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:*r~, Yj?.; • _ V,-;i i .w mm** BSasM '*f ,, ?• f« , r!"^ JM 1 V' •>' SENDS SPECIAL MESSAGE ; f ^ it?' ?\ •,*&k<;:i es Recoisiueriuaiions as to Lot merce Law and the Trusts s. * 1 "• r->tr UID CONSTITUTE A SPECIAL COURT iudfw to Have Power to Act m Certain Specified Caws 1* .Wisdom of Federal Incorporation of Indus* I trial Companies Suggested--Scope ̂ I of Present Law Too Wide - '* I > i I*rV'.l : kv*"8'- '.'. ',-r *•' .r "" i • f i >> *' i' §'t "Mrs, m . 1,'^an. T--The following Is President Taft's message to o«in Kress on the subject of needed legislation re- ,®ardiag the interstate commerce law and the control of the trusts: To the Senate and House of Represent* 4tUves: I withheld from my annual mes­ sage a discussion of needed legislation finder the authority which congress has to regulate commerce between the states And with foreign countries, and said that I_would bring this subject-matter to your -JMtentlon later in the session. According­ ly, I beg to submit to you certain reoom- *ttiendations as to the amendments to the Interstate commerce law and certain con- .sideratlons arising out of the operations •of the anti-trust law suggesting tlie wis- 4om of federal incorporation of indus­ trial companies. interstate Commerce Law. - In the annual report of the interstate •commerce commission for the year 1908, Attention is called to the fact that be­ tween July 1, ISM, and the close of that 16 suits had been begun to set aside -•niers of the commission (besides one commenced before that date), and that torn orders of much consequence had been permitted to go without protest; that the questions presented by these va­ rious suits were fundamental, as the con­ stitutionality of the act itself was in is* M«, and the right of congress to dele­ gate to any tribunal authority to estab- Sh an interstate rate was denied; but at perhaps the most serious practical -question raised concerned the extent of TOe right of the courts to review the or- 4ers of the commission; and it was point­ ed out that if the contention of the car­ riers fn this latter respect alone were sus­ tained, but little progress had been made in the Hepburn act toward the ef­ fective regulation of interstate transpor­ tation charges. In 12 of the cases re­ ferred to, it was stated, preliminary in­ junctions were prayed for, being granted In Six and refused in six. "It has from the first been well under­ stood," says the commission, "that the •success of the present act as a regulat­ ing measure depended largely upon the facility with which temporary injunc­ tions could be obtained. If a railroad •company, by mere allegation in its bill of complaint, supported by exparte affl- •4«vits. can Overturn the result of days •Of patient investigation, no very satisfac­ tory result can be expected. The railroad lMes nothing by these proceedings since . if they fall, it can only be required to •establish the rate and to pay to shippers the difference between the higher rate -coHeeted and the rate which is finally held to be reasonable. In point of fact It usually profits, because it can seldom "fee required to return more than a frac­ tion of the excess charges collected." In its report for the year 1909 the com­ mission shows that of the IT cases re­ ferred to in its 1908 report, only one had been decided in the supreme court of the United States, although five other cases TaW been argued, and submitted to that tribunal in October, 130S. Of course, every carrier affected by an •order of the commission has a constitu­ tional right to appeal to a federal court to protect It from the enforcement of an •order which it may show to be prima- tack- confiscatory or unjustly discrimina­ tory hi its effect; and as this application «*ay be made to a court in any district of the United States, not only does delay ""it In the enforcement of the order uncertainty Is caused by con- t>f decision. JW* questions presented by these «p- •Bcatione are too often technical in tfefAr character nnd require a knowledge the business and the mastery of a dffeat volume of conflicting Which is tedious to examine" and trtiu- %$|*ome to comprehend. It would not be pfbper to attempt to deprive any cor­ poration of the right to the review bv • court of any order or decree which" it ;»indiKturhW!, would ros, -j A reaspn- nble return upon its Investment or would •plbiect it to burdens which would un­ justly discriminate against It a«d in fa­ vor of other carriers similarly situated What is, however, of supreme impor­ tance is that the decision of such ques­ tions shall be as speedy as the nature o* the circumstances will admit, and tha a, uniformity of dvision be secured, a MM to bring about an effective, system •tic and scientific enforcement qf th "Commerce law, rather than conflicting de •ciSfons and uncertainty of final result Recommends "Court of Commerce." S^or this purptose I recommend the •establishment of a court of the United States composed of five judges desig­ nated for such purpose from amorjg the •circuit judges of the. United States, to 1>e known as the "United States court iflt commerce," which court shall b* <0h>thed with exclusive original jurisdic­ tion over the following classes of cases: t 0) All cases for ttje enforcement, oth- JB^wise than by adjudication and collec­ tion, of a forfeiture or penalty, or by In­ action of criminal Dunishment, of any * -OWier of 'the Interstate commerce com­ mission other than for the payment of money. ,(2> All cases brought to enjoin, set aside, annul or suspend any order or |%quirement of the interstate commerce •commission. ' (3) All suoh cases as under section 3 •it the act of February 19, 1903, known <as the "Elkins act," are authorised to f»e maintained in a circuit court of the Vnlted States. AH such mandamus proceedings aM upder the provisions of section!3D or Section *3 of the interstate commerce ftaw are authorized to be maintained In a WjpOtt court of, the United SUtf.es. j , Reasons" precisely aiitUogous to 'ttiose' f#»ich induced the congress to create the jGourt of customs appeals by the provi- ifohs in the tariff agt of August Li, 1909, .*• Joay be urged in support of the creation m the commerce court. '.In order to provide a sufficient ,nuca- of Judges to enable this court xo b& instituted it will be necessary to au­ thorize the appointment of five addi- ' tional circuit judges, who, for the, pur­ poses of appointment, might be distrib- Ited to those circuits where there (s at the present time the largest volume of . ,l»t»sihess sueh as the second, third, fourth. should empower the chief Justice at any time when the busing's Sl Sthe court of commerce do»c not require the services of all the judges to reassign the judges designated to that court to the circuits to which they respectively belong; and it should also provide for payment to such judges while sitting by assignment in the court of commerce of such addi­ tional amount as Is necessary to bring their annuol compensation up to 110,000. Only Second to 8uprsme Court. The regular sessions of such court should be held at ttie capltol, but it should be empowered to hold sessions in different parts of the United States if found desirable; and its orders and Judg­ ments should be made final, subject only to review by the supreme court of the United States, with the provision that the operation of the decree appealed from shall not be stayed unless the su­ preme court shall so order. The com­ merce court should be empowered in its discretfon to restrain or suspend the op­ eration of aft order of the interstate com­ merce commission under review pending the final hearing and determination Of the proceeding, but no such restraining order should be made except upon no­ tice and after hearing, unless in cases where irreparable damage would other­ wise ensue to the petitioner. A Judge of that court might be empowered to al­ low a stay of the commission's order for a period of not more than 60 days, but pending application to the court of its order or injunction, then only where his order shall contain a specific finding based upon evidence submitted to the judge making the order and identified by reference thereto that such Irreparable damage would result to the petitioner, specifying the nature of the damage. Under the existing law, the interstate commerce commission itself initiates and defends litigation in the courts for the enforceemnt. or In the defense of Its or­ ders and decrees, and for this purpose it employs attorneys, who, while subject to the control of the attorney general, act upon the initiative and under the Instruc­ tions of the commission. This blending of administrative, legislative and Judi­ cial functions tends. In my opinion, to impair the efficiency of the commission by clothing it with partisan characteris­ tics and robbing it of the impartial judi­ cial attitude it should occupy In pass­ ing upon questions submitted to it In my opinion all litigation affecting the government should be under the direct control of the department of justice; and I therefore recommend that all proceed ings affecting orders and decrees "of th interstate commerce commission 1> brought by or against the United States eo nomine, and be placed in charge of an assistant attorney-general acting under the direction of the attorney general. WouM Permit Agreement*. .. In vtew c* the complete control oyer rate-making and, other practices of in­ terstate carflers established by the acts of congress, and as recommended in this communication, I see no reason why agreemnts between carriers subject to the act, specifying the classifications of freight and the rates, fares and charges for transportation of passengers and freight which they may agree to estab­ lish. should not be permitted, provided, copies of such agreemnts be promptly filed with the commission, but subject to all the previsions of the interstate com­ merce act. and subject to the right of any parties to such agreemnt to cancel it as to all or any of the agreed rates, fares, charges, Or classification* by SO days' notice In writing to the other Par­ ties and to the commission. * Under the e*!«H*>g !«» the eomrijls sion can only act with respect to an al­ leged excessive rate or unduly discrimin­ atory practice by a carrier on a com­ plaint made by some individual affected thereby. I see no reason why the com­ mission should not be authorised to- act on its own Initiative as well as upon the complaint of an individual in investigat­ ing the fairness of any existing rats or practice; and I recommend the amend­ ment of the law to so provide; and also that the commission shall be fully em­ powered, beyond any question, to pass upon the classifications of commodities for purpose of fixing rates, in like man- ler as it may now do with respect to the maximum rate applicable to any trans­ portation. Existing Law Power!***. Under the existing law the commission may not investigate an increase in rates until after It shall become effective; and ilthough one or more carriers may file with the com mission a proposed Increase ni rates or change in classifications, or ather alteration of the existing rates or Massineations, to become effective at the expiration of 30 days from such filing, no proceeding can be taketi to investigate the reasonableness of such proposed change until after it becomes operative. On the other hand, if the commission shall make an order finding that an ex­ isting rate is excessive, and directing it to be reduced, the carrier affected may by proceedings in the courts, stay thi operation of such order of reduction for months, and even years. It has, there­ fore, been suggested that the commis­ sion should be empowered whenever % proposed increase in .rates is filed, once to enter upon an Investigation of the reasonableness of the increase, and to make an order postponing the effec­ tive date of such Increase until after such investigation shall be completed. To this much objection has been made on the part of carriei*. They contend that this would be in effect to take from the owners of the railroads the management of their properties and to clothe the in­ terstate commerce commission with the original rate-making power--a policy which was much discussed at the time of the passage of the Hepburn act In 1905-6, and which was then and has al­ ways been distinctly rejected; and in re­ ply to tlie suggestion that they are able, by resorting to the courts, to stay the taking effect of the order of the commis­ sion until its reasonableness shall have been investigated by the courts, where­ as, the people are deprived of any such remedy with respect to • action by the carries, they point to the provlsonS of ^venth and eighth circuits. The act ®J the interstate commerce act providing for restitution to the shippers by carrters, of excessive rates charged In oases where the order of the commission reducing such rates are affirmed. It may be doubt­ ed how effective this remedy really 1^ Experience has shown that many, per­ haps most shippers do not resort to pro­ ceedings to recover the excessive rates which they may have been required to pay, for the simple Qfason that they have added the rates paid to the cost or the goods, and thus enhanced the price there­ of to their customers, and that the public nn M Qjj tha hgndr the enormous volume of transpor­ tation charges, the great number of sep­ arate tariffs filed annually with the In­ terstate commerce commission, amount­ ing to almost 200,000, and the Impossibil­ ity of any commission supervising the Waking of tariffs in advance of their be­ coming effective on every transportation line within the United States to the ex­ tent that would be necessary If their ac­ tive concurrence were required in the ma­ king of eveiv tariff, has satisfied me that this power, if granted, should be con­ ferred In a very limited and restricted form. Commission Should Probe Change. I therefore recommend that the Inter­ state commerce commission be empow­ ered whenever any proposed Increase of rates is filed, at once, either on com­ plaint or of its own motion, to enter upon, an investigation into the reasonable­ ness of such change, and that it be fur­ ther empowered, in Its discretion, to postpone 'the effective date of such pro­ posed increase for a period not exceed­ ing 60 days beyond the date when such rate would take effect. If within this tin)e it sha{l determine that such in­ crease Is unreasonable, It may then, by Its order, either forbid the Increase at all, or fix the maximum beyond which it shall not be made. If, on the other hand, at the expiration of this time, the commission shall not have completed Its Investlgaticr.. tfcsn the rates shall take effect precisely as it would under the ex­ isting law, and the commission may con­ tinue its investigation with such results as might be realized under the law as it now stands ^ The claim Is very earnestly advanced by some large associations of shippers that shippers of freight should be em­ powered to direct the route over which their shipments should pass to destina­ tion, and in this connection It has been urged that the provisions of section 15 of the interstate commerce act, which now empowers the commission, after hearing on complaint, to establish through routes and maxlrtium Joint rates to be charged, etc., when no reasonable or satisfactory through route shall have been already established, be amended so as to empower the commission to take such action, even when one existing rea­ sonable and satisfactory route already exists, if It be possible, to establish ad­ ditional routes. This ooems to me to be a reasonable proposition. The Republican platform of 1908 " de­ clared in favor of amending the Inter­ state commerce law, but so as always to maintain the principle of competition be­ tween naturally competing lines, and avoiding the common control of such lines by any means whatever. One of the most potent means of exercising such control has been through the holding of stock of one railroad company by an­ other company owning a competing line. This condition has grown up under ex­ press legislative power conferred by the laws of many states, and to attempt now to suddenly reverse that »policy so far as it affects the ownership of stocks here­ tofore so acquired, would be to inflict grievous injury, not only upon the cor­ porations affected but upon a large body of the investment holding public. Plan to End Rail Combine. I, however, recommend that the law shall be amended so as to provide that from and after the date of its passage no railroad company subject to the inter­ state commerce act shall, directly or In­ directly, acquire any interests of any kind in capital stock or purchase or lease any ratii*oad of any other corpora­ tion which competes with it respecting business to which the interstate com­ merce act applies. But especially for e protection of the minority stockhold­ ers In securing to them the best market for ther stock, I recommend that such prohibition be coupled with a proviso that it shall not operate to prevent any corporation which, at the date of passage of such act, shall own not less than one- half of the entire Issued and outstanding capital stock of any other railroad com­ pany, from acquiring all or the remain­ der of such stock; nor to prohibit any railroad company which at the date of the enactment of the law is operating a railroad of any other corporation under lease, executed of a terra not less than 25 years, from acquiring the reversionary ownership of the demised railroad; but that such provisions shall not operate to authorise or validate th© acquisition, through stock ownership or otherwise, of a competing line or Interest therein in violation of the anti-trust or any other ^The Republican platform of 1908 fur­ ther declares In favor of such national legislation and supervision as will pre­ vent the future over-issue of stocks and bonds by Interstate carriers, and In order to carry out its provisions I recommend the enactment of a law providing that no railroad corporation subject to the in­ terstate commerce act shall hereafter for any purpose connected with or relating io any part of its buoincoii juVcmiu u>" j said act, issue any capital stock without previous or simultaneous payment to It of not less than the par value of such stock, or any bonds or other obligations (except notes maturing not more than one year from the date of their issue), without the previous or simultaneous pay­ ment to such corporation of *»ot less than the par value of such bonds, or other ob­ ligations, or, if issued at lees than their par value, then not wHhoiit such pay­ ment of the reasonable market value of such bonds or obligations as ascertained by the interstate commerce commis­ sion; and that no property, service, or other thing than money, shall be taken In payment to such carrier cor­ poration, of the par or other required price of such stock, bond or other obliga­ tion, except the fair value of such prop­ erty, services or other thing ascertained by the commission; and that such act shall also contain provisions to prevent the abuse by the improvident or improp­ er issue of notes maturing at a period not exceeding 12 months from date, in such manner as to commit the commis­ sion to the approval of a larger amount of stock or bonds in order to retire such notes than should legitimately Have been retired. Such act should also provltfe tot the approval by the interstate commerce com­ mission of the amount of stock and bonds to be Issued by any railroad company subject to this act upon any reorganisa­ tion, pursuant to judicial ssle or other legal proceedings. In order to prevent the Issue of stocks and bonds to an amount In excess of the fair value of the prop­ erty which is the subject of such reor­ ganization. By my direction the attorney general has drafted a bill to carry out these recommendations; which will be fur­ nished upon request to the appropriate committee whenever It may be desired. 31 ANTI-TRUST LAW AND FEDERAL INCORPORATIONS There has been a marked tendency ifa business In this country for 40 years last past toward combinations of capital and plant in manufacture, sale and trans­ portation. The moving causes have been several: First, it has rendered possible great economy; second, by a uniqn of former competitors It ha* reduced fte probability of excessive competition; and, third. If the combination lias been ex­ tensive enough, and certain methods in the treatment of competitors and cus­ tomers have been adopted, the combiners have secured a monopoly and complete control of prices or rates. A combination Successful In achieving complete control over a particular line of manufacture has frequently been called a "trust." I presume that the derivation of the word is to be explained by the fact a usual method of carrying out ihe the capital and plants of various individ­ uals, firms, or corporations engaged In the same business under the control of trustees. The Increase In the capital of a busi­ ness for the purpose of reducing the cost of production and effecting economy la the management has become as essen­ tial in modem progress as the change from the hand tool to the machine. When, therefore, we come to construe the object of congress in adopting the so-called "Sherman Anti-Trust Act" in 1890, whereby In the flrst section every contract, combination in the form of. a trust or otherwise, or conspiracy' in ire- strain t of interstate or foreign trade or commerce, is condemned as unlawful and made subject to Indictment and restraint by Injunction; and whereby In the sec­ ond section every monopoly or attempt to monopolise, and every combination or conspiracy with other persons to monopo­ lise any part of interstate trade or com­ merce, is denounced as illegal and made subject to similar punishment or re­ straint, we must infer that the evil aimed at was not the mere bigness of the en­ terprise. hot it was the aggregation of capital and plants with the express or Implied intent to restrain interstate or foreign commerce, or to monopolise It in whole or in part. Truet Not Necessarily Bad. Monopoly destroys competition entire­ ly and the restraint of the full and free operation of competition has a tendency to restrain commerce an'd trade. A com­ bination of persons, formerly engaged In trade as partnerships or corporations or otherwise of course eliminates the com­ petition that existed between them; but the incidental ending of that competition Is not to be regarded as necessarily a direct restraint of trade, unless of such an all-embracing character that the In­ tention and effect to restrain trade %re apparent from the circumstances or are expressly declared to be the object of the combination. A mere incidents! re­ straint of trade and competition la not within the Inhibition of the act, t ut it Is where the combination or conspiracy or contract is inevitably and directly a substantial constraint of competition, and a restraint of tradft, that the statute is violated. The second condition of the act is sup­ plement of the flrst. A direct restraint Of trade such as is condemned in the first section, if successful and usod to suppress competition, is one of the com­ monest methods of securing a trade monopoly, condemned in the second section. It is possible for the owners of a bual- ness of manufacturing and selling useful articles of merchandise so to conduct their business as not to violate the in­ hibitions of the anti-trust law and yet to secure to themselves the benefit of the economies of management and of produc­ tion due to the concentration under one control of large capital and many plants. If they use no other inducement than the constant low price of their product and Its good quality to attract custom, and their business Is a profitable one, they violate no law. If their aitual competitors are small /in comparison with the total capital invested, the prospect of new investments of capital by others in such a profitable business is sufficient­ ly near and potential to restrain them in the prices at which they sell their prod­ uct. But If they attempt by a use of their preponderating capital, and by a sa'e of their goods temporarily at unduly low prices, to drive out of business their competitors, or if they attempt, by ex­ clusive contracts with their patrons and threats of non-dealing, except upon such contracts or by other methods of a sim­ ilar character, to use the largeness of their resources and the extent of their output compared with the total output as a means of compelling custom and frightening off competition, then they disclose a purpose to restrain' trade and to establish a monopoly, and violate the act. Law to Suppress Abuses. The object of the anti-trust law was to suppress the abuses of business of the kind described. It was not to intetfere with a great volume of capital which, concentrated under one organisation, re­ duced the cost of production and made its profit thereby, and took no advantage of Its size, by methods akin to duress, to stifle competition with It. I wish to make this distinction as em­ phatic as possible, because I conceive that nothing could happen more destruc­ tive to the prosperity of this country than the loss of that great economy In produc­ tion which has been and will be effect­ ed in all manufacturing lines by the em­ ployment 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 enlarge­ ment of plani^ceases; and where this happens and ViOmblnatlon continues be­ yond this puuii, tile very ol»OW6 In­ tent to monopolize and not to economize. The original purpose of many combina­ tions of capital in this country was not confined to the legitimate and proper ob­ ject of reducing the cost of production. On the contrary, the history of most trades will show at times a feverish de­ sire to unite by purchase, combination, or otherwise, all the plants in the coun­ try engaged in the manufacture of a par­ ticular line of goods. The Idea was rife that thereby a monopoly) could be ef­ fected 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 plants did not prevent competition, especially where proper economy had not been pursued In the purchase and In the conduct of the business after the aggregation was com­ plete. There were enough, however, of such successful 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 absolute control of the prices of all manufactured products. Refers to Sugar Truet Case. The anti-trust statute was passed in 1890, snd prosecutions were soon begun under It. In the case of the United States vs. Knight, known as the "sugar trust case." because of the narrow scope of the pleadings, the combination sought to be enjoined was held not to be Included within the prohibition of the act, because the averments did not go beyond the mere acquisition of manufacturing plants for the refining of sugar, and did not in elude that of a direct and Intended re­ straint upon trade and commerce in the sale ant delivery of sugar across state boundaries and in foreign trade. The result of the sugar trust case was not happy, In that It gave other companies and combinations seeking a similar meth­ od of making profit by establishing In absolute control and monopoly In a par­ ticular line of manufacture, a sense of Immunity against prosecutions In the •federal jurisdiction, and where that jurisdiction Is barred In respect to a business which is necessarily commensur­ ate with the boundaries of the country, no state prosecution Is able to supply the needed machinery fOr adequate Restraint , o r p u n i s h m e n t . « • > « * > ' The supreme eourt In several of its decisions, has declined to read into the statute the wor«t "unreasonable" before "restraint of trade," on t(ie ground that the statute applies to all' restraints and does not Intend to leafe the court the discretion to determine what is a reason­ able restraint of trade. The expression "restraint of trade" comes from the com­ mon law, and at common law there were certain covenants Incidental to the car­ rying out of a main or principal con­ tract which were said to be covenants In i.t_> a 1,^.1 J ICDliaiiiv v* >*«**•%* troic irc>u ±{y cnfnwJKU b<?CBUS# hi V*' adapted to the performance of the main or principal contract, and under the general contract, and under the general language used by the supreme court In several cases, it would seem that even such Incidental covenants in restraint of Interstate trade were'%*ithii» the In­ hibition of the statute and must be con­ demned. In order to avoid such a result, I have thought and said that it might be well to amend the statute so as to exclude such covenants from its condemnation. A close examination of the later decisions of the court, however, shows quite clear­ ly In cases presenting the exact ques­ tion, that such incidental restraints of trade are held not to be within the law and are excluded by the general state­ ment that, to be within the statute, the effect upon the trade of the restraint must be direct and not merely inciden­ tal or indirect. The necessity, therefore, for an amendment of the statute so as to exclude these incidental and bene­ ficial covenants in restraint of trade held in common law to be reasonable, does not exist. In some of the opinions of the federal circuit, judges, there have been intima­ tions, having the effect. If sound, to weaken the force of the statute by in­ cluding within it absurdly unimportant combinations and arrangements, and sug­ gesting, therefore, the wisdom of chang­ ing Its language by limiting Its appll- cation to serious combinations with in­ tent to restrain competition or control prices. A reading of the opinions of the supreme court, however, makes the change unnecessary, for they exclude from the operation of the act contracts affecting interstate trade in but a small and Incidental way, and apply Che stat­ ute only to the real evil aimed at by congress. , The statute has been on the statute book now for two decades, and the su­ preme court In more than a dozen opin­ ions has construed It In application to various phases of business combinations and in reference to various subject mat­ ter. It has applied it to the union un­ der one control of two Competing Inter­ state railroads, to private manufacturers engaged in a plain attempt to control prices and suppress competition in a part of the country, including a dozen states, and to many other combinations affect­ ing Interstate trade. The value of a statute which Is rendered more and more certain in its meaning by a series of de­ cisions of the supreme court furnishes a strong reason for leaving the act as it la, to accomplish its useful purpose, even though if it were being newly en­ acted, useful suggestions as to change of phrase might be mad#. For Government Control. Many people Conducting great busi­ nesses have cherished a hope and a be­ lief that in some way or other a line may be drawn between "good trusts" and "bad trusts," and that it Is possible by amendment to the anti-trust law to make a distinction under which good combina­ tions may be permitted to organise, sup­ press competition, control prices, and do it all legally if only they do not abuse t*ie power by taking too great profit out •f the business. They pomt with force to C«*taln notorious trusts as having grown ln'o power through criminal methods by the U3t of Illegal rebates and plain cheat­ ing, and by various acts utterly violative of fc'isiness honesty or morality, and urge the Establishment of some legal line of sep* ration by which "criminal trusts" of title kind can be punished, and they, oil the other hand, be permitted under the lew to carry on their business. Now. the puMlc. and especially the, business public, ought to rid themselves of the Idea tlUt such a distinction Js practic­ able or can be Introduced into the stat­ ute.1 Certainly under the present anti-trust law no such distinction exists. It has been proposed, however, that the word "reasonable" should be made a part of the statute, and then It should be left to the court to say what is a reasonable restraint cf trade, what Is a reasonable suppression bf competition, what is a rea- sonable men-ipoly. I venture to think that this is to t*ut into the hands of the i^ourt a powt'r impossible to exercise on any conslstert principle which will In­ sure the uniformity of decision essential to Just judgment. It is to thrust upon the courts a nurden that they have no precedents to enable them to carry, and to give th*tu a power approaching arbitration, th* abuse of which might Involve our «rt»t]e judicial system lo dis­ aster. An Aid <9 Business Virtue. In considering violations of the anti­ trust law we t ught, of course, not to forget that thst, law makes unlawful, methods of carfying on business which before its passage were regarded as evi­ dence of business sagacity and svccess. and that they wfrre denounced in this act not bncause of their intrinsic immoral­ ity," but because of the dangerc<is re­ sults tftward whl< h they tended, ti e con­ centration of Industrial power fn the hands of the t<w, leading to oppres­ sion and injustice In dealing, therefore, •with many of th» men who har* used the methods condemned by the statute for the purpose of maintaining a profit­ able bus'ness, we may well facilitate a change br them li the method o* doing business, and enable them to bring it back Into the zone Of lawfulness, with­ out loslnf to the country the economy of management by which. In our domestic trade the cost of production hue been materially 'essened. and in competition with foreign manufacturers our foreign trade has bsen greatly increa«ed. Through n'l cur consideration of this grave quest'dn, hewever, we must Insist that the suppression of competition, the controlling ti prices, and tf.e monopoly or attempt to monopolise in Interstate commerce and business are not on4y un­ lawful, but contrary to the public good, and that they must be restrained and punished until enied. Asks National Corporation Law. I therefore recommend the enactment by congress of ». general law providing for the formation of corporations to en­ gage in trade ant commerce among the states and with foreign nations, protect­ ing them from nndue!- Interferenis by' the states and regulating their activities so as to prevent the recurrence, under national auspice#, of those abuses which have arisen under state control. Such a law should provide for the is«ue of stock of such corporations to an amount equal only to the cash paid In on the stock; and if the stock be issued for property, then at a fair valuation r.scer- talned under at»p*oval and supervision of federal authority after a full and com­ plete disclosure of all the facts pertain­ ing to the value »f sncli property and the Interest therein of the persons to nhom It Is proposed '.o issue stock in payment of such property. It should subject the real and personal property only of :<uch corporations t^ the same taxation an Im­ posed by the tfates within which it may be situated upm othvr similar property located therein, and it should require such corporate ms to file full and com­ plete reports of their operations with the OLDEST CHURCH TORN DOWN • • ,» - ' . • ' * - ' #truct«re Er*cted by CclumtMjf Hia V * Succumbed t®s the Ravages { £••• : of Time. oldest cjbtirch In aT^bipWi'CatlroUc tmJH by ColumUua in the city, of Sftttr "to Domingo, %vae recently toPn dowp lireaufce its v»Mlt»,W/»re insecure a»d yoyage In 1483, 3*l}atn on the second finding the fort he hid erected at Na- vldad destroyed and the garrison mas­ sacred, he retraced his tracks to a smalt but sheltered harbor near Monte CridtJ, where he disembarked his weary men and munitions and provi­ sions and bvijlt a town which he called Isabella, after his royal patroness. He erected a church, a public storehouse., known as the Idng'g house, and a res­ idence for himself, known aa the gov­ ernor's palace. These were o| stone. MsiVtJ private houses were doueiructod of wood, reedt aad fuch other mate* rial as was found In the neighborhood. King Ferdinand sent a bell Which hung In the steeple of the church, which was dedicated to St. Michael The city of Isabella was abandoned after the discovery of gold in the In­ terior and all the buildings ultimately into ruins. f ^ % ^ £! • :t., German-American Research. . The board of trustees of the Univer­ sity of Pennsylvania has authorized the establishment of ft bureau or ins tuUoa of German-American research. Waning Popularity of Silver Dollars. We are becoming m6re eastern all the time. Down at N'Yawk when ft man lays- a silver dollar cm the coun­ ter or does anything else with a silver dollar people know he's from west--just the middle weat^erhaps, :|>ut the west. For they don't use all- Iyer dollars in the east. By ai^d by it'll he the same »*ay in Cleveland ' There's a movement JWjfct way... ti-*." T ; ":" i€i*$^ iMUMre'^Db doubt,"- remarked ir. lfc Nutt secretary of the Citizens' Sav­ ings and Tfist Company, "that a great deal lesf /liver aside from the sub­ sidiary co'fis is in evidence than there was two OT three years ago. This ?s due in n great measure, I think, *o the fact that the banks try to keep fresh ifw bills on hand and supply them tfr the customers instead of th-? old, rafjged, germ laden paper that people often avoid just because It doe* not look as inviting aa silver PeoplO fn this locality are asking for ukjc« paper and. less silver all the time. It probably won't be long until , department of commerce and fal»"»r at regular intervals. Corporations organised under this act should be prohibited from acquiring %•>j hiding stockiln other cor­ porations (except for reasons upon approval by the proper federal author­ ity). thus avoiding the creation, under national auspices, of the holding com­ pany with subordinate corporations In different states which has been such an effective agency lnt> the creation of the great trusts and rfionopolles. If the prohibition of the anti-trust act against combinations In restrsjnt . 3- trade-is i^ be effectively enforced, It. is essenual that the national government shall provide for the creation of national corporations to carry on a legitimate business throughout the United States. The conflicting laws ot the different states of the union with respect to for­ eign corporations make it difficult, if not impossible, for on a corporation to comply with , their requirements, so as to carry on business In a number of different states. To the suggestion that this proposal of federal Incorporation for Industrial com­ binations Is intended to f.irnlsh them a refuge In which to continue industrial business under federal protection. It should be said tbnt the measure contem­ plated dcif net repeal the Sherman antl- i.trust law and Is not to be framed so as | to permit the dolr.g of the wrongs which It Is the purpose of that law to prevent, but only to fos«er a„«ontinuance and ad­ vance of the highest industrial efficiency without ,<permittlng Industrial abuses, Sure to Meet Opposition. / K Such a national Incorporation law will be opposed, first, by those who believe that trusts should be completely broken up and their property destroyed. It will be opposed, second, by those who doubt the constitutionality of such federal In­ corporation and even if It is valid, object to It as too great federal centralization. It will be opposed, third, by those who will Insist that a mere voluntary Incor­ poration like this will not attract to Us assistance the worst of the offenders against the anti-trust stetute and who will therefore propose instead of it a sys- 1 tem of compulsory licenses for ait fed­ eral corporations engaged in Interstate business. l.et us consider these objections in their order. The government is now trying to dissolve some of *hese combinations and it Is not the Intention of the government to desist in the least degree In Its effort to end these combinations which are to­ day monopolising the commerce of this country; that where It appears that the acquisition and concentration of property go to the extent of creating a monopoly of substantially and directly restraining interstate commerce, it la not the inten­ tion of the government to permit this monopoly to exist under federal Incor­ poration or to transfer to the protecting wing of the federal government of a state corporation now violating the Sher­ man act. But It is not, and should not bs. the policy of the government to pre- C0UNTRY AWAKE TO DANGER Immense Amount of Spent "'"Itaet Year In Fight Agatfipt . '*<: Tuberculosis. " A report issued recently by the Na­ tional Association for the Study and Prevention of Tuberculosis shows that for the treatment pf tuberculous pa- j.; J__ J-- .nnnf/vaisi nMH h A0Tl{f ttlfi jftlbj* 11CUUI m sauovui ia »MU ' mm J fhp Wair year 1909. The anti-tuberculosis asso­ ciations spent $975,889.56, the tubercu­ losis dispensaries and clinics $640,47V .64, and the various municipalities, for special tuberculosis work, spent |1,- 111,967.53. The anti-tuberculosis asso­ ciations distributed the most litera­ ture, spreading far aad wide 8,400,000 copies of circulars, pamphlets and printed matter for the purpose Qf edu­ cating the public about consumption. The health departments of Jthe differ­ ent cities also distributed more than 1,056,000 copies, which, with the work •done by state departments of health bflngs the number of pieces distribute ed during the year well over 10,000,- 000. The largest number of patients treated during the year was by the dispensaries, where 61,586 patients were given free treatment and advipe. The sanatoria and hospitals treated 37,758 patients, while antl-tuberculosls. associations assisted 16,968. ' 'tifM fARE, NOT FAIR. A BURNING ERUPTION FROM HEAD TO FEET * "Four years ago I suffered severely with a terrible eczema, being a mass of sores from head to feet and for Six weeks confined to my bed. During that time I suffered continual tor­ ture from itching and burning. After being given up by my doctor I was ad­ vised to try Cuticura Remedies. After the first bath with Cuticura Soap and application of Cuticura Ointment I en­ joyed the flrfet good sleep during my entire illness. I also used Cuticura Resolvent and the treatment was con­ tinued for about three weeks. At tbe end of that time I whs able to be about the house, entirely cared, and have felt no ill effects since. I would advise any person suffering from any form of skin trouble to try the Cuti­ cura Remedies as I know what they vent reasonable concentration of capital j dig for me. Mrs. Edward Nenning, which Is necessary to the economic devel- llla SaUna gt WatertOWII, S, opment of manufacture, trade and com- I * Jone n merce. This country has shown power j Apr, 11, 19vB, of economic production that has aston­ ished the world, and has enabled us to compete with foreign manufacturers in many markets. It should be the care of the government to permit such concen­ tration of capital while keeping open the avenues of Individual enterprise, and the opportunity for a man or corporation with reasonable capital to engage In business. If we would maintain our present business supremacy, we should give to industrial concerns an oppor­ tunity to organize or to concentrate their legitimate capital In a federal corpora* j tion, and to carry on their large business i within the lines of the law. : '>s| May Doubt Constitutionality. Second--There are those who doubt the constitutionality of such federal Incorpor­ ation. 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 regulation, congress shall Insist that It may provide and authorize 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 interstate bridges. The power of Incorporation 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 countries, may the same power not be asserted? Indeed, It Is the very fact that they carry on interstate com­ merce that makes these great industrial concerns subject to federal proseeution and control. How far as Incidental to the carrying on of that commerce It may be within the power of the federal gov­ ernment to authorize the manufacturer of goods, is perhaps more open to discus­ sion. though a recent decision of the su­ preme court would seem to answer that question in the affirmative. ' Even those who are wilting to concede that the supreme court may sustain such federal incorporation are inclined to op­ pose it on the ground of Its tendency to the enlargement of the federal power at the expense of the power of the state. It Is a sufficient answer to this argument to S3y that no bs sus~ gested which offers federal protection on the one hand and close federal supervi­ sion on the other of these great organi­ sations that are in fact federal because they are as wide as the country and are entirely unlimited 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. be­ cause the burden of complete federal su­ pervision and control that must certainly be imposed to accomplish the purpose of the incorporation would not be accepted by an ordinary business concern. The third objection, that the worst offenders will not accept federal Incorporation, is easily answered. The decrees of Injunc­ tion recently adopted In prosecutions un­ der the anti-trust law are so thorough and sweeping that the corporations af­ fected by them have but three courses before them: First, they must resolve themselves Into their component parts In the differ­ ent states, with a consequent loss to themselves of capital and effective organ­ isation and to the country of concen­ trated energy and enterprise; or second, in defiance of the law and under some secret trust they must attempt to con­ tinue their business in violation of the federal statute, and thus incur the pen­ alties of contempt and bring on an In­ evitably criminal prosecution of the Indi­ viduals named In the decree and their associates; or ' Third, they must reorganise and accept In good faith the federal charter I sug­ gest a federal compulsory license law, urged as a substitute for a federal incor­ poration law, is unnecessary except to reach that kind of corporation which, hy virtue of the considerations already ad­ vanced, will take advantage voluntarily of an incorporation law, while the other state corporations doing an Interstate business do not need the supervision or the regulation of federal license and would only be unnecessarily burdened thereby. The attorney general, at my suggestion, has drafted a federal Incorporation law, embodying the views I have attempted to set forth and It will be at the disposi­ tion ot the appropriate committees of congress. WILLIAM H. TAFT. The White House. Jan. 7. 1916." Division Superintendent--How many fare passengers did you have on your last trip? New Conductor--Fair passengers? Say, do you think all I bad to do wis to notice people's complexions? A Question te Be Consldeted. "Do you consider plagiarism (ermis- sible under any circumstances?" "Well," answered Senator Sorghum, "it's pretty hard when you find your­ self compelled to make a choice be­ tween being interesting or original^' PERRY DAVIS' PAINKILLER when (buroushly rubbed fn relieves strains SMS sprains in joints or muscles from any cause. All druggists, 96.50c sites. I^rge bottles\be cheapest. Every mother knows a lot of gopd rules for raising other people's o^il- dren.. ,; T ..... , TO CURE A COLP IN ONE DAT Take LAXAT1VB HROMO Quinine TsMsta DnigglKtMefund money it it fails to care. If. W. URUYK'Si signature is on each box. 25c Sermons are based upon texts; po­ litical speeches upon pretexts. Mrs. Wiinlow's Soothing Hyrok. For children teething, soften* the gums, reduces !•> flammatton, allay* ptln, cur«s wind colli;. SSesbottta Sometimes a man's wisdom Is due to the possession of a clever wife. a silver dollar will be as strange a sight in Cleveland as it Is in New York.--Cleveland Plain Dealer. . « Valuable Additions to Library. Accessions of almost priceless value form a part of the 167,777 volumes which were added during the year to the library or congress,, making the to­ tal number of volumes in that great li­ brary 1,702,635. The valuable addi­ tions include a set of the great Chi­ nese encyclopedia II# nese government.\ ^ ^ :^r "' Smokers find Lewis' Single Binder 5e eigar better quality than most 10c cigars. Don't blame the phonograph if it has • bad record.. DODDS K I D N E Y P I L L S J A i , v \ v X S ^ o i S . * <• *- KlDN£y,2 SC-. . KENT'S Q)>0a,..Hi! "Gusr«5 Don't Persecute your Bowels CARTER'S LITTLE LIVER PILLS fVwfer iswaH*. AA Small PilL Small Dose. ££NUiNE sunt bc*r signature: When You're Hoarse CURE Ttt US1 WttKiKt TOR Gives Immediate relief. The first dose relieves your aching throat and allays the irritation. Guaranteed to contain no opiates. Veiy palatable* AODranMslle. jg j*..ii,... I'! t <oc. > „; ' i' > ,«** , rv-r