davidaulloa/AmericanStories huggingface dataset:
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

such an effective agency in the crea-
ton of the great trusts and monopo-
lies
IF the prohibition of the antitrust
act against combinations in restraint
of trade is to be effectively enforced
it is essential that the national govern
ment shall provide for the creation of
national corporations to carry on le-
Ultimate business throughout the Unit
ed States. The conflicting laws of the
different states Of the Union with re-
spect to foreign corporations make it
difficult. if not impossible. for one cor
poration to comply with their require
ments so as to carry on business In
number of different states"
1 renew the recommendation of the
enactment of a general law providing
for the voluntary formation Of cor
porations to engage in trade and COM
merce among the states and with for
eign nations. Every argument which
was then advanced for such a law and
every explanation which was at that
time offered to possible objections has
been confirmed by our experience since
the enforcement Of the antitrust stat
ute has resulted in the actual dissolu-
ton of active commercial organ1za-
lions.
1t is even more manifest now than
it was then that the denunciation OF
conspiracies in restraint Of trade
should not and does not mean the de-
NAL of organizations large enough to
be intrusted with our interstate and
foreign trade. It has been made more
clear now than it was then that a
purely negative statute like the anti
trust law may well be supplemented
by specific provisions for the building
up and regulation Of legitimate ma
tionaI and foreign commerce.
Government Administrative Experts
Needed to Aid Courts In Trust
DissoIutions.
The drafting of the DEGREES in the
dissolution of the present trusts, with
a view to their reorganization into le-
Ultimate corporations. has made it es-
pecially apparent that the courts are
not provided with the administrative
machinery to make the necessary in
quiries preparatory to reorganization
or to pursue such inquiries. and they
should be empowered to invoke the
aid of the bureau of corporations in
determining the suita BILE reorganiza-
ton of the disintegrated parts. The
circuit court and the attorney general
were greatly aided in framing the de-
cree in the tobacco trust dissolution by
an expert from the bureau of corpora
tons.
Federal Corporation Commission Pro-
posed.
i do not set forth in detail the terms
and sections of a statute which might
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05
of Of
PeP to preserve equality opportunity It is the result of the conf
preserving uncontrolled and unrestricted the the Individual

on the other hand to serve the purpose
of pointing out more in detail to
the business community what must be
avoided.
Federal Incorporation Recommended.
In a special message to congress on
Jan. Z, 1910, l ventured to point out
the disturbance to business that would
probably attend the dissolution of these
offending trusts. I said:
But such an investigation and pos
sible prosecution of corporations whose
prosperity or destruction affects the
comfort not only of stockholders. but
of millions of wage earners, employees
and associated tradesmen, must neces-
sarily tend to disturb the confidence
of the business community, to dry up
the now flowing sources of capital
from its places OF boarding and pro-
duce a halt in our present prosperity
that will cause suffering and strained
circumstances among the innocent
many for the faults of the guilty few.
The question which I wish in this
message to bring clearly to the con-
sideration and discussion of congress
is whether. in order to avoid such a
possible business danger, something
cannot be done by which these bust
ness combinations may be offered a
means, without great financial dis
turbance. of changing the character.
organization and extent of their bust
ness into one within the lines of the
law under federal control and super
vision, securing compliance with the
antitrust statute.
Generally in the industrial combina-
tons called trusts the principal bust
ness is the sale of goods in many states
and in foreign markets-in other words,
the interstate and foreign business far
exceeds the business done in any one
state This fact will justify the fed
eral government in granting a federal
charter to such a combination to make
and sell in interstate and foreign COM
merce the products of useful manufac
ture under such limitations as will Sc
cure a compliance with the antitrust
law 1t is possible so to frame a stat
ute that, while it offers protection to q
federal company against harmful. vex-
atious and unnecessary invasion by the
states. it shall subject it to reasona-
BILE taxation and control by the states
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05
the history Of American
a q
tobacco

combination between any of the com
way of resumption of the old trust.
Each Of the fourteen companies is en-
joined from acquiring stock in any of
the others. All these companies are
enjoined from having common direc-
tors or officers. or common buying or
selling agents, or common Offices, or
lending money to each other.
Size of New Companies.
Objection was made by certain in
dependent tobacco companies that this
settlement was unjust because it left
companies with very large capital in
active business and that the settle
ment that would be effective to put all
on an equality would be a division of
the capital and plant of the trust into
small fractions in amount more near
" equal to that of each of the indie
pendent companies. This contention
results from a misunderstanding of
the antitrust law and its purpose. 1t
accumulation OF large capital in bust
ness enterprises in which such a COM
bination can secure reduced cost of
sale and distribution. It
is directed against such an aggrega-
ton of capital only wnen its purpose
is that of sitting competition, enhanc-
ing or controlling prices and esta bIish-
ing a monopoly If we shall have by
the decree defeated these purposes
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

stock of which was held by New Jer-
sey company. 1t in effect commanded
the dissolution of this combination, di-
rected the transfer and pro rata distri-
button by the New Jersey company Of
the stock held by it in the thirty seven
corporations to and among its stock
holders and the corporations and indi-
vidual defendants were enjoined from
conspiring sOr combining to restore
such monopoly, and all agreements be
tween the subsidiary corporations tend
ing TO produce or bring about further
violations of the act were enjoined.
In the tobacco case the court found
that the individual defendants, TWEEN
ty-nine in number, had been engaged
in a successful effort to acquire COM
plete dominion over the manufacture,
sale and distribution of tobacco in this
country and abroad and that this had
been done by combinations made with
a purpose and effect to stifie competi-
ton, control prices and establish
monopoly. not only in the manufacture
of tobacco, but also of tin foil and lie
orice used in its manufacture and of
its products of cigars, cigarettes and
snuffs. The tobacco suit presented a
far more complicated and difficult case
than the Standard Oil suit for decree
which would effectuate the will of the
court and end the violation of the stat
ute. There was here no single hold
ing company, as in the case of the
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

The honor Of inventng the piano is
claimed by the English. the French
and the Germans. Father Wood. an
English monk at Rome. is said to have
been the real inventor in iii and TO
have manufactured one. which he sold
to Samuel Crispi. the author OF "vir-
ginia." from whom it was purchased
by Fake Greville. though Count Carl
claims the credit for Bartholemmeo
Christiforic of Padua during his stay
in Florence some three years later
Q71A. The French attribute the in
vention to a Partisan named Marius
who, they alleged. produced in 1716 q
harpsichord in which hammers had
been substituted for the old plectrums
or quilts. The Germans are the last IN
the field with j. G. Schroeder of Ores
den. who claimed 171T. when eight
cen years of age. to have Constructed
after much consideration the model OF
a new clavier with hammers. upon
which he could play loudly or softly"
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05
closed is attributed by the court to the
original combination

closed is attributed by the court to the
original combination.
New Remedies Suggested.
Much is said of the repeal of this
statute and of constructive legislation
intended to accomplish the purpose
and blaze a clear path for honest mer-
chants and business men to follow. 1t
may be that such a plan will be
evolved, but l submit that the discus
sions which have been brought out in
recent days by the fear of the con-
tinued execution of the antitrust law
have produced nothing but glittering
generalities and have offered no line
of distinction or rule of action as def
mite. and as clear as that which the su-
preme court itself lays down in en-
forcing the statute.
Supplemental Legislation Needed, Not
Repeal or Amendment.
I see no objection, and indeed I can
see decided advantages, in the enact
ment of a law which shall describe
and denounce methods of competition
which are unfair and are badges of the
unlawful purpose denounced In the
antitrust law. The attempt and pur-
pose to suppress a competitor by un-
derselling him at a price so unprofita-
Bile as to drive him out of business or
the making of exclusive contracts with
customers under which they are re-
quired to give up association with 9th
er manufacturers and numerous kin
dred methods for sitting competition
and effecting monopoly should be de-
scribed with sufficient accuracy in a
criminal statute on the one hand to
enable the government to shorten its
task by prosecuting single misdemean-
ors instead of an entire conspiracy and
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

admitted exceptions to the literal con-
struction of the act. By the DEGREES
they furnish useful precedent as to
the proper method of dealing with the
capital and property of illegal trusts.
These decisions suggest the need and
wisdom of additional or supplemental
legislation to make it easier for the
entire business community to square
with the rule of action and legality
thus finally established and to pre-
serve the benefit. freedom and spur of
reasonable competition without loss of
real efficiency or progress.
Nc Change In the Rule of Decision,
Merely In It's Form of Expression.
The statute in its first section de-
clares to be illegal every contract,
combination in the form of trust or
otherwise or conspiracy in restraint
of trade or commerce among the sew
eral states or with foreign nations"
and in the second declares guilty of a
misdemeanor every person who shall
monOpolize or attempt to monopolize
or combine or conspire with any other
person to monopolize any part Of the
trade or commerce of the several states
or with Foreign nations.
In two early cases. where the statute
was invoked to enjoin a transporta-
ton rate agreement between inter
state railroad companies. it was held
that 1t was no defense to show that
the agreement as to rates complained
of was reasonable at common law. be-
cause it was said that the statute was
directed against all contracts and COM
binations in restraint of trade. whether
reasonable at common law or not 1t
was plain from the record. however,
that the contracts complained of in
those cases would not have been deem
ed reasonable at common law. In sub
sequent cases the court said that the
statute should be given a reasonable
construction and refused to include
within its inhibition certain contrac-
tual restraints of trade which it de-
nominated as incidental or as indirect.
These cases of RESTRAINT of trade that
the court excepted from the operation
of the statute were instances which
TAT common law would have been call
ed reasonable In the Standard Oil
and tobacco cases. therefore, the court
merely adopted the tests of the COM
mon Ia " anu III QGuHlIS SAOCPl4OAo ~
the literal application of the statute
only substituted for the test of being
incidental or indirect that of being
reasonable, and this without varying
in the slightest the actual scope and
effect of the statute In other words,
all the cases under the statute which
have now been decided would have
been decided the same way if the
court had originally accepted in its
construction the rule at common law
IT has been said that the court by in
troducing into the. construction of the
ststute common law distinctions has
emascuIated it This is obviously IN
true By its judgment every contract
and combination ID restraint of inter
state trade made with the purpose or
necessary effect of controlling prices
nv sitting competition or of establish
ing in whole or in part monopoly OF
snch trade is condemned by the stat
uta The most extreme critics cannot
instance a case that ought to be>con-
.zemned under the statute which is not
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

needed to facilitate the squaring Of
great industrial enterprises TO the rule
of action laid down by the antitrust
law This statute as construed by the
supreme court must continue to be the
line of distinction for legitimate bust
ness. It must be enforced unless we
are to Danish individualism from all
business and reduce it to one common
system Of regulation or control OF
prices like that which now prevails
with respect to public utilities and
which when applied to all business
would be a long step toward state So
cialism.
Importance Of the Antitrust Act.
The antitrust act is the expression
of the effort of a freedom loving peo-
pie to preserve equality of opportunity.
1t is the result of the confident deter
mination of such people to maintain
their future growth by preserving IN
controlled and unrestricted the enter
prise of the individual. his industry,
his ingenuity. his intelligence and bis
Independent courage.
For twenty years or more this stat
ute has been upon the statute book.
All knew its general purpose and ap.
proved Many Of its violators were
cynical over its assumed impotence.
1t seemed impossible of enforcement.
Slowly the mills OF the courts ground
and only gradually did the majesty OF
the law assert itself. Many OF its
tatesmen-authors died before II be-
came a living force. and they and 9th.
ers saw the evil grow which they had
hoped to destroy Now its efficacy Ia
seen: now its power Is heavy; now its
object is near achievement Now we
hear the call for it's repeal on the plea
that it interferes with business pros
perity. and we are advised In most
general terms how by some other stat
ute and in some other way the evil
we are just stamping out can be cured
If we only abandon this work OF twen-
ty years and try another experiment
for another term OF years.
1t is said that the act has not done
good. Can this be said in the face Of
the effect Of the Northern Securities
decree? That decree was in no way
so drastic or inhibitive in detail as Ell
Their the Standard oil decree or the
tobacco decree But did It not stop
for all time the then powerful move
ment toward the control Of all the
railroads of the country In single
hand7 Such one man power could
not have been a healthful influence in
the republic. even though exercised
under the general supervision OF an
interstate commission.
D. we desire to make such ruthless
combinations and monopolies lawful
When all energies are directed. not to-
ward the reduction of the cost OF pro-
duction for the public benefit by a
healthful competition. but toward new
ways and means for making perma-
nent in a few hands the absolute con-
troll of the conditions and prices pre-
vailing in the whole field Of industry.
then individual enterprise and EFFORT
will be paralyzed and the spirit OF
commercial freedom VIII be dead.
WIN. II. TAFT.
The White House, Dec. 8, 1911
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

and enhance prices and create a mo-
nopoly.
Lack of DefTniteness In the Statute
The complaint is made of the stat
ute that it is not sufficiently definite
in its description of that which is for
hidden to enable business men to avoid
its violation The suggestion is that
we may have a combination of two
corporations which may run on for
years and that subsequently the at
torney general may conclude that it
was a violation of the statute and that
which was supposed by the combiners
to be innocent then turns out to be a
combination in violation of the statute.
The answer to this hypothetical case
is that when men attempt to amass
such stupendous capital as will enable
them to suppress competition, control
prices and establish a monopoly they
know the purpose of their acts. Men
do not do such thing without having
it clearly in mind If what they do is
merely for the purpose of reducing the
cost of production, without the thought
of suppressing competition by use of the
bigness of the plant they are creating.
then they cannot be convicted at the
time the union is made, nor can they
be convicted later unless it happen
that later on they conclude to sup
press competition and take the usual
methods for doing so and thus estab-
lish for themselves a monopoly They
can in such a case hardly complain if
the motive which subsequently is dis
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

brought within its terms as thus con
strued-
The suggestion is also made that the
supreme court by its decision in the
last two cases has committed to the
court the underlined and unlimited dis
erection to determine whether a case of
restraint of trade is within the terms
of the statute This is wholly untrue
A reasonable restraint of trade at COM
mon law is well understood and is
clearly defined. 1t does not rest in the
discretion of the court 1t must be
limited to accomplish the purpose of a
lawful main contract to which in order
that it shall be enforceable at all it
must be incidental If it exceed the
needs of that contract it is void.
The test of reaSOnableneSS was never
applied by the court at comman law
to contracts or combinations or con-
spiracies in restraint of trade whose
purpose was or whose necessary effect
would be to stifie competition. to con-
troll prices or establish monopolies.
The courts never assumed power to
say that such contracts or combina
tons or conspiracies might be lawful
if the parties to them were only mod
crate in the use of the power thus Sc
cured and did not exact from the pub
lie too great and exorbitant prices. It
is true that many theorists and others
in business violating the stat
ute have hoped that some such line
could be drawn by courts, but no court
Of authority has ever attempted it.
Certainly there is nothing in the deci-
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05
PRESIDENT TAFT'S MESSAGE
ON The ANTITRUST STATUTE
hs Law Growing Force and EHsewneH Should Be Strengthened Supplemental
Legislation Not Repealed AendGdFGde incorporation Recommended and Fed
eT Corporation Commission Proposed Confidence Expressed That Jail Sentences
Will Be Imposed For Studied and Deliberate Defiance Of the

To the Senate and House of Repre-
sentatives:
This message is the first Of several
which 1 shall send to congress during
the interval between the opening of
its regular session and its adjourn
ment for the Christmas holidays. The
amount of information to be commu-
nicated as to the operations of the
government. the number of important
subjects calling for comment by the
executive and the transmission to con-
gress of exhaustive reports of special
commissions make it impossible to in
clude in one message of a reasonable
length discussion of the topics that
ought to be brought to the attention
of the national legislature at its first
regular session
The Antitrust Law-The Supreme
Court Decisions.
In May las- the supreme court hand
ed down decisions in the suits in equi-
ty brought by the United States to en-
joil the further maintenance of the
Standard Oil trust and of the Ameri-
can Tobacco trust and to secure their
dissolution. The decisions are epoch
making and serve TO advise the bust
ness world authoritatiyely of the
scope and operation of the antitrust
act of 1890. The decisic rs do not de-
part in any substantial way from the
previous decisions of the court in con-
STRUNG and applying this important
statute. but they clarity those deci-
sions by further defining the already
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

with respect to its purely local bust
ness.
Corporations organized under this
act should be prohibited from acquir-
ing and holding stock in other corpo-
rationS Except for special reasons.
upon approval by the proper federal
authority, thus avoiding the creation
under national auspices OF the holding
company with subordinate corporations
IN different states. which has been
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

supply the constructive legislation per-
hitting and aiding the formation of
combinations of capital into federal
corporations. They should be subject
to rigid rules as to their organization
and procedure, including effective pub
licity, and to the closest supervision as
to the issue of stock and bonds by an
executive bureau or commission in the
department of commerce AID labor, to
which in times of doubt they might
well submit their proposed plans for
future business. 1t must be distinctly
understood that Incorporation under a
federal law could not exempt the COM
pany thus formed and its incorporators
and managers from prosecution under
the antitrust law for subsequent IL
legal conduct, but the publicity of its
procedure and the opportunity for fire.
quent consultation with the bureau or
commission in charge of the incorpora-
ton as to the legitimate purpose of its
transactions would offer it as great Sc
eurity against successful prosecutions
for violations of the law as would be
practical or wise.
Such a bureau or commission might
well be invested also with the duty
already referred to of aiding courts
In the dissolution and recreation of
trusts within the law. 1t should be an
executive tribunal of the dignity and
power of the comptroller of the cur
rency or the interstate commerce com
mission, which now exercises supervis-
DRY power over important classes of
corporations under federal regulation.
The drafting of such a federal in
corporation law would offer ample op-
portunity to prevent many manifest
evils in corporate management today.
including responsibility Of control in
the hands of the few who are not the
real owners.
Incorporation Voluntary.
recommend that the federal char
ters thus to be granted shall be volun-
tary, at least until experience justifies
mandatory provisions The benefit to |
be derived from the operation of great |
businesses under the protection of such !
a charter would attract all who are
anxious to keep within the lines of the
law Other large combinations that
fail to take advantage of the federal
viii not have a right to
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

complain If their failure Is ascribed to
unwillingness to submit their transac-
tons to the careful official scrutiny.
competent supervision and publicity
attendant upon the enjoyment OF such
a charter.
Only Supplemental Legislation Needed
The opportunity thus suggested FOR
federal Incorporation. it seems to me,
is suitable constructive legislation
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

thu has mote be n
of IN
tirneth
n
q
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

pending,
of
STILL O
and o Iav~ be
De
The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-12-05

But that the anti trust act be effective
different
competition between
essential to continued prosperity growth.
Elmore County Republican. [volume] (Mountain Home, Idaho) 1910-1915, 1911-12-30

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