The Washington herald., 1911-12-06
Taft Limits His Message to Congress to Dis.
cusSiOn of Trust Problem - Strongly
Against Attempt to Weaken Law.
Defends Decision of Supreme Court in Recent Cases
and Advocates Federal Incorporation and Com
mission to Regulate Big Corporations.

President Tafts third annual mes
sage to Congress was read in botI
Houses yesterday after the opening ex-
ercises were ended
The message dealt with only one sub
ject-trusts-an the correlated sub
ject, the Sherman antitrust laws. The
message reads:
To the Senate and House of Representa-
tives:
This message is the first of several
which I shall send to Congress during
tie interval between the opening of its
regular session and its adjournment for
tie Christmas holidays. The amount of
information to be communicated as to the
operations OF the government the num-
her of important subjects calling for
Comment by the Executive, and the trans
mission to Congress Of exhaustive reports
of special commissions, make it impOS-
siblr to include in one message of a
reasonable length a 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 last the Supreme Court handed
down decisions in the suits in equity
brought by the United States to enjoin
the further maintenance of the Standard
Oil trust and Of the American Tobacco
trust, and to secure their dissolution.
The decisions are epoch-making. and
serve to advis,. the business world
nuthoritativyly Of the scope and opera
tiOn OF the antitrust act Of 1880. The
decisions do not DEPART in any suhstan-
tial wdy from the previous decisions of
the court in constituting and applying
this important statute. but they clarity
those decisions by further defining the
already admitted exceptions to tho literal
construction Of the act BY the DEGREES.
they furnish a useful precedent as to the
prODer methCd of dealing with the capital
and property of Illegal trusts. These de-
CisiOns 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 estah-
lish"d and TO preserve the benefit free
dom. ana spur OF reasonable competition
without loss Of real efficiency or progress.
No Change in the Rule of Decision.
Merely In Its Form of Expression.
The statute in it's first section declares
to be Illegal ''every contract cOmbina-
ton in the form OF trust or otherwise,
or conspiracy. in restraint of trade or
commerce among the several States or
with foreign nations" and. in the second.
declares guilty OF miSdemeanor every
person who shall mOuupoliZe or attempt
to mOnOpuliZe or combine or ronspire
with any other person to mUnOpOIize /
any part Of the trade ,r commerce Of
tiOns.'
In two early cases where the statute ,
WAS invoked to rnjoin Il transportation .
rate agreement between interstate rail- /
road companies II was held that il was
no defens, To- show that the agreement |.
as to rates complained of was reason /
able at common law. because it was /
said that the statute was directed !
against all contracts and combinations I
I'm restraint 0f trade. whether reason !
Hhl" At common law or not. 1t was /
plain from the record. however, that |
the contracts complained of in those !
cases would not have been deemed rea-
sOnable ut common law. In subsequent |
cases the court said that the statute !
should be given reasonable COnstruC- |
tion, and refused to include within its !
inhibition certain Contractual restraints
OF trade which il denominatrd as Incl
dental or as Indirect.
the court excepted from the operation
of the statute were instances which, at
common law. would have been called
reasonable. In the Standard Oil and
Tobacco cases. therefore, the court
merely adopted the tests Of the COM
mon law. and in defining exceptions to
the literal application of the statute
only substituted for the test of being
Incidental or indirect that of being rea-
sonable, 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 il the court had originally
accepted in its construction the rule at
common law.
1t has been said that the court by
into the construction Of the
statute COmmOn-law distinctions. has
it. This is obviously untrue |
By its Judgment every contract and COM
Dination in restraint of interstate trade
made with the purpose or necessary ef-
'ect of controlling prices by sitting COM
petition. or OF establishing in whole or +
n rart a monopoly OF such trade, is
by the statute. The most !
Extreme critics cannot instance a case
hat ought to he condemned under the
statute which is not brought within its I
erms. as thus construed. :
supreme Court. b. its decision in the last I
wo cases, has committed to the court
he underlined and unlimited discretion !
o determine whether a case of restraint {
" trade is within the terms of the !
tatute. This is wholly untrue. A rea- :
onable restraint OF trade at common /
NV is well understood and is clearly de- =
med. 1t does not rest in the discretion >
4 the court. II must be limited to aC-
omplish the purpose of a lawful main :
ontract, to which, in order that it shall :
'e enforceable at all. II must be incl :
entail II it exceeds the needs of that :,
II is void
The test OF reasonabIeness was never !,
pplied by the court at common law TO :,
ontracts or combinations or conspiracies :,
4 restraint of trade whose purpose was =
T whose necessary effect would be TO L
tihe competition, to control prices. or
stablish mOnopolies. The courts never !,
ssumed power to say that such con-
racts or combinations or conspiracies Z
night be lawful IL the parties to them !.
lere only moderate in the use of the =
over thus secured and did not exact :