribune. [volume], January 08, 1910, Image 6

About Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916

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SIX
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
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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.
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