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PUB
VOL. XLIV. NO. 41.
TIONESTA, PA., WEDNESDAY, DECEMBER 6, 1911.
$1.00 PER ANNUM.
THE FOREST REPUBLICAN.
Fores
RE
LICAN.
BOROUGH OFFICERS.
Burgess. 3. D. W. Reck.
' Justices of the Peace O. A. Randall, D.
W. Clark.
' Counctmen. J. W. Tenders, J. T. Dale,
G. B. Robinson, Wm. Smearbaugh,
R. J. Hopkins, W. O. Calhoun, A. B.
Kelly.
Qmslable Charles .Clark.
Collector W. H. Hood.
School Directors J. O. Soowden, R. M.
Herman, Q Jamieson, J. J, Landers, J.
O. UelHt, Joseph Clark.
FOREST COUNTY OFFICERS.
Member of Congress P. M. Speer. ...
Member of Senate 3. It. P. Hall.
Assembly W. J. Campbell.
President Judge W. D. Hinckley.
Associate Judges P. C. Hill, Samuel
Aul.
Prothonotary, Register Recorder, ro.
-J. C. OeiHt.
Sheriffa. R. Maxwell.
'Preasurer Geo. W. Holeman.
Commissioners -Wm. H. Harrison, J.
M. Zuendel, II. II. McClellan.
District Attorney-M. A. Oarrlnger.
Jury Oovimissioners Ernest Hlbble,
Lewis Wagner.
Coroner Dr. M. C Kerr.
Count u iMlttors-Qnorge H. Warden,
A. C. Gregg sad J. P. Kelly.
County Surveyor D. W. Clark.
County Superintendent J. O. Carson.
Kcanlar Terns f Ceart.
Fourth Monday of February.
Third Monday of May.
Fourth Monday of September.
Third Monday of November.
Regular Meetings of County Cnmmls
sloners 1st and 8d Tuesdays of month.
Cksreh aa4 Habbath Mebsel.
Presbyterian Sabbath School at 0:45 a.
m. i M. B. Sabbath School at 10:00 a. m.
Preaching in M. E. Church every Sab
bath evening by Rev. W.S. Burton.
Preaching in the F. M. Churoh every
Sabbath evening at the dfeual hour. Rev.
U. A. Garrett, Pastor.
Preaching in the Presbvterian church
every Sabbath at 11:00 a. m. and 7:30 p.
m. Hev. H. A. Bailey, Pastor.
The regular meetings or the W. C. T.
U. are held at the headquarters on the
aeoond and fourth Tuesdays of each
mi nth.
BUSINESS DIRECTORY.
TV N ESTA LODGE, No. 869, 1. 0. 0. F.
M ents every Tuesday evening. In Odd
Fellows' Hall, Partridge building.
CAPT. GEORGE STOW POST, No. 274
U. A. R. Meets 1st Tuesday after
noon jof each mouth at 3 o'clock.
CAPT. GEORGE STOW CORPS, No.
137, W. R, C, meets first and third
Wednesday evening of each month.
TF. RITCflEY,
. ATTORNEY-AT-LAW,
Tionesta. Pa.
MA. CARRINQER,
Attorney and C'ounsellor-at-Lav.
Olfine over Forest County National
Bank Building, TIONESTA, PA.
CURTIS M. SHAWKEY,
ATTORN E Y-AT- LA W,
Warren, Pa.
Praotioe in Forest Co.
AC BROWN,
ATTORNEY-AT-LAW.
Office In Arner Building, Cor. Elm
and Bridge Sta., Tionesta, Pa. '
FRANK 8. HUNTER, D. D. 8
Rooms over Citizens Nat. Rank,
I ION ESTA, PA.
DR. F.J. BOVARD,
Physician A Surgeon,
TIONESTA, PA.
Eyes Tested and. Glasses Fitted.
D
R. J. B. 8IGGINS,
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.
Tlonsela, Pa. This 1b the mostcentrally
located hotel In the place, and has all the
modern Improvements. No pai,ns will
be spared to make it a pleasant stopping
place for the traveling public
pHIL. EMERT
FANCY BOOT SHOEMAKER
Shop over R. L. Haslet'a grocery' store
on Elm street.. Is prepared to do ail
Kinds of ouHtom work from the finest to
the coarsest aud guarantees his work to
give perfect satisfaction. Prompt atten
tion given to mending, and prices rea
sonable. !
Fred. Orettenborger
GENERAL "
BLACKSMITH & MACHINIST.
All work pertaining to Machinery, En
gines, Oil Well Tools, Gas or Water Fit
tings and General Blacksmithlug prompt
ly done at Low Rates. Repairing Mill
Machinery given special attention, and
satisfaction guaranteed.
- Shop in rear of and hiBt west of the
Shaw House, Tldioute, Pa.
Your patronage solicited.-
FRED. GRETTENBERGER
(Jo to the Tiooeata
Backet Store
-FOR-
Holiday Goods
Hand Painter Cbioa.
Japanese China.
Deoorated Glassware.
Christmas Decorations.
Post Cards.
Dolls, Toys, Games, Ac.
Gv F. RODDA,
Next Door to the Fruit Store, Elm
Street, Tionesta, Pa.
MESSAGE OF.
THE PRESIDENT
Mr. Taft Champions the Anti
trust Statute.
NEW REMEDIES SUGGESTED,
Not Repeal, or Amendment, but Cip
plemsntsl Legislation Needed The
Tobaooo Trust Decision an Effsotive
One Federal .Incorporation Recom
mended and a Federal Corporation
Commission Proposed The Test of
"Reasonableness."
To the Senate and 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 Christmas bolldays. The
nujouut of information to be commu
Diluted as to the operations of the
government, the number of Important
subjects railing for comment by the
executive and the transmission to con
gress of exhaustive reports of speclnl
commissions make it Impossible to In
clude In one messoge of n reasonable
length u discussion of the topics that
ought to be brought to tin- utteution
of the national legislature at its first
regular session.
The 'Anti-trust Law The Supreme
Court -Deoisions.
In May last the supreme court brnd
ed down decisions In the suits in equi
ty brought by the United States to en
join the further maintenance of the
Standard Oil trust and of the Ameri
can Tobacco trust and to secure their
dissolution. The decisions are epoch
maklng and serve to advise tbe busi
ness world authoritatively . of the
scope and operation of tbe 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 dec!
sions by further defining the already
admitted exceptions to tbe literal con
sti'uctlon of the net. By the decrees
they, furnish a useful precedent ns to
the proper method of dealing with the
capital nnd .property, of Illegal trusts
These decisions suggest the need and
wisdom of additional or supplemental
legislation to make It easier for tbe
entire business community to. square
with the rule of nctlon and . legality
thus, finally . established and to pre
serve the benefit, freedom and 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 Its first section de
clares to be Illegal "every contract,
combination In the form of trust or
otherwise .or- conspiracy In restraint
of trade or commerce among the sev
eral states or with foreign nations"
and In the second declares guilty of a
misdemeanor "every person who shall
monopolize or attempt to monopolize
or combine or conspire with any other
person to monopolize any part of the
trade or commerce of the several states
or with foreign nntions."
In two early cases, where the statute
was Invoked to enjoin n transporta
tion rate ngrcemeut between Inter
state railroad companies, It was held
that It was no defense to show that
tbe agreemeut 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-1
blnntlons In restraint of trade, whether
reasonable at common law or hot. It
was plain from tbe record, however,
that the contracts complained of In
those cases would not have been deem- j
ed reasonable at common law. In sub
sequent cases the court said that the
Btatute 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 ns indirect.
These cases of restrsnt of trade that
the court excepted from the operation
of the statute were instances which
at common law would have been call
ed reasonable. In the Staudn'rd Oil
and tobacco cases, therefore, the court
merely adopted the tests of the com
mon law and In defining exceptions to
tbe literal annllratlon of the statute
only "substituted for the test of belng4
Incidental or Indirect that of being
reasonable, and this without varying
in tbe slightest the actual scope and
effect of tbe statute In ether words,
all the cases under tbe statute which
have now been decided would have
been decided the same way If 'the
court had originally accepted In its
construction the rule at common law.
It tins been said that the court by in
troducing Into the construction of the
statute common law distinctions baa
emasculated It. This Is obviously un
true. By Its Judgment every contract
nnd combination In restraint of Inter
state trade made with the purpose or
necessary effect of controlling prices
by stifling competition -or of establish
ing In whole or In part n monopoly of
such trade Is condemned by the stat
ute Tbe most extreme critics cannot
Instance a case thnf ought to be con
demned under the statute wtlch Is not
brought within Its terms nsahns con
strued. The suggestion Is nlso made that the
supreme court by Its decision In the
last 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 tbe statute. This la wholly untrue.
A reasonable restraint of trade at com
mon law Is well understood and Is
clearly defined. It does not rest In tbe
discretion of the con it. It must be
limited to accomplish the purpose of a
lawful main contract to which In order
that it shall be enforceable at ull It
must be incidental. If It exceed the
needs of that contract It Is void.
Tbe test of reasonableness was never
applied by tbe court at comman law
to contracts or combinations or con
spiracies In restraint of trade whose
purpose was or whose uecessury effect
would be to stifle competition, to con
trol prices or establish monopolies.
Tbe 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 and did not exact from tbe pub
lic too greut 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 drawu by courts, but no court
of authority bos ever attempted it
Certainly there Is nothing In the deci
sions of tbe lntest two cases from
vblcb such a dangerous theory of Ju
dicial discretion lu enforcing this stat
ute can derive tbe slightest sanction.
Fore and Effectiveness of 8tatutt a
Matter of Growth.
We have been twenty -one years mak
ing this statute effective for tbe pur
poses for which It wus enacted. The
Knight case was discouraging nnd
seemed to remit to tbe states tbe whole
available power to attack and suppress
the evils of the trusts. Slowly, howev
er, the error of that Judgm-mt was cor
rected, and only In the lust three or
four years has the heavy baud of tbe
low been laid upon the greut Illegal
combinations that have exercised such
an absolute dominion over many of our
Industries. Criminal prosecutions have
beeu brought, and a uumber are pend
iug, but Juries have felt averse to con
victlng for Jail sentences and Judges
have been most reluctant to Impose
such sentences on men of respectable
standing In society whose offense has
been regnrded as merely statutory
Still, as the offense becomes better un
derstood and the committing of It pur
takes more of studied and deliberate
defiance of the law we can be confi
dent that Juries will convict Individu
als and thut Jail sentences will be im
posed. The Remedy In Equity by Dissolution.
In the Standard Oil cuse the supreme
and circuit courts found tbe combluu
tion to be a monopoly of the interstate
business of rcfitiiug. transporting and
marketing petroleum utid Its products,
effected and mulntuined through thlr
ty-seven different corporations, the
stock of which was held bya 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 tbe tblrty-seveu
corporations to and nniong its stock
holders, and 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
ing to produce or briug about further
violations of the act were enjoined.
In the tobacco case the court found
that the individual defendants, twen-ty-nlue-ln
uumlier, bud beeu engaged
In a successful effort to acquire com
plete dominion over the manufacture,
sale and distribution of tobacco In-this
country and abroad und that this had
been done by combinations made with
a purpose and effect to stifle competi
tion, control prices -nnd establish a
monopoly, not only In the' manufacture
of tobacco, but also of tin foil and lic
orice used in its manufacture and of
its products of cigars, cigarettes and
snuffs. The tobacco suit presented a
far more complicated and difficult case
than the Stnndurd Oil suit for a decree
which would effectuate the will of the
court and end the violation of the stat
ute. There was' here no single hold
ing company, as In the case of tbe
Standard Oil trust. Tbe main company
was the American Tobacco company,
a manufacturing, selling und holding
company. The plan adopted to de
stroy the combination nnd restore coin
petition Involved the redivision of the
capital and plants of the whole' trust
between some of the companies con
stituting the trust and new companie
organized for tbe purposes of tbe de
cree and made -parties to It and num
bering, new and old. fourteen.
Situation After Readjustment,
The American Tobacco company
(old), readjusted capital $92,000,000:
the Liggett & Meyers Tobacco company
(new), capital $117,000,000; the P.Lorll
lard company (new), capital $47 .000,
000, and the R. J. Reynolds Tobacco
company (old), capital $7,525,000. ore
chiefly engaged In the manufacture
and sale of chewing and smoking to
bncco and cigars. The former one tin
foil company Is divided Into two, one
of $S25,000 capital and tbe other of
100.000. The one snuff company Is
divided Into three compnnles. one with
a capital of $15,000,000. another with a
capital of $8,000,000 and a third with
a capital of $8,000,000. The licorice
companies are two. one with a capital
of $5,758,300 and another with n capl
tal of $2,000,000. There Is also the
British-American Tobacco company, a
British corporation, doing business
abrond with a capital of $2il.O00.0(U)
the Porto Itlcnn Tobacco company
with a capltnl of $1,800,000. and the
corporation of United Cigar Stores
with a capital of $0,000,000.
Under this arrangement each of the
different kinds of business will be dls
tributed between two or more compu
nles with a division of the prominent
brands In the same tobacco products
so as to make competition not onl
possible, but necessary Thus thi
smoking tobacco business of the coun
try Is divided so that the present In-
dependent companies have 21.3!) per
cent, while the American Tobacco com
pany will have 33.08 per cent, tbe Lig
gett & Meyers 20.05 per cent, the Lorll
lard company 22.82 per cent and the
Reynolds company 2.C0 per cent. The
stock of tbe other thirteen companies,
both preferred and common, baa been
taken from the defendant American
Tobacco company and has been dis
tributed among its stockholders. All
covenants restricting competition have
been declared Dull and further per
formance of them has been enjoined.
The preferred stock of the different
companies bns now been given voting
power which was denied it under the
old organization. Tbe ratio of the pre
ferred stock to the common was as 73
to 40. This constitutes a very decided
change in the character of the owner
ship and control of each company.
In the original suit there were twenty-nine
defendants, who were charged
with being tbe conspirators through
whom the Illegal combination acquired
and exercised Its unlawful dominion.
Under tbe decree these defendants will
bold amounts of stock In tbe various
distributee companies ranging from 41
per cent as a maximum to 28V4 per
cent as a minimum, except in tbe 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 each other, und the group Is
thus prevented from extending Its con
trol during that period. All parties to
the suit and the new companies who
are made parties are enjoined perpet
ually from in any wny effecting any
combination between any of the com
panies in violation of tbe statute by
way of resumption of the old trust
Each of tbe fourteen companies is en
joined from acquiring stock in any of
the others. All these companies are
enjoined from bavlug common direc
tors or officers, or common buying or
selling agents, or common offices, or
lending money to each other.
8ize of New Companies.
Objection was mnde by certain in
dependent tobacco companies that this
settlement was unjust because it left
companies with very large capital in
active business and that tbe settle
ment tbat would be effective to put all
on an equality would be a division of
the capital and plant of tbe trust into
small fractions in amount more near
ly equal to tbat of each 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 large capital in busi
ness enterprises In which such a com
bination can secure reduced cost of
production, sale and 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
tbe decree defeated these purposes
and restored competition between the
large units Into which the capital and
plant have been divided we shall have
accomplished tbe useful purpose of
tbe stutute.
Confiscation Not the Purpose of the
Statute.
It Is not the purpose of tbe statute
to confiscate the property and capital
of the offending trusts. Methods of
punishment by fine or Imprisonment
of the Individual offenders, by flue of
the corporation or by forfeiture of Its
goods In transportation nre provided,
but tbe proceeding In equity Is a spe
cific remedy to Rtop the operation of
tbe trust by Injunction nnd prevent
tbe future use of the plant and capital
In violation of the statute.
Effectiveness of Decree.
I venture to say that not in the his
tory of American law has a decree
more effective for such a purpose been
entered by n court than that against
the tobacco trust As Circuit Judge
Noyes said In his judgment approving
the decree:
"The extent to which It has been
necessary to tear opart this combina
tion and force It Into new forms with
the attendant burdens ought to demon
strate that the federal anti-trust statute
Is o drastic statute which accomplishes
effective results, which so loug as It
stands on tbe statute books must be
obeyed and which cannot be disobey
ed without lucurrlng farreachlng pen
alties. And, on the other band, the
successful reconstruction of this or
ganization should teach 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 tbe congress
bns declared shall exist among the
people of the United Stntes."
Common Stock Ownership.
It has been assumed that tbe pres
ent pro rata and common ownership In
all these compnnles 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 errotieous and Is based
upon the assumed Inefllcncy and lnnoc
uousness of judicial Injunctions. Tbe
companies nre enjoined from co-opera .
Hon 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 nction of the compnnles with
a view to the control , of the market
their number Is so large that such an
attempt 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 a summary character The Immedi
ate result of tbe present situation will
necessarily be activity by nil the com
panies under different managers, ond
then competition must follow or there
will be activity by one company and
stuguutlon by iinother. Only a short
time will inevitably lead to u change
In ownership of tbe stock, as all on
portunity for continued co-operutioa
must disappear. Those critics who
speak of this disintegration iu the trust
as a mere change of garments have not
given consideration to the Inevitable
working of the decree ond understand
little the personal danger of attempt
ing to evade or set nt naught the sol
emn Injunction of a court whose object
Is mnde plaiu 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
Trusts at Hand.
Tbe effect of these two decisions bus
led to decrees dissolving the combina
tion of manufacturers of electric
lamps, a southern wholesale grocers'
association, an Interlocutory decree
against tbe 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 and 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 tbnt the anti-trust act Is
seen to be effective for the accomplish
ment of tbe purpose of Its enactment
we are met by a cry from many-different
quarters for its repeal. 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 nnd to make
impossible those useful combinations
of capital and the reduction of tbe cost
of production tbat are essential to con
tinued prosperity nnd normal growth.
: In the recent decisions the supreme
court makes clear that there is noth
ing in the statute which condemns
combinations of capital 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 tbe aggregation of Immense size are
the stifling of competition, nct.iul aud
potential, and the enhancing of prices
and establishing a monopoly that the
statute is violated. Mere size Is no
sin against the law. The merging of
two or more business plnnts necessarily-
eliminates competition between the
units thus combined, but this elimina
tion Is in contravention of the statute
only when the combination Is madu for
purpose of euding this partlculur com
petition in order to secure control of
and enhance prices and create a mo
nopoly. Lackfof Definiteneis In the Statute. -
Tbe compluint is made of the stat
ute that It is not sutOcieutly definite
In Its description of thut which Is for
bidden to ennble business men to avoid
its violation. Tbe suggestion Is that
we may have a combination of two
corporations which muy run on for
years ond that subsequently tbe at
torney general may conclude that It
was a violation of the statute and that
wblcb'Was supposed by tbe combiners
to be innocent then turns out to be a
combination In violation of the statute.
The answer to this hypothetical case
Is that when men attempt to amass
such stupendous capital as will enable
tbem 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 tbe purpose of reducing the
cost of production, without the thought
of suppressing competition by use of the
bigness of the plant tbey are creating,
then tbey cannot be convicted at the
time tbe union Is mnde, nor can they
be convicted later unless It happen
that later on they conclude to sup
press competition nnd take the usual
methods for doing so and thus estab
lish for themselves a mouopoly. They
can in such a case hardly complain if
the motive which subsequently Is dis
closed is attributed by the court to tbe
original combination.
New Remedial Suggested.
Much Is said of the repeal of this
statute and of constructive legislation
Intended to accomplish the purpose
and blaze a clear path for honest mer
chants and business men to follow. It
may be that such a plan will be
evolved, but I submit that the discus
sions which have been brought out In
recent days by the fear of the con
tinued execution of the anti-trust law
have produced nothing but glittering
generalities and have offered no line
of distinction or rule of nctlon ns defi
nite and as clear as that which the su
preme court Itself lays down In en
forcing tbe statute.
Supplemental Legislation Needed, Not
Repeal or Amendment.
I see no obiectlon, and Indeed I can
see decided advantages. In the ennct
meut of a law which shall describe
and denounce methods of competition
which are unfair aud nre badges of the
unlawful purpose denounced In the
anti-trust Inw. The attempt and pur
pose to suppress n competitor by un
derselling htm ot a price so unprofita
ble as to drive him out of business or
the making of exclusive contracts with
customers under which they nre re
quired to give up ossoelntlon with oth
er manufacturers and numerous kin
dred methods for stifling competition
nnd effecting monopoly should be de
scribed with sufficient accuracy In a
criminal statute ou the one hand to
enable tbe government to shorten Its
task by prosecuting single misdemean
ors Instead of an entire conspiracy and
on the other hand to serve the purpose
of pointing out more In detail to
the business community whut must be
avoided.
Federal Incorporation Recommended.
In a special message to congress on
Jan. 7, 1910, I ventured to point out
lie disturbance to business tbat would
irobably attend tbe dissolution of these
ffendlng trusts. I sold:
"But such an Investigation ond pos
sible prosecution of corporations whose
prosperity or destruction affects tbe
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
tbe now flowing sources of capital
from Its places of hoarding ncd pro
duce a hnlt In our present prosperity
thut will cause suffering and strained
circumstances among tbe Innocent
muny for the faults of the guilty few.
Tbe question which I wish In this
message to bring clearly to the con
sideration and discussion of congress
Is whether. In order to avoid such a
possible business danger, something
cannot be done by which these 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
law under federal control nnd super
vision, securing compliance with tbe
nntl-trust statute.
"Generally in the industrial combina
tions called 'trusts' the prlnelpnl 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
stnte. This fact will Justify the fed
eral government In granting n federal
charter to such a combination to make
nnd sell In Interstate ond foreign com
merce the products of useful manufac
ture under such limitations as will se
cure a compliance with the autl-trust
law. It Is possible so to frame a stat
ute that, while it offers protection to a
federal company against harmful, vex
atious and unnecessary Invasion by the
states. It shall subject it to reasona
ble taxation and control by tbe states
with respect to Us purely local busi
ness. "Corporations organized under this
act should be prohibited from acquir
ing and holding stock in other corpo
rations (except for speclnl reasons,
upon approval by the proper federal
authority), thus avoiding the creation
under national auspices of the holding
company with subordinate corporations
In different states, which has been
such nn effective agency In the crea
tion of the great trusts and monopo
lies. "If the prohibition of tbe nntl-trust
act against combinations lu restraint
of trade Is to be effectively enforced
It Is essentinl tbat the national govern
ment shall provide for the creation of
nationnl corporations to carry on a le
gitimate business throughout the Unit
ed Stntes. The conflicting laws of the
different states of the Union with re
spect to foreign corporations make It
difficult. If uot impossible, for one cor
poration to comply with their require
ments so ns to curry on business iu a
number of different states."
I renew tbe recommendation of the
enactment of a general law providing
for the voluntary formation of cor
porations to engage lu trade and com
merce among the stntes und with for
eign stations. Every argument which
was then advanced for such a law and
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 was then that lbs denunciation of
conspiracies in restraint of trade
should not and does not mean the de
nial of organizations large enough o
be Intrusted with our Interstate and
foreign trade. It has been made more
clenr now than It was then that a
purely negative statute like the anti
trust law may well be supplemented
by specific provisions for the building
up nnd regulation of legitimate na
tional nnd foreign commerce.
Government Administrative Experts
Needed to Aid Courts la Trust
Dissolutions.
, The drafting of the decrees in the
dissolution of tlie present tiusts, with
a view to their reorganization Into le
gitimate corporations, bus 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
an expert from the bureau of corpora
tions. Federal Corporation Commission Pro
posed. I do not set forth in detail the terms
and sections of a 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 ns to their organization
and procedure. Including effective pub
licity, and to the closest supervision as
to the Issue of slock nnd bonds by on
executive bureau or commission lu 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 n
federal law could not exempt the com
pany thus formed and its Ineorpcrators
and managers from prosecution under
the nntl-trust 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 as to the legitimate purpose of Its
transactions would offer it ns great se
curity against successful prosecutlous
for violations ot tbe 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 tbe dissolution and recreation of
trusts within the law. It should be an
executive tribunal of the dignity and
power of tbe comptroller of the cur
rency or the Interstate commerce com
mission, which now exercises supervis
ory power over lmportnnt classes of
corporations under federal regulation.
The drafting of such a federal In
corporation Inw would offer ample op-l
portunlty to prevent many manifest;
evils in corporate management today, i
including irresponsibility of control in
tbe bands of the few who are not the
real owners. j
Incorporation Voluntary. i
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 tbe operation of great,
businesses under tbe protection of such
a charter would attract all who are
anxious to keep within the lines of tBe
law. Other large combinations that!
fnil to take advantage of tbe federal i
incorporation will not have a right to)
complain If their failure is ascribed to,
unwillingness to submit their transac-'
tions to the careful oOlclnl scrutiny,:
competent supervision and publicity
attendant upon the enjoyment of such1
a charter.
Only Supplemental Legislation Needed.'
Tbe 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 tbe anti-trust
law. This statute as construed by tbe
supreme court must continue to be the
line of distinction for legitimate busi
ness. It must be enforced unless we
are to banish individualism from all
business nnd reduce It to one common
system of regulation or control of
prices like tbat which now prevails
with respect to public utilities and
which when applied to all business
would be a long step toward state so
cialism. Importance of the 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 a people to maintain
their future growth by preserving un
controlled and unrestricted tbe enter
prise of the Individual, bis Industry,
his Ingenuity, his Intelligence and bis
independent courage.
For twenty years or more this stat
ute has been upon the statute book.
All knew Its general purpose and ap
proved. ; Many of Its violators were
cynical over Its assumed Impotence,
it seemed Impossible of enforcement.
Slowly the mills of the courts ground,
nnd only gradually did the majesty of
the luw.as8ert Itself. Many of Its
statesmen-authors died before It be
came n living force, and they ond oth
ers saw the evil grow which they bad
hoped to destroy. Now Its efficacy Is
seen; now Its power Is heavy; now Its
object Is near achievement Now we
hear the call for Its repeal 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 way the evil
we nre Just stamping out can be cured
if we only abandon this work of twen
ty years and try nnother experiment
for another term of years.
It is said that tbe act has not done
good. Can this be said in the face of
the effect of the Northern Securities
decree? That decree was in no way,
so drastic or lnhlbltlve In detail as ei
ther the Standard Oil decree or tbe
tobacco decree. But did It not stop
for all time the then powerful move
ment toward tbe control of all the
railroads of the country In a single
hnnd? Such a one man power could
not have been a healthful influence In
the republic, even though exercised
under the general supervision of an
interstate commission.
Po we desire to make such ruthless
combinations nnd monopolies lawful)
When all energies are directed, not to
ward the reduction of the cost of pro
duction for the public benefit by a
healthful competition, but toward new,
ways and means for making perma
nent In a few hands the absolute con
trol of the conditions and prices pre
vailing In the whole Hold of industry,
then individual enterprise and effort
will 1k paralyzed and the spirit of
commercial freedom wilt be dead.
WM. II. TAFT.
The White House. Dec. B, 191L
Got a Free Lecture.
The agent tor 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 tbo side of the house, caught
his breath, clinched bis fist and looked
skywnrd.
"What's the matter?" asked a police
man. "I've met the meanest man," he an
swered. "I've beard of him, and I've
read 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 tbe meanest
man?"
"By the way he acted. I showed
him this work of art lectured on It
for bulf an hour, pointed out tbe en
graviugs, nnd when I hinted It would
bo a good thing to order what do you
think ha said?"
"I dou't know."
"He said be never bought books,
he didn't have to. He Just waited for
some Idiot of an agent to come along
and tell "llin all that was In 'em and
turn over the leaves while be looked
nt the pictures. Nice, isn't Itf Ep-
wortb Herald.