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VOL. XLIV. NO. 41.
TIONESTA, PA., WEDNESDAY, DECEMBER 6, 1911.
$1.00 PER ANNUM.
THE FOREST REPUBLICAN.
R
EST
BOROUGH OFFICERS.
Burgess, i. D. W. Reck.
Justices of the Peace O. A. Randall, D.
W. Clark.
Qouncttmen.J. W. Landers, J. T. Dale,
O. R. Robinson, Wm. Smearbaugh,
R. J. Hopkins, W. O. Calhoun, A. H.
Kelly.
Constable Charles Clark.
Collector W. H. Hood.
School Directors J. O. Scowden, R. M.
Herman, Q Jamleson, J. J. Landers, J.
C. Uelst, Joseph Clark.
FOREST COUNTY OFFICERS.
Member of Congress P. M. Bpeer. .
Member of Senate J. IC. P. Hall.
Assembly W. J. Campbell.
President Judge W. D. Hinckley. .
Associate Jwlges-P. C. Hill, Samuel
Aul.
Pr othonotary, Register Recorder, Ac.
-J. C. deist.
HherifT-S. R. Maxwell.
Treasurer Geo. VV. Uoleman.
Commissioners -Vim. H. Harrison, J.
M. Zuendel. H. H. McClellan.
District ttorney-V. A. Carrlngnr.
Jury Commissioners Ernest Slbble,
Lewis Wagner.
Coroner Dr. M. C Kerr.
County Auditors George H. Warden,
A. C. Gregg fad J. P. Kelly.
County Surveyor D. W. Clark.
County Superintendent J. O. Carson.
Kecnlar Terau of Ceart.
HVoirth Miinrlnv of FeliruarV.
Third Monday of May.
Fourth Monday of September.
Third Monday of November.
Regular Meetings of County Cominla
sloners 1st and 3d Tuesdays of month.
Ckarch ana Habbnlh Ncfcaal.
Presbyterian Sabbath School at 9:45 a.
m. : M. B. Sabbath School at 10:00 a. m.
Preaching in M. E. unurcn every oao
bath evening by Rev. W. S. Burton.
Preaching In the F. M. Church every
Sabbath eveuing at thetfsual hour. Rev.
O. A. Garrett, PtiHtor.
Preaching in the Presbyterian church
every Sabbath at 11:00 a. ni. and 7:30 p.
m. Rev. H. A. llailey, Pastor.
The regular meetiugs of the W. C. T.
(T. are held at the headquarters on the
second and fourth Tuesday of each
m nth.
BUSINESS DIRECTORY.
TI' N EST A LODGE, No. 869, 1. 0. 0. F.
M enta every Tuesday evening, in Odd
Fellows' Hall, Partridge building.
CAPT. OEORGR STOW POST. No. 274
G. A. R. Meets 1st Tuesday after
noon of eauh mouth at 3 o'clock.
CAPT. GEORGE STOW CORPS, No.
137, W. R. C, meets first and third
Wednesday evening of each month.
TF. RITCHEY.
. ATTORN EY-AT-LAW,
Tionesta. Pa.
ni a. iJimnucn,
ilJ. Attorney and Counsellor-at-Law.
Office over Forest County National
Bank Building, TIONESTA, PA.
CURTIS M. SHAWKEY,
ATTORN E Y-AT- LA W,
Warren, Pa.
Practioe in Forest Co.
AO BROWN,
ATTORNEY-AT-LAW
Office In Arner Building, Cor. Elm
and Bridge Sts., Tionesta, Pa.
FRANK S. HUNTER, D. D. 8
Rooms over Citizens Nat. Rank,
I ION EST A, PA.
DR. F.J. BOVARD,
Physician A Surgeon,
TIONESTA, PA.
Eyes Tested and Glasses Fitted.
D
R. J. B. BIGGINS.
Physician and Surgeon,
OIL CITY, PA.
HOTEL WEAVER,
JOSEPH RENSI, Proprietor.
Modern and up to-date in all its ap
pointments. Every convenience and
comfort provided for the traveling public
CENTRAL HOUSE,
R. A. FULTON, Proprietor.
Tlonneta, Pa. This Is the mostceutrally
located hotel in the place, and lias all the
modern Improvements. No pains will
be spared to make it a pleasant stopping
place for the traveling public . '
pHIL. EMERT
FANCY BOOT A SHOEMAKER.
Shop over R. L. Haslet's grocery store
on Elm street.. Is prepared to do all
Kinds of custom work from the finest to
the ooarsest and guarantees his work to
give perfect satisfaction. Prompt atten
tion given to mending, and prices rea
sonable. Fred. Orettonborger
" GENERAL
BLACKSMITH & MACHINIST.
All work pertaining to Machinery, En
gines, Oil Well Tools, Gas or Water Fit
tings and General Blacksmlthlug prompt
ly done at Low Rates. Repairing Mil)
Machinery given special attention, and
satisfaction guarauteeu.
Shop In rear of and lust west of the
Huaw House, riuioute, ra.
Your patronage solicited. 4
FRED. ORETTENBERGER
(3 to the TioDesta
Racket Store
-FOli-
Holiday-Goods
Hand Painted China.
Japanese China.
Decorated Glassware.
Christmas Decorations.
Post Cards.
Dolls, Toys, Games, &c.
G. F. RODDA,
Next Door to the Fruit Store, Elm
street, lionesta, Pa.
MESSAGE OF.
THE PRESIDENT
Mr, Tall Champions the Anti
trust Statute,
NEW REMEDIES SUGGESTED,
Not Repeal, or Amendment, but Sup
plemental Legislation NeededThe
Tobacoo Trust Decision an Effective
One Federal .Incorporation Recom
mended and a Federal Corporation
Commission Proposed The Test of
"Reasonableness."
To the Semite uud House of Repre
sentatives:
This message Is the first of several
which 1 sbull send to congress during
the Interval between the opening of
its regular session and Its adjourn
ment for the Christ inns holidays. The
amount of Information to I comniu-
doited as to the operations of the
government, the number of Important
subjects culling for comment by the
executive nnd the transmission to con
gress of exhaustive reports of special
commissions make It Impossible to In
clude In one message of n reasonable
length 11 discussion of the topics that
ought to be brought to the utteutlon
of the national legislature at Its first
regular session.
The Anti-trust Law The Supreme
Court Deoisions.
In May Inst the supreme court hand
ed down decisions In the suits in equi
ty brought hy the United States to en
Jolu 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 anil serve to advise the busi
ness world authoritatively of the
scope and operation of the anti-trust
act of 1800. The decisions do not de
part In auy substantial way from the
previous decisions of the court In con
struing and applying this Important
statute, but they clarify those deel
slous by further defining the already
admitted exceptions to the literal con
sti'uctlon of the not. By the decrees
they. furnish a useful precedent ns 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 nnd to pre
serve the benefit, freedom and spur of
reasonable competition without loss of
real efficiency or progress.
No Chang In the Rule of Decision,
Merely In Its Form of Expreeeion.
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 umong the sev
eral states or tvltb foreign nations"
nnd In the second declares guilty of a
misdemeanor "every persou 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 n transporta
tion rate agreement between Inter
state railroad companies, it was held
that it 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. It
was plain from the record, however,
that the contracts complained of In
those cases would not have been deem
ed reasonable nt common law. In sub
sequent cases the court said that the
statute should be given u reasonable
construction nnd refused to Include
within Its Inhibition certain contrac
tual restraints of trade which It. de
nominated ns Incidental or as indirect.
These enses of restrant of trade that
the court excepted from the operation
of the statute were instances which
nt 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 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
reasonable, ond this without vorylni?
in the slightest the actual scope and
effect of the statute in other words,
all the cosesunder the statute which
have now been decided would have
been decided the same way If the
court had originally accepted in its
construcihon the rule nt common law.
It has been said that the court by in
troducing into the construction of the
statute common law distinctions ba
emasculated It This Is obviously un
true. By its Judgment every contract
and combination In restraint of Inter
state trade made with the purpose or
necessary effct of controlling prices
by stifling competition or of establish
ing In whole or In part o monopoly of
such trade Is condemned by the stat
ute ThP most extreme critics cannot
instance n case that ought to be con
demned under the statute which is not
brought within Its terms ns thus con
strued. The suggestion Is also made that the
supreme court by Its decision In the
lut two cases has committed to the
court the undefined and unlimited dis
cretion to determine whether a case of
restraint of trade Is within the terms
t the statute. This la wholly untrue.
A reasonable restraint of trade at com
mon law Is well understood and li
clearly defined. It does not rest in the
discretion of the court. It must be
limited to accomplish the purpose of a
lawful main contract to which In order
that It shall be enforceable nt ull 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 commiin law
to contracts or combinations or con
spiracies In restraint of trade whose
purpose was or whose necessary effect
would be to stifle competition, to con
trol prices or establish monopolies.
The courts never assumed power to
say that such contracts or combina
tions or conspiracies might be lawful
If the parties to them were only mod
erate in the use of the power thus se
cured ond did nut exact from the pub
lic too great and exorbitant prices. It
is true thut many theorists nnd others
engaged 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
sions of the latest two cases from
vhlch such a dangerous theory of Ju
dicial discretion In enforcing this stat
ute can derive the slightest sanction.
Force and Effectiveness of Statute a
Matter of Growth.
We have been twenty one years mak
ing this statute effective for the pur
poses for which It was enncted. The
Kulght cuse was discouraging ond
seemed to remit to the states the whole
available power to attack and suppress
the evils of the trusts. Slowly, howev
er, the error of that Judgment was cor
rected, and only In the lust three or
four years has the heavy hand of the
law been luld upon the great Illegal
combinations that have exercised such
an absolute dominion over many of our
industries. Criminal prosecutions have
beeu brought, and a number are pend
ing, but Juries have felt uverse to con
vlctlng for Jail sentences nud Judges
have been most reluctant to Impose
such sentences on men of respectable
standing In society whose offense has
been regarded us merely statutory
Still, as the offense becomes better un
derstood and the committing of It par
takes more of studied and deliberate
defiance of the law we can be confi
dent that Juries will convict Individu
als nnd thut Jul! sentences will be im
posed. The Remedy In Equity by Dissolution.
in the Standard Oil case the supreme
and circuit courts fouud the comblua
tlon to be a monopoly of the Interstate
business of refilling, transporting uud
marketing petroleum and Its products,
effected and muintuined through thlr
ty-seven different corpora tious, the
stock of which was held by a New Jer
sey company, it In effect commanded
the dissolution of this combination, di
rected the transfer and pro rata distri
bution by the New Jersey company of
the stock held by it in the tblrty-seveu
corporations to and among its stock
holders, nnd the corporations and Indi
vidual defendants were enjoined from
conspiring or combining to restore
such monopoly, and nil agreements be
tween the subsidiary corporations tend
lng to produce or bring ubout further
violations of the act were enjoined.
In the tobacco case the court found
that the individual defendants, twen-ty-niue
In number, had been engaged
in a successful effort to acquire com
plete dominion over the manufacture,
8a le nnd distribution of tobacco in this
country nnd abroad and that this had
been done by combinations made with
a purpose and effect to stifle competi
tion, control prices nnd estublish a
monopoly, not only In the manufacture
of tobacco, but also of tin foil nud lic
orice used in its manufacture and of
its products of cigars, cigarettes and
Bnuffs. The tobacco suit preseuted a
far more complicated nnd difficult case
than the Standard Oil suit for n 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, ns In the case of the
Standard Oil trust. The main company
was the American Tobacco company,
a manufacturing, selling and . holding
company. The plan adopted to de
stroy the combination nnd restore com
petition Involved the redivlsion of the
capital and plants of the whole' trust
between some of the compnnles con
stituting the trust and new compnnlel
organized for the purposes of the de
cree and made parties to it and num
bering, new and old. fourteen.
Situation After Readjustment.
The American Tobacco company
(old), readjusted capital $02,000,000:
the Liggett & Meyers Tobacco company
(new), cnpltal $07,000,000; the P. Lorll
lnrd company (newt, capital $47.0t!0.
000. nnd the R. J. Reynolds Tobacco
company (old), capital $7,r25.0(0. are
chiefly engaged In the manufacture
nnd sale of chewing and smoking to
bacco and clgnrs. The former oue tin
foil compnny Is divided into two, one
of $S25,000 capital nnd the other of
WOO.OOO. The one snuff company Is
divided Into three companies, one with
a copltul of $15,000,000. another with a
capital of $8,000,000 and a third with
n cnpltal of $8,000,000. The licorice
compnnles are two, one with a capital
of $".758.300 and onother with a cnpl
tal of $2,000,000. There Is nlso the
British-American Tobncco company, a
British corporation, doing business
abroad with a capital of $2ii.MK).(NU)
the Torto Rlcan Tobacco company,
with n capital of $1,800,000, and the
corporation of United Cigar Stores
with a capital of SD.OOO.OOO.
Under this arrangement each of the
different kinds of business will be dls
trlbuted between two or more compa
nles with a division of the prominent
brands In the same tobacco products
so as to make competition not onl
possible, but necessary Thus tin
smoking tobncco business of the conn
try Is divided so that the present lu-
flepenaent companies have 21. o!) per
cent, while the American Tobacco com
pany will huve 33.08 per cent, the Lig
gett & Meyers 20.00 per cent, the Lorll
lard company 22.82 per cent nnd the
Reynolds company 2.00 per cent. The
stock of the other thirteen companies,
both preferred and common, bns been
taken from the defendant American
Tobacco company nnd bos been dis
tributed among Its stockholders. All
covenants restricting competition hnve
been declared null and further per
formance of them has been enjoined.
The preferred stock of the different
companies has now been given voting
power which was denied It under the
old organization. The ratio of the pre
ferred stock to the common was as 78
to 40. This constitutes a very decided
change in the character of the owner
ship nnd control of each compnny.
In the original suit there were twenty-nine
defendants, who were charged
with being the conspirators through
whom the illegal combination acquired
and exercised Its unlawful dominion.
Under the decree these defendants will
bold amounts of stock in the various
distributee companies ranging from 41
per cent ns a maximum to 2SV4 per
cent as a minimum, except In the case
of one small company, the Porto Rlcan
Tobacco company, In which they will
hold 45 per cent. The twenty-nine in
dividual defendants are enjoined for
three years from buying any stock ex
cept from ench other, und the group Is
thus prevented from exteudlng Its con
trol during that period. All parties to
the suit nnd the new compnnles who
are made parties are enjoined perpet
ually from in any way effecting any
combination between any of the com
panies in violation of the statute by
way of resumption of the old trust
Ench of the fourteen compnnles is en
joined from acquiring stock in nny of
the others. All these companies are
enjoined from having common direc
tors or officers, or common buying or
soiling ngents, or common offices, or
lending money to ench other.
8ize of New Companies.
Objection was made by certain in
dependent tobacco compnnles that this
settlement wns unjust because it left
companies with very large capital in
active business nnd that the settle
ment that would be effective to put all
on an equality would be a division of
the cnpltal and plant of the trust into
small fractions In amount more near
ly equal to that of euch of the inde
pendent companies. This contention
results from a misunderstanding of
the anti-trust law and Its purpose. It
Is not Intended thereby to prevent the
accumulation of Inrge capital in busi
ness enterprises In which such a com
bination can secure reduced cost of
production, sale nnd distribution. It
Is directed against such an aggrega
tion of capital only when Its purpose
is that of stifling competition, enhanc
ing or controlling prices and establish
ing a monopoly. If we shall have by
the decree defeated these purposes
and restored competition between the
large units into which the capital and
plant have been divided we shall have
accomplished the useful purpose of
the statute.
Confiscation Not the Purpose of the
Statute.
It Is not the purpose of the statute
to confiscate the property nnd cnpltal
of the offending trusts. Methods of
punishment by fine or Imprisonment
of the individual offenders, by fine of
the corporation or by forfeiture of Its
goods in transportation are provided,
but the proceeding In equity Is a spe
cific remedy to stop the operation of
the trust by Injunction and prevent
the future use of the plant and capital
in violation of the statute.
Effectiveness of Decree,
I venture to sny thnt not in the his
tory of Amerlcnn Inw has a decree
more effective for such a purpose been
entered by a court than that against
the tobncco trust As Circuit Judge
Noyes snld In his Judgment approving
the decree:
"The extent to which it has been
necessary to tear opart this combina
tion nnd force It Into new forms with
the attendant burdens ought to demon
strate thnt the federal nntl-irust statute
Is a drastic statute which accomplishes
effective results, which so long as It
stands on the statute books must be
obeyed and which cannot be disobey
ed without Incurring farrcachlng pen
alties. And, on the other hand, the
successful reconstruction of this or
ganization should tench that the effect
of enforcing this statute is not to de
stroy, but to reconstruct; not to de
molish, but to recreate In accordance
with the conditions which the congress
has declared shall exist among the
people of the United States."
Common Stock Ownership.
It has been assumed that the pres
ent pro rata and common ownership In
all those companies by former stock
holders' of the trust would Insure a
continuance of the same old single con
trol of all the companies into which
the trust has by decree been disinte
grated. This Is erroneous and is based
upon the assumed Inetlicacy and lnnoc
uousness of Judicial injunctions. The
companies are enjoined from co-opera
tlon or combination; they have differ
ent managers, directors, purchasing
and sales agents If all or many of
the numerous stockholders, reaching
Into the thousands, attempt to secure
concerted action of the compnnles with
a view to the control . of the market
their number Is so large that such an
nttempt could not well be concealed,
and Its prime movers and all Its partic
ipants would be at once subject to con
tempt proceedings nnd imprisonment
of n summary character The Immedi
ate result of the present situation will
necessarily be activity by all the com
panies under different managers, and
then competition must follow or there
will be activity by one company and
stagnation by another. Only a short
time will inevitably lend to u change
In ownership of the stock, ns all op
portunity for continued co-operattoa
must disappear. Those critics who
speak of this disintegration lu the trust
as a mere change of garments have not
given consideration to the Inevitable
working of the decree nnd understand
little the personal danger of attempt
ing to evade or set nt naught the sol
emn Injunction of n court whose object
Is mnde plain by the decree and whose
Inhibitions are set forth with a detail
and comprehensiveness unexampled In
the history of equity Jurisprudence.
Voluntary Reorganizations of Other
Truite at Hand.
The effect of these two decisions has
led to decrees dissolving the combina
tion of manufacturers of electric
lamps, a southern wholesale grocers'
association, on Interlocutory decree
against the powder trust, with direc
tions by the circuit court compelling
dissolution, and other combinations of
a similar history nre now negotiating
with the department of Justice looking
to a disintegration by decree nnd re
organization in accordance with law.
It seems possible to bring about these
reorganizations without general busi
ness disturbance.
Movement For Repeal of the Anti
trust Law.
But now thnt the anti-trust act Is
seen to be effective for the accomplish
ment of the purpose of Its enactment
we nre met by a cry from many-different
quarters for Its repenl. It is said
to be obstructive of business progress,
to be an attempt to restore old fash
ioned methods of destructive competi
tion between small units and to make
impossible those useful combinations
of capital and the reduction of the cost
of production that are essential to con
tinued prosperity nnd normal growth.
In the recent decislous the supreme
court makes clear that there Is noth
ing in the statute which condemns
combinations of cnpltal or mere big
ness of plant organized to secure econ
omy in production nnd a reduction of
its cost It is only when the purpose
or necessary effect of the organization
and maintenance of the combination
or the nggregntion of Immense size nre
the stifling of competition, actual and
potential, and the enhancing of prices
and establishing a monopoly that the
statute is violated. Mere size is no
sin ogalnst the Inw. The merging of
two or more business plnnts necessari
ly eliminates competition between the
units thus combined, but this elimina
tion Is in contravention of the statute
only when the combination Is mnde for
purpose of ending this particular com
petition In order to secure control of
and enhance prices and create a mo
nopoly. Lack of Definitenesa In the Statute.
The complaint is mude of the stat
ute that it is not sufficiently definite
In its description of thut which is for
bidden to enable business men to avoid
Us 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 thnt It
was a violation of the statute and thnt
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 cupital 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 a 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 tho plant they are creating,
then they cannot be convicted at the
time the union is made, nor can they
be convicted Inter unless It happen
thnt Inter on they conclude to sup
press competition nnd take the usual
methods for doing so nnd thus estab
lish for themselves a monopoly. They
con in such a case hardly complain If
the motive which subsequently Is dis
closed is attributed by the court to the
original combination.
New Remedies Suggested.
Much Is said of the repeal of this
statute nnd of constructive legislation
intended to accomplish the purpose
and blaze a cleor path for honest mer
chants and business men to follow. It
niny be Unit such u plan will be
evolved, but I submit that the discus
sions which have been brought out In
recent days by tho fear of the con
tinued execution of the anti-trust law
have produced nothing but glittering
generalities nnd have offered no line
of distinction or rule of action as defi
nite and as clear ns thnt which the su
preme court Itself lays down lu en
forcing the statute.
Supplemental Legislation Needed, Not
Repeal or Amendment.
I see no oblectlon, ond Indeed I can
see decided advantages. In the enact
ment of a law which shnll describe
and denounce methods of competition
which are unfulr nud nre badges of the
unlawful purpose denounced In the
anti-trust Inw. The attempt and pur
pose to suppress a competitor by un
derselling lit 111 at a price so unprofita
ble as to drive him out of business or
the making of exclusive contracts with
ustomors tinder which they nre re
quired to give up association with oth
er monufneturers ond numerous kin
dred methods for stifling competition
and effecting monopoly should bo de
scribed with sufficient nccuracy In a
criminal statute on the one hand to
enable the government to shorten Its
task by prosecuting single misdemean
ors Instead of on entire conspiracy and
on the other band 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. 7, 1010, I ventured to point out
Tie disturbance to business thnt would
irobnbly attend the dissolution of these
((Tending trusts. I snld:
"But such on 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
tho now flowing sources of capital
from its places of hoarding and pro
duce a holt In our preseut 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 nnd discussion of congress
is whether, in order to avoid such a
possible business danger, something
cannot be done by which these busi
ness combinations may be offered a
means, without great financial dis
turbance, of changing the character,
organization nnd extent of their busi
ness Into one within the lines of the
low under federal control nnd super
vision, securing compliance with the
antitrust statute.
"Generally In the industrial combina
tions called 'trusts' the principal busi
ness Is the sale of goods in many states
and In foreign markets In other words,
the interstate nnd 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
nnd sell In Interstate nnd foreign com
merce the products of useful manufac
ture under such limitations as will se
cure a compliance with the null-trust
low. It is possible so to frame 11 stat
ute that, while It offers protection to a
federal company against harmful, vex
atious nnd unnecessary invasion by the
states, it shall subject It to reasona
ble taxation nnd control by the states
with respect to Its purely local busi
ness. "Corporations organized under this
net should be prohibited from acquir
ing nnd holding stock In other corpo
rations (except for special reasons,
upon approval by the proper federal
authority), thus avoiding the crentlon
under national auspices of the holding
company with subordinate corporations
in different states, which has been
such nn effective agency In the crea
tion of tho great trusts and monopo
lies. "If the prohibition of the nntl-trust
net against combinations lu 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 a le
gitimate business throughout the Unit
ed States. The conflicting laws of tho
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 curry on business lu a
number of different states."
I renew the recommendation of the
enactment of u general law providing
for the voluntary formation of cor
porations to engage lu trade and com
merce among the states und with for
elgu nations. Every argument which
was then ndvanced for such a Inw und
every explanation which was nt that
time offered to possible objections has
been confirmed by our experience since
the enforcement of the anti-trust stat
ute has resulted In the actual dissolu
tion of active commercial organiza
tions. It is even more manifest now than
It wns then that the denunciation of
conspiracies In restraint of trnde
should not nnd does not mean the de
nial of organizations large enough o
be Intrusted with our Interstate nod
foreign trade. It has been made more
clear now than It wns then that a
purely negative statute like the anti
trust law may well be supplemented
by specific provisions for the building
up nnd regulation of legitimate na
tional and foreign commerce.
Government Administrative Experts
Needed to Aid Courts U Trust
Dissolutions.
The drafting of the decrees lu the
dissolution of the present tiusts. with
a view to their reorganization Into le
gitimate 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 suitable reorganiza
tion 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
nn expert from the bureau of corpora
tions. Federal Corporation Commission Pro
posed. I do not set forth In detail the terms
nnd sections of n statute which might
supply the constructive legislation per
mitting nnd aiding the formation of
combinations of capital Into federal
corporations. They should be subjecf
to rigid rules as to their organization
nnd procedure. Including effective pub
licity, nnd to the closest supervision ns
to the Issue of stock and bonds by nn
executive bureau or commission In the
department of commerce and labor, to
which In times of doubt they might
well submit their proposed plans for
future business. It 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 fre
quent consultation with the bureau or
commission In charge of the Incorpora
tion ns to the legitimate purpose of Its
transactions would offer it ns great se
curity agniust 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 ot
trusts within the law. it should be ani
executive tribunal of the dignity andi
power of the comptroller of the cur-i
rency or the lnterstnte commerce com-i
mission, which now exercises Bupervls-f
ory power over importont classes of
corporations under federal regulation.
The drafting of such a federal In-'
corporation low would offer ample op-l
portunlty to preveut many manifest;
evils in corporate management today, t
Including Irresponsibility of control In'
the hands of the few who are not the
real owners. ;
Incorporation Voluntary. :
I 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 Hues of tBe
law. Other large combinations that!
fall to take advantage of the federal'
Incorporation will not have a right to
complain if their failure is ascribed to,
unwillingness to submit their transac
tions to the careful officlnl scrutiny,
competent supervision nnd publicity
attendant upon the enjoyment of such1
a charter.
Only Supplemental Legislation Needed.'
The opportunity thus suggested for
federal Incorporation, It seems to me.
Is suitable constructive legislation
needed to facilitate the squaring of
great industrial enterprises to the rule
of action laid down by the anti-trust
law. This statute as construed by the
supreme court must continue to be the
line of distinction for legitimate busi
ness. It must bo enforced unless we
are to banish 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 tho Anti-trust Act '
The anti-trust act is the expression
of the effort of a freedom loving peo
ple to preserve equality of opportunity.
It Is the result of the confident deter
mination of such n people to maintain
their future growth by preserving un
controlled and unrestricted the enter
prise of the Individual, his Industry,
his Ingenuity, tils Intelligence and Ms
Independent courage.
For twenty years or more this stat
ute has been upon the statute book.
All knew Its general purpose and ap
proved. : Mnny of Its vlolntors were
cynical over Its assumed Impotence.
It seemed Impossible of enforcement
Slowly the mills of the courts ground,
nnd only gradually did the majesty of
tho Inw . nssert Itself. Many of Us
statesmen-authors died before It be
come a living force, and they and oth
ers sow the evil grow which they had
hoped to destroy. Now Its efficacy Is
seen; now Its power Is benvy; now Its
object Is near achievement. Now we
hear the coll for Its repeol on the plea
that It Interferes with business pros
perity, nnd we are advised In most
general terms how by some other stat
ute nnd In some other wny the evil
we nre Just stamping out can be cured
If we only ahnndon this work of twen
ty yenrs nnd try another experiment
for another term of yenrs.
It is snld thnt the act has not done
good. Cnn this be said in the face of
the effect of the Northern Securities
decree? Tlmt decree was in no way.
so drastic or inhlbltlve in detail as ei
ther the Standard Oil decree or the
tobacco decree. But did It not stop
for nil time the then powerful move
ment townrd the control of all the
rnlironds of the country in a single
hand? Such a one ninn power could
not have been a healthful Influence In
the republic, even though exercised
under the general supervision of an
lnterstnte commission.
Do we desire to make such ruthless
combinations and monopolies lawful?
When all energies nre directed, not to
ward tho reduction of the cost of pro
duction for the public benefit by n
healthful competition, but toward new
ways and means for making perma
nent in a few hands the absolute con
trol of the conditions ond prices pre-,
vnlllng In tho whole field of industry,
then individual enterprise and effort
will Ihj paralyzed ond the spirit of
commercial freedom will be dead.
WM. II. TAFT.
The White House. Dec. 6, 101L
Got a Free Lecture,
Tho agent for a handsomely Illus
trated book to be sold on long time
credit a feast to the Intellect and an
adornment to any library--leaned
against tho side of the house, caught
his breath, clinched his fist and looked
skyward.
"What's the mntter?" asked a police
man. "I've met the meanest man," he an
swered. "I've heard of hm, and I've
rend about him In the papers, but I
never expected to meet him face to
face."
"Where Is he?"
"Up In that building."
"How do you know he's the meanest
man?"
"Hy the way ho acted. I showed
him this work of art lectured on it
for half an hour, pointed out the en
gravings, and when I hinted it would
be a good tiling to order what do you
think he sold?"
"1 dou't know."
"fie said ho never bought books,
he didn't have to. He just waited for
Borne Idiot of an ageut to come along
and tell him all that was In 'em and
turn over the leaves while be looked
nt the pictures. Nice, Isn't ltf Ep
wortn Herald.