TRUSTS
I have given the best study I could to the grave evil of the
accumulation in the country of vast fortunes in single hands,
or of vast properties in the hands of great corporations--
popularly spoken of as trusts--whose powers are wielded by
one, or a few persons. This is the most important question
before the American people demanding solution in the immediate
future. A great many remedies have been proposed, some with
sincerity and some, I am afraid, merely for partisan ends.
The difficulty is increased by the fact that many of the evils
caused by trusts, or apprehended from them, can only be cured
by the action of the States, but cannot be reached by Congress,
which can only deal with international or interstate commerce.
As long ago as 1890 the people were becoming alarmed about
this matter. But the evil has increased rapidly during the
last twelve years. It is said that one man in this country
has acquired a fortune of more than a thousand million dollars
by getting an advantage over other producers or dealers in
a great necessary of life in the rates at which the railroads
transport his goods to market.
In 1890 a bill was passed which was called the Sherman Act,
for no other reason I can think of except that Mr. Sherman
had nothing to do with framing it whatever. He introduced
a bill and reported it from the Finance Committee providing
that whenever a trust, as it was called, dealt with an article
protected by the tariff, the article should be put on the
free list. This was a crude, imperfect, and unjust provision.
It let in goods made abroad by a foreign trust to compete
with the honest domestic manufacturer. If there happened
to be an industry employing thousands or hundreds of thousands
of workmen, in which thousands of millions of American capital
was invested, and a few persons got up a trust--perhaps importers,
for the very purpose of breaking down the American manufacturer--
and made the article to a very small extent, all honest manufacturers
would be deprived of their protection.
Mr. Sherman's bill found little favor with the Senate. It
was referred to the Judiciary Committee of which I was then
a member. I drew as an amendment the present bill which I
presented to the Committee. There was a good deal of opposition
to it in the Committee. Nearly every member had a plan of
his own. But at last the Committee came to my view and reported
the law of 1890. The House disagreed to our bill and the
matter went to a Conference Committee, of which Mr. Edmunds,
the Chairman of the Committee, and I, as the member of the
Committee who was the author of the bill, were members. The
House finally came to our view.
It was expected that the Court, in administering that law,
would confine its operation to cases which are contrary to the
policy of the law, treating the words "agreements in restraint
of trade," as having a technical meaning, such as they are
supposed to have in England. The Supreme Court of the United
States went in this particular farther than was expected.
In one case it held that "the bill comprehended every scheme
that might be devised to restrain trade or commerce among
the several States or with foreign nations." From this opinion
several of the Court, including Mr. Justice Gray, dissented.
It has not been carried to its full extent since, and I think
will never be held to prohibit the lawful and harmless combinations
which have been permitted in this country and in England without
complaint, like contracts of partnership which are usually
considered harmless. We thought it was best to use this general
phrase which, as we thought, had an accepted and well-known
meaning in the English law, and then after it had been construed
by the Court, and a body of decisions had grown up under
the law, Congress would be able to make such further amendments
as might be found by experience necessary.
The statute has worked very well indeed, although the Court
by one majority and against the very earnest and emphatic
dissent of some of its greatest lawyers, declined to give
a technical meaning to the phrase, "in restraint of trade."
But the operation of the statute has been healthy. The Attorney-
General has recently given an account of suits in equity by
which he had destroyed a good many vast combinations, including
a combination of the six largest meat-packing concerns in
the country; a combination of railroads which had been restrained
from making any rebate or granting any preference whatever
to any shipper; and a pooling arrangement between the Southern
railroads which denied the right of the shippers interested
in the cotton product in the South to prescribe the route
over which their goods should pass. He has also brought a
suit in equity to prevent the operation of a proposed merger
of sundry transcontinental railroads, thereby breaking up
a monopoly which affected the whole freight and passenger
traffic of the Northwest.
The public uneasiness, however, still continued. The matter
was very much discussed in the campaign for electing members
of the House of Representatives in the autumn of 1902.
I made two or three careful speeches on the subject in Massachusetts,
in which I pointed out that the existing law, in general,
was likely to be sufficient. I claimed, however, further,
that Congress had, in my opinion, the power of controlling
the whole matter, by reason of its right to prescribe terms
on which any corporation, created by State authority or its
own, should engage in interstate or international commerce.
It might provide as a condition for such traffic by a corporation,
that its officers or members should put on file an obligation
to be personally liable for the debts of the concern in case
the conditions prescribed by Congress were not complied with.
The House of Representatives passed a very stringent bill
known as the Littlefield Bill, which was amended by the Judiciary
Committee, of which I was the Chairman, by adding the provisions
of a bill which I had, myself, previously introduced, based
on the suggestions above stated.
But there was a general feeling that the amendments to the
existing law proposed by the Administration were all that
should be made at present. These consisted in providing
severe penalties for granting rebates by railroads to favored
shippers; for having suits under the existing law brought
forward for prompt decision, and for giving the new Department
of Commerce large powers for the examination of the conduct
of the business of such corporations, and to compel them to
make such returns as should be thought desirable.
I should have preferred to have the bill I reported brought
forward and discussed in the Senate, although there was obviously
no time, with the pressure of other business, to get it through.
But it was thought best by a majority of the Republicans not
to take it up. Some of them thought it was likely, if passed,
to have a very serious and perhaps disastrous effect on the
country. So far as I know, nobody in either House of Congress
or in the press has pointed out why such a result would be
likely to follow.
On the whole I was very well satisfied. The interests concerned
are vast. A rash or unskilful remedy might bring infinite
trouble or ruin to lawful business. The work of restraining
the trusts is going on very well under the law of 1890. It
is a matter which must be discussed and considered by the
American people for a great many years to come, and the evils
from the trusts at present are rather in anticipation than
in reality. So I am very well content, for the present, with
what has been accomplished.