Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-06-18
PAPER TRUST SCORED
q. s. Circuit Judge Decides
Against Corporations.
SUIT BY GOVERNMENT
INSTITUTED AGAINST THE GEN.
ERAL PAPER COMPANY.
Ordered to Submit Books in Open Court
and Officers to Answer Rele-
want Questions.

want Questions.
MILWAUKEE, Wis, June 17.-Corpora-
tions must submit their books in open
court and officers of corporations must
answer relevant questions. when such cor
porations are sued by the government
under the antitrust law on the charge OF
being a trust operating In restraint OF
interstate commerce, according to a decis-
ion given today by United States Circuit
Judge Seaman against the General Paper
Company.
The General Paper Company, sued by the
United States to determine whether 1t was
a trust in restraint of trade, contended
that most of the questions asked its off,
GERS before master in chancery by fed
eral attorneys were irrelevant and refused
to submit the company's books. Judge Sea-
man today ruled that the company must
show its books to supply possible evidence
for the prosecution, and must answer ques-
lions declared by the federal attorneys to
be relevant.
Attorney James D. Flanders for the paper
company says the case will be taken to the
circuit court of appeals. Pending an APP
peal, the company intends to remain firm in
its refusals.
Governments Contentious Sustained.
The governments contentious were all
sustained except that the bonds which are
to be produced under the courts order shall
not pass out of the possession OF the de-
PENDANT, save in case Of pressing need. The
decision, If upheld by the higher courts, will
have an important bearing on future fights
against alleged trusts.
During the examination before q special
master, objections as to relevancy were
made by the paper company to about two
thirds of the questions asked. The paper
company asserted that contracts made with
certain newspapers, for instance, were
wholly irrelevant and refused to divulge the
terms of such contracts.
The prosecution said these contracts were
relevant, since they showed the contracts
to be made solely by the General Paper
Company and not by the constituent mills
which furnished the paper, thus aiding in
the proof of trusts existence.
Frequent Objections.
The objection Of irrelevancy was raised
SO frequently that the examination almost
ceased to make progress. and the circuit
court was asked to make the defense an
swer and produce books, showing the prof
its made, the expenses of the corporation,
the manner of Its organization and similar
other information. In his-ruling Judge Sea-
man said:
while the arguments have covered a
wide range. with numerous citations in
point on the various propositions, am sat-
isfied that the questions of privilege under
the fourth and fifth constitutional amend
mentS are the only ones not plainly met
by the general consensus of authority.
In the examination no question of pr1vt-
lege was raised; in fact, 1t was expressly
repudiated in at least one instance, and the
general objection of irrelevancy was on the
tn nr
to produce documents.
Objections are to be preserved, but the
materiality is for consideration by the trial
court and not the examiner; and the court
from which the subpoena issues will rarely
pass on such objections by way of super
vision. The objections which are thus
brought do not impress me as entitled to
consideration in detail on the present appIi-
cation and will be treated as oyerruled on
the grounds stated
The Attorney General has received a
telegram from Milwaukee from Frank B.
Kellogg, the governments attorney in the
General Paper Company investigation, an
nouncing that the decision handed down
by Judge Seaman today is a complete VIC
tory for the government on every point.
The dispatch says that the witnesses are
required to answer every question and to
produce their documents and books. 1t is
added that the defendants have asked to
be allowed an appeal and this application
day.
Those in reference to dividends and con-
tracts with newspapers are earnestly
pressed, and If it were unmistakable that
the inquiries were in no view relevant, the
objections would be sustained. But with
out intimation in any sense on the merit
of the controversy, cannot so rule.
Questions to Witnesses.
"As to questions addressed to the wit
nesses for information within their present
knowledge apart from the production OF
records and documents, l am of the opinion
that the only constitutional privilege which
can be involved is personal and cannot ex-
tend to the corporation or be invoked in Its
behalf. The fact that he Is an officer of a
corporation and in that relation acquired
the information sought, whether confiden-
tial or not does not affect the privilege OF
a witness under consideration.
THE test to be applied is whether the inn
muntty or amnesty granted under the act
of Congress in question is as broad as the
privilege granted under the Constitution.
teal with the like provision in the inter-
state commerce act l am constrained to
rule that the immunity Is sufficient TO re-
move the privilege.
THE contention that the provision OF the
interstate commerce act which makes the
giving of testimony compulsory (not APP
pearing in the antitrust act), differentiates
it's construction, seems to me without force
as that provision merely imposes the duty
to testify before non-judictal tribunal
while the duty to testify in this judicial
proceeding arises both at common law and
under the general statutes. Under the de-
cision referred to the court is not at liberty
to consider the interests of witness as con
stituent corporations by way of limitation
of privilege or immunity.