mensurate with our standard of living and continue to use our genius to improve our processes and to bring about further savings in manpower cost.

ON THE QUESTION OF AGRICULTURE

At the Geneva conference agriculture was recognized for the first time side by side with commerce and industry. Its problems must be solved with the others.

But we Americans had paved the way for that, for when we framed our own tariff act of 1922 we recognized that the raw material of one man is the finished product of another. We recognized the farm as a producing industry. It is just as difficult to raise a Merino sheep as it is to make cloth and an overcoat from its wool. The man who produces sheep is just as much a manufacturer as the mill owner. That idea seemed to be just born in Geneva, although we have had it over here for some time. So agriculture was recognized as an integral part of the industrial structure of human life and civilization and entitled to equal compensation and equal recognition.

It seemed to be acknowledged as a deplo able reality that in all of the European countries agriculture was not prospering in the same measure as industry. Our own country recently has been no exception to the general rule. But there the comparison ends, for in our own country agriculture has attained a position of importance, incomparably better than that of the farmer of Europe, who has absolutely no voice in the councils of the nations, and is only a peasant.

If our farmers could only visit Europe and see the return for effort and the standard of living of the peasant farmer, they would lear much by the comparison and would conclude that their lot here is not so bad. Our farmer should still try to better it, but he should hesitate to change our great national policies, like the protective tariff, lest he destroy himself.

CARTELS

Now comes the question of cartels, and that, I presume, is the key point to which I am to address myself. You will be interested to know that the ultimate conclusion of the League of Nations was this: They do not know whether the cartel is a good thing or not. Let me explain that "cartel" is their word in Europe for a trust or monopolistic organization, which may be national or international.

Here in our country, as is well known, we are not allowed to form monopolies or combinations to raise prices or to divide markets. The Sherman antitrust law has for years forbidden that, and our country has thought it wise to continue to do so. Here we know what riotous competition is and what its dangers are. At Geneva we were told that we are stripping our natural resources because riotous competition forces us to take only the cream from our mines, our forests, and other exhaustible natural resources. That is certainly a detriment to future generations, but for the present at least we can not help it.

In

But over in Europe cartels have been encouraged. Prior to the war Germany had an enormous advantage of rapidly growing industry and governmental recognition or encouragement of cartels. Agencies of the old German Government in foreign countries were charged with the duty of ascertaining the nature of imports from other countries. Brazil, for illustration, representatives of the German Government were everywhere, in banks and other clerical positions, acquiring information regarding contracts and trade relations with other countries, so that the information might be transmitted to Germany and there acted upon by the cartel for the benefit of German commerce.

An American concern sent a man to Brazil who made contracts with the leading dealers in his particular commodity. The contract bound him to furnish all the items of that commodity which they could normally handle. The contract was large enough to involve the question of loans, and as a matter of course the local dealers went to the banks. The banks copied the contracts and sent them to Berlin, and inside of 60 days a German representative of the cartel came to Brazil, saw the other dealers, and cut the price sufficiently so that the original firms could not compete. The American manufacturer was confronted with the necessity of either cutting his price to a ruinous degree or going out of the business there. In those days Americans were not particularly interested in export business, and the manufacturer did not cut his price, and his business in Brazil was lost.

These methods are not exactly ethical and I do not say that Germany is the only one who did it. A chicken like that might some day come home to roost on our own rail. At the same time, a cartel is in a much better position to conduct such a fight and drive competitors out of business than is a single individual concern.

Now, those pre-war cartels were very successful. We have heard it said, and believe it to be so, that if the German Government had been less inclined to war and more patient, the German method of competition would have made Germany the commercial leader of the world by this time. But, of course, the war came and Germany lost. She lost territory, personnel, training, and methods of government which were effective in this case. It will take that country, and every other country in Europe, some time to reorganize and reestablish old connections and build up their trade again.

But the cartel idea is not dead, and when it came up at Geneva the conference said that there was no law which could control an inter

national cartel; that no law could be made until cartels had demonstrated their usefulness or lack of usefulness, their dangers or their benefits. So national cartels were recognized as established facts and international cartels were considerably encouraged. The league in general terms said: "If a cartel does not raise prices internationally, if it does not discriminate against nations by charging a high price for a necessary commodity to be used in a further commodity, and thus drive that nation out of the competitive field on the further commodity, the cartel would be all right. That if it did not throw workmen out of That if it did not work them too hard it employment it was all right. was all right." But the curious thing about it was that the international cartels were discussed with the same arguments which we find took place in our own Congress when we reread the debates on the Sherman antitrust law-again showing that we have passed through much that seems new to many other nations.

Although the league reached no conclusion about cartels, yet nothing was done to discourage them. Cartels were then and there in process of formation. Last summer the "chemical cartel" was formed internationally. I met people in May who were interested in it and asked, "Have you signed? I see that German chemical stocks are rising." They answered, "No; we have not signed; but conversations are still going on." Later the great "chemical cartel was formed. The difficulty in forming cartels is that the initiators usually demand the greater share of the business. When the cartel divides the world's business, for instance, it may be suggested that Germany shall have 50 per cent, France 22 per cent, Holland 16 per cent, and Luxemburg 6 per cent, and so on. These percentages present great difficulties as to who will share and how much each will get.

Cartels divide up the countries on the theory that if you control production you can thus raise prices and prevent destructive competition. Back of the whole thing lies this idea: That the cartels will be better equipped to give successful combat to American industry. The strength of the cartel lies in its centralized control and in its ability to dump or to exercise the kind of competition which will force its competitors out of a neutral market. I believe it is their underlying hope that the increase in American exports may be checked, or in fact radically decreased by the efforts of these organizations.

I was astonished to learn that national cartels are so general that they cover almost all industries. International cartels are less so, but I am told that when the World War broke out there were some 600, and they have increased rapidly ever since.

Which is the proper method of doing business? Of the two systems, which will succeed? A concentrated body organized for international trade, like a cartel, or a concentrated body like the great corporations in the United States? Certainly the small fry must keep near the shore. I do not think the world has as yet demonstrated which is the best for humanity generally. That is a matter for discussion. It is trust and antitrust, and I think we may dismiss that question because we can not settle it here.

These international cartels have weaknesses, and that is the same thing that I have illustrated in the workings of the League of Nations. They are made up of human beings, and my observations confirmed my feeling that Europeans, both as nations and individuals, are not more generous nor less unselfish or high-minded than the American people.

We know there is a very large class of people in the United States who feel that anything our Government does is absolutely wrong. For instance, if we send an ambassador to Mexico who asks Mexico to protect American business interests there, some one is bound to rise and complain that it is not right; that we are trying to interfere with Mexican business and the Mexican Government. If we do not send an ambassador to look after these matters in Mexico, we are then charged with being a neglectful Government. If we go into Nicaragua because we want to protect Americans there, many in this country at once declare we are utterly wrong, are imperialistic, and have ulterior motives. They charge we are creating ill will for our Government, and that we ought to at once withdraw. If we try to do anything to protect Americans in China because there is no strong government in China and no one able to protect us there, some one jumps up and says we are brutal and are helping others to rob China of its independence.

THE TARIFF AND THE LEAGUE

Much of this unthinking criticism is directed at the American tariff. How many thousands of people in the United States think the American tariff is wicked, that it is a menace to peace, that it prevents the whole world from recovering from the war, and that we are ungenerous and unkind to Europe! How many of these critics, either Americans or Europeans, know that 60 per cent of all goods coming here are on the free list; that our imports are double those of any previous time in our history, and that more goods come in free to-day than the total of all imports under any previous law? Well, I found this ignorant criticism in Europe. I talked with a man from Finland who said: "Oh, Mr. Morrison, I wish to speak to you about your American tariff. It is hampering our development." I asked: "In Finland?" I said: "The American people are very friendly to Finland and are proud of

the fact that you have organized a government upon the American model. That we are doing anything to upset the commercial relations between these two countries or do anything that is distasteful to Finland is a surprise to me. Please be specific." Now, gentlemen, that is the key to the whole situation-let the critics be specific. He said: "It is your tariff on lumber and wood pulp." I said: "Why, I am astounded that should affect you, because both are on our free list."

Then I met a Canadian, who said, "Your tariff is very, very bad." I said, "What makes you think so?" He said, "Lots of my friends in the lumber business in Canada are almost bankrupt." I said, "Wait a minute. Lumber is on our free list." He replied, "No; there is a duty of $2 per thousand." So I took my copy of our tariff act, and after reading it to him I said, "There is a duty on one kind of lumber, on planed tongued-and-grooved boards, of $2 per thousand. And, the reason for that duty is because Canada charges us a duty of $2 per thousand feet. There is a clause in our tariff bill which says we will put lumber on the free list if the other nations permit our lumber to enter their markets free. In the case of Canada, I know that an application has been made to the Canadian Government to take that $2 per thousand feet off of that particular class of lumber. So you understand the moment your country takes off its tariff then our tariff falls. Your complaint is not against the United States. Go to Ottawa and have it corrected there." This is just another instance of foreign misunderstanding of our tariff.

In Europe they thoroughly believe that we have a tariff wall so high as to prevent anything from coming over here, and that it is almost impossible to export anything to us. None of them know the fact, as I stated a moment ago, that 60 per cent of all imports coming into the United States under our present tariff law are free, and that a tariff is put upon those commodities in which a large amount of labor is used in production, so as to keep our own people working instead of throwing our workmen and women out of employment and giving their jobs to the workmen in Europe. So there is a very strong sentiment, and it results in propaganda which is ever increasing. Indeed, much of this propaganda emanates right in Geneva from certain American organizations with altruistic ideals and supported by American philanthropy, who preach that our self-preservation by means of a tariff is "a menace to world peace." I have innumerable instances of that sort of matter in my possession. All the European nations have organized press bureaus which are sending alleged national opinions to our press, and, strange to say, criticisms of America and our policy get the headlines here in the States.

NATIONAL OPINIONS

seem

And this brings me to this thought: These "national opinions to come into our public prints as though they were the opinions of the peoples of these foreign governments. The propaganda is like this: "It is the consensus of opinion in Germany," or "English opinion is as follows," or "France thinks so and so." Who knows what France thinks? Who knows what the consensus of opinion is in Germany? Who knows what English public opinion is? Do we think we know because an Associated Press dispatch tells us this or that? There is no referendum. Somebody says, "France hates us." Shall we believe that? I think France loves us, and my opinion is as good as a reporter's. I think there is no lack of appreciation in France of the fact that we went "over there." They helped us in our struggle for independence and we came to them when they needed us most. Do you think the people of France hate us because of our tariff, of which ninety-nine out of a hundred Frenchmen never even heard?

But the propagandists say that France made this last attempt to raise duties against us because she wanted to get even with us on account of our protective tariff. You should know that all the European tariff walls are about as high as ours, and many exceed ours. There is not nearly as much on their free list as you would suppose.

Why should we accuse France of reprisal? How do we know what "France" thinks or why she acts? I was once told by a diplomat that if one could tell to-night what the French Government will think tomorrow morning he would surpass the greatest intellectual achievement of the century. Let us analyze this question of reprisal: Shall we say that France "thinks" this or that, and because of the American tariff she prefers to buy goods elsewhere? Is the American tariff as serious a menace to France as the German border line? Germany has been her hereditary enemy, and for generation after generation the French and the Germans have distrusted each other. On the other hand, can you tell me France has entirely forgotten our services to her and the friendly relations which have always existed? Is it because of our tariff or is it for some other reason she has made a reciprocity treaty with Germany, her worst enemy, and tried to raise her tariff against us? You may guess what an individual thinks, but no man can tell what a nation thinks. That is what I am coming to in this whole question of international relationship. France may think one thing or she may think another, but the individual in France who is engaged in the grain business "thinks" that if he can buy wheat from the Argentine one cent cheaper than he can in the United

States, he is going to buy in the Argentine. And if he can buy wheat one cent cheaper in Russia than he can buy it in the Argentine or in the United States he is going to buy it in Russia.

66

We must not expect the individual business man to sacrifice his profits simply because he thinks" what a wonderful, generous country the United States is, or will say, "How good it has been to us; I for one appreciate it, and therefore I am going to make the sacrifice."

We can take it as axiomatic that the purchasers in all European nations are going to buy what they can within their own borders, and if they must buy from other countries they will buy where they can buy cheapest, and nowhere else. And if they find there is something coming across their borders in serious competition with them, they will devise some means to protect themselves; a tariff, or a classification, or whatever may be necessary.

No matter what we do in America, whether we loan them money to start their industries-as we have done enormously, and thus helped them to build up competition against us-or whether or not we set aside a tariff duty, it is individual American initiative and ability that is going to determine whether we get foreign trade or not; and it is our competitive ability to produce at a lower cost and sell better goods or cheaper goods that will get us the business. Let us not adopt as a commercial principle the idea that we may expect gratitude in our business relations with the people of another country. One of the great philosophers put over his dressing table:

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Never expect gratitude. If it comes it is as a gentle rain from heaven, and it is as rare as a shower in the desert."

Quite apropos of this is a recent statement in Le Temps, a leading Paris paper, which refers to our "holier than thou" attitude, and adds: "At the feet of the Pharisees this attitude must be seriously considered, for they are only too willing to walk over those who prostrate themselves before them," and says further regarding America: "While waiting for a powerful war fleet under hasty construction she is blocking all the seas in order to hold the Old World at her mercy. She is throttling it with chains of gold."

This is a responsible French journal, and the information given is news to us all. I do not believe you knew our country was half as bad as this.

What we may do for the protection of American industry and the maintenance of our own standard of living is our own affair, and we can not look for gratitude whether we do or do not let down our tariff walls.

CARTELS AND THE TARIFF

And that brings me back to the question of cartels: With unorganized industry in the United States and organized trusts abroad when the opportunity occurs and there is any breach in our protective tariff walls, they are coming through. That is one of the great hazards of unorganized effort. Personally, I know of an instance before the war where a certain manufacturing industry was started in this country that had never been undertaken here before. At the end of one year the Ameri

can manufacturer had demonstrated ability to produce the commodity economically, and at the price of $110 a ton it furnished a small profit. He was then visited by a representative of the foreign cartel, who said: "We want to be very friendly; we recognize the great ability with which you have mastered this industry, and we want to cooperate with you. Your price is $110 a ton. We will allow you 20 per cent of the business in the United States, we will take 80 per cent for ourselves, and will maintain that price." The answer of the American producer was: "I will not enter into any such combination. It is unlawful. I will go it alone and you can go, alone, to a certain very warm clime."

The foreign cartel immediately dropped the price to $60 a ton, much lower than the cost of production in the United States, and just before the war the price was dropped by the cartel to $52 a ton, because the manufacturer in this country was not only persistent but as a patriotic American as well, he kept on making it, even at a loss, because he had a deep pocket.

That is the warfare you will have to meet from the cartels. The strength of the cartel is in its unified effort; its ability to maintain prices in countries which are in the cartel, and to utilize resources thus acquired to drive competitors out of foreign markets including the markets of our own United States, which is the envy of the

world.

A weakness of the cartel is also apparent: As soon as it becomes international there is the national feeling as well as the human equation-national pride, jealousy, and selfishness. I do not expect cartels in their present form to last indefinitely, but I do expect the idea to grow and superorganized aggregations to appear, and I think within a very few years we will have cartels of such sound foundation that they will be a distinct menace to American industry. It therefore behooves us, in view of the centralization in Europe, to remember that the greatest market of the world is in the United States; that our export business is from 7 to 10 per cent of the total volume of our production, and, essential as our exports appear to be, we can not afford to bring down our standard of living and throw labor out of employment here just to get us an export trade. We must not break

(a) The standard one-eighth bushel hamper or round-stave basket shall contain 268.8 cubic inches.

(b) The standard one-fourth bushel hamper or round-stave basket shall contain 537.6 cubic inches.

(c) The standard one-half bushel hamper or round-stave basket shall contain 1,075.21 cubic inches.

(d) The standard three-fourths bushel hamper or round-stave basket shall contain 1,612.8 cubic inches.

(e) The standard 1-bushel hamper or round-stave basket shall contain 2,150.42 cubic inches.

(f) The standard 14-bushel hamper or round-stave basket shall contain 2,688 cubic inches.

(g) The standard 11⁄2-bushel hamper or round-stave basket shall contain 3,225.63 cubic inches.

(h) The standard 2-bushel hamper or round-stave basket shall contain 4,300.84 cubic inches.

SEC. 2. That the standard splint baskets for fruits and vegetables shall be the 4-quart basket, 8-quart basket, 12-quart basket, 16-quart basket, 24-quart basket, and 32-quart basket, standard dry measure. For the purposes of this act a quart standard dry measure has a capacity of 67.2 cubic inches.

(a) The 4-quart splint basket shall contain 268.8 cubic inches. (b) The 8-quart splint basket shall contain 537.6 cubic inches. (c) The 12-quart splint basket shall contain 806.4 cubic inches. (d) The 16-quart splint basket shall contain 1,075.21 cubic inches. (e) The 24-quart splint basket shall contain 1,612.8 cubic inches. (f) The 32-quart splint basket shall contain 2,150.42 cubic inches. SEC. 3. That the Secretary of Agriculture shall in his regulations under this act prescribe such tolerances as he may find necessary to allow in the capacities for hampers, round stave baskets, and splint baskets set forth in sections 1 and 2 of this act in order to provide for reasonable variations occurring in the course of manufacturing and handling. If a cover be used upon any hamper or basket mentioned in this act, it shall be securely fastened or attached in such a manner, subject to the regulations of the Secretary of Agriculture, as not to reduce the capacity of such hamper or basket below that prescribed

therefor.

SEC. 4. That no manufacturer shall manufacture hampers, round stave baskets, or splint baskets for fruits and vegetables unless the dimension specifications for such hampers, round stave baskets, or splint baskets shall have been submitted to and approved by the Secretary of Agriculture, who is hereby directed to approve such specifications if he finds that hampers, round stave baskets, or splint baskets for fruits and vegetables made in accordance therewith would not be deceptive in appearance and would comply with the provisions of sections 1 and 2 of this act.

SEC. 5. That it shall be unlawful to manufacture for sale or shipment, to offer for sale, to sell, to offer for shipment, or to ship. hampers, round stave baskets, or splint baskets for fruits or vegetables, either filled or unfilled, or parts of such hampers, round stave baskets, or splint baskets that do not comply with this act: Provided, That this act shall not apply to Climax baskets, berry boxes, and till baskets which comply with the provisions of the act approved August 31, 1916, entitled "An act to fix standards for Climax baskets for grapes and other fruits and vegetables, and to fix standards for baskets and other containers for small fruits, berries, and vegetables, and for other purposes (39 U. S. Stat. L. 673), and the regulations thereunder. Any individual, partnership, association, or corporation that violates this section shall be deemed guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not exceeding $500: Provided further, That no person shall be prosecuted under the provisions of this act when he can establish a guaranty signed by the manufacturer, wholesaler, shipper, or other party residing within the United States from whom the hampers, round stave baskets, or splint baskets, as defined in this act, were purchased, to the effect that said hampers, round stave baskets, or splint baskets are correct, within the meaning of this act. Said guaranty, to afford protection, shall contain the name and address of the party or parties making the sale of the hampers, round stave baskets, or splint baskets to such person, and in such case such party or parties making such sale shall be amenable to the prosecution, fines, and other penalties which would attach in due course under the provisions of this act to the person who made the purchase.

SEC. 6. That any hamper, round stave basket, or splint basket for whether filled or unfilled, or parts of such fruits or vegetables, hampers, round stave baskets, or splint baskets not complying with this act, which shall be manufactured for sale or shipment, offered for sale, sold, or shipped, may be proceeded against in any district court of the United States within the district where the same shall be found and may be seized for confiscation by a process of libel for condemnation. Upon request the person entitled shall be permitted to retain or take possession of the contents of such hampers or baskets, but in the absence of such request, or when the perishable nature of such contents makes such action immediately necessary, the same shall be disposed of by destruction or sale, as the court or a judge thereof may direct. If such hampers, round stave baskets, splint baskets, or parts thereof

be found in such proceeding to be contrary to this act, the same shall be disposed of by destruction, except that the court may by order direct that such hampers, baskets, or parts thereof be returned to the owner thereof or sold upon the payment of the costs of such proceedings and the execution and delivery of a good and sufficient bond to the effect that such hampers, baskets, or parts thereof shall not be sold or used contrary to law. The proceeds of any sale under this section, less legal costs and charges, shall be paid over to the person entitled thereto. The proceedings in such seizure cases shall conform as near as may be to the proceedings in admiralty, except that either party may demand trial by jury of any issue of fact joined in such case, and all such proceedings shall be at the suit and in the name of the United States.

SEC. 7. That this act shall not prohibit the manufacture for sale or shipment, offer for sale, sale, or shipment of hampers, round stave baskets, splint baskets, or parts thereof, to any foreign country in accordance with the specifications of a foreign consignee or customer not contrary to the law of such foreign country; nor shall this act prevent the manufacture or use of banana hampers of the shape and character now in commercial use as shipping containers for bananas. SEC. 8. That it shall be the duty of each United States district attorney to whom satisfactory evidence of any violation of this act is presented to cause appropriate proceedings to be commenced and prosecuted in the proper courts of the United States in his district for the enforcement of the provisions of this act.

SEC. 9. That the Secretary of Agriculture shall prescribe such regulations as he may find necessary for carrying into effect the provisions of this act, and shall cause such examinations and tests to be made as may be necessary in order to determine whether hampers, round stave baskets, and splint baskets, or parts thereof, subject to this act, meet its requirements, and may take samples of such hampers, baskets, or parts thereof, the cost of which samples, upon request, shall be paid to the person entitled.

SEC. 10. That for carrying out the purposes of this act the Secretary of Agriculture is authorized to cooperate with State, county, and municipal authorities, manufacturers, dealers, and shippers, to employ such persons and means, and to pay such expenses, including rent, printing publications, and the purchase of supplies and equipment in the District of Columbia and elsewhere, as he shall find to be necessary, and there are hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, such sums as may be necessary for such purposes.

SEC. 11. That sections 5 and 6 of this act shall become effective at but not before the expiration of one year following the 1st day of November, next, succeeding the passage of this act.

The bill (S. 2149) authorizing and directing the Secretary of Agriculture to investigate all phases of crop insurance was announced as next in order.

Mr. KING. Mr. President, does the Senator from Oregon [Mr. MCNARY] desire to take up the bill this evening?

Mr. McNARY. Conformable with the request of the Senator from Utah, I shall ask that it go over at this time, because I desire to collect some data which I shall present at some other time to the Senate.

The PRESIDENT pro tempore. The bill will be passed over. The bill (S. 1414) for the prevention and removal of obstructions and burdens upon interstate commerce in cottonseed oil by regulating transactions on future exchanges, and for other purposes, was announced as next in order.

Mr. COPELAND. Mr. President, I have an understanding with the Senator from Texas [Mr. MAYFIELD] regarding the bill. Therefore I ask that it may go over.

The PRESIDENT pro tempore. The bill will be passed over. CLASSIFICATION OF SERVICE POSTMASTERS

The bill (S. 1728) placing service postmasters in the classified service was announced as next in order. SEVERAL SENATORS. Over.

The PRESIDENT pro tempore. The bill will be passed over.

PRISON-MADE GOODS

The bill (S. 1940) to divest goods, wares, and merchandise manufactured, produced, or mined by convicts or prisoners of their interstate character in certain cases, was announced as next in order.

Mr. BLEASE. Mr. President, I wish to briefly state my objections to S. 1940, entitled "A bill to divest goods, wares, and merchandise manufactured, produced, or mined by convicts of their interstate character in certain cases," which has been

favorably reported with an amendment by the Committee on Interstate Commerce.

The report opens with a significant statement:

The penitentiary problem is a problem for the State. The factors that enter into its adjustment are so many and so varied as to make it essentially a State problem, and no Federal impediment should stand in the way of any State which seeks to determine its own prison affairs and the regulation of the sale of prison products.

Such impediment now exists, and it is only for the removal of the impediment that this legislation is designed.

It goes on to state that the proposed legislation is supported by three great elements of society-namely, the American Federation of Labor, the manufacturers, and the General Federation of Women's Clubs; discusses the "State use" and "Stateuse plans"; mentions the opposition of prison contractors; deplores uncontrollable abuses; and closes with the gracious announcement, in the form of an amendment, that two years have been given for the readjustment of present systems.

In speaking of the character of the bill the report says: Briefly, the bill divests convict-made products of their interstate character upon their arrival in the State of their destination and permits the laws of that State to become operative with respect to the sale and distribution of such products within the State. It is simply an enabling act.

The bill does not prohibit the transportation of convict-made goods. It does not force the enactment of any State legislation. It does not alter or in any way interfere with any existing law in any State, nor does it interfere with the management of any State penal institution. I propose to show by a brief analysis of the bill that this is not a proper subject for legislation by Congress; that its enactment would be unconstitutional and void; and that the effect of its passage, if legal, would be a far-reaching and unjustifiable invasion of the rights of the sovereign States.

In defining the powers of Congress the Constitution of the United States provides, among other things, that

The Congress shall have power to regulate commerce with foreign nations, and among the several States, and with the Indian tribes. (U. S. Constitution, Art. I, sec. 8, cl. 3.)

It is now considered an elementary proposition of law that this grant of express power to Congress was absolute and exclusive in its nature and, therefore, I will not take the time of the Senate to discuss it. The object of the provision as shown by numerous constructions of the clause in decisions by the Supreme Court of the United States was to place the regulation of interstate commerce under the control of Congress to prevent unfair discriminations against the commerce of one State by another State, and to encourage and foster free and unrestricted intercourse of trade among the several States.

However, we all know that laws are supposed to be founded upon reason and are subject to common-sense interpretation. It was held in the case of Stoutenburg v. Hennick (129 U. S. 141) that Congress could not delegate to the District of Columbia the power to regulate commerce between the District and the States; but, on the other hand, it was decided in the Interstate Commerce Commission cases that Congress had authority, under its sovereign and exclusive power to regulate commerce, to create a commission for the purpose of taking over certain of its duties in reference to this subject.

It has also been generally accepted that it is within the power of Congress to permit the exercise of the power to regulate interstate commerce by the States in certain instances. In this connection I might state that sections 4278 and 4279 of the Revised Statutes of the United States, relating to nitroglycerine and other explosives, are grants of power by Congress directly to any State, Territory, District, city, or town to prohibit the introduction of such substances into its limits for sale, use, or consumption therein, and this principle is supported by the opinion of the Supreme Court in Ex parte Jervey, 66 Federal, 960.

Following the decision in Leisy v. Hardin (135 U. S. 100), Congress provided in an act of August 8, 1890 (26 Stat. 313):

That all fermented, distilled, or other intoxicating liquors or liquids transported into any State or Territory or remaining therein for use, consumption, sale, or storage therein shall, upon arrival in such State or Territory, be subject to the operation and effect of the laws of such State or Territory enacted in the exercise of its police powers to the same extent and in the same manner as though such liquids or liquors had been produced in such State or Territory, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise.

This act was held to be valid and constitutional in In re Rahrer (140 U. S. 561), the court saying:

Congress has not attempted to delegate the power to regulate commerce, or to exercise any power reserved to the States, or to grant a power not possessed by the States, or to adopt State laws. It has taken its own course and made its own regulation, applying to these subjects of interstate commerce one common rule, whose uniformity is not affected by variations in State laws in dealing with such property. And goes on to further say:

No reason is perceived why, if Congress chooses to provide that certain designated articles of interstate commerce shall be governed by a rule which divests them of that character at an earlier period of time than would otherwise be the case, it is not within its competency to do so.

It is peculiarly interesting to note the striking similarity in the wording of the above-quoted act and the language employed by the court in construing the same with S. 1940, the bill which we have under discussion, and which reads as follows:

That all goods, wares, and merchandise manufactured, produced, or mined, wholly or in part, by convicts or prisoners, except paroled convicts or prisoners, or in any penal and/or reformatory institutions, transported into any State or Territory of the United States and remaining therein for use, consumption, sale, or storage, shall upon arrival in such State or Territory be subject to the operation and effect of the laws of such State or Territory to the same extent and in the same manner as though such goods, wares, and merchandise had been manufactured, produced, or mined in such State or Territory, and shall not be exempt therefrom by reason of being introduced in the original package or otherwise.

Section 2 provides that—

This act shall take effect two years after the date of its approval. It is therefore apparent that upon the foregoing statements of law the proponents of S. 1940 base their claims for its validity. This contention can not be sustained for various and obvious

reasons.

In the first place, the business of manufacturing is not commerce. In Kid v. Pearson (128 U. S. 20) the Supreme Court of the United States says:

No distinction is more popular to the common mind or more clearly expressed in economic or political literature than that between manufactures and commerce.

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The legal definition of the term commerce" as given by the Supreme Court in County of Mobile v. Kimball (102 U. S. 671, 702), and reiterated in Kid v. Pearson (supra), is as follows:

Commerce with foreign countries and among the States, strictly considered, consists in intercourse and traffic, including in these terms navigation and the transportation and transit of persons and property, as well as the purchase, sale, and exchange of commodities.

Compare this statement with the following declaration in the

same case:

Manufacture is transformation the fashioning of raw materials into a change of form for use. The functions of commerce are different. The buying and selling and transportation incidental thereto constitute commerce; and the regulation of commerce in the constitutional sense embraces the regulation, at least, of such transportation.

The distinction is important and can not be overly emphasized, for it may clearly be seen that the power to regulate commerce does not infer nor imply the power to regulate manufactures.

In fact, the absence of an express grant of power to Congress to regulate manufactures plainly shows that this right was wisely reserved to the people and the several States under the tenth amendment to the Constitution.

Now, the obvious and proximate effect of the enactment into law of the bill under discussion-S. 1940-whatever may be the motives actuating its advocates, will be to permit certain States to regulate and control the legitimate manufacture of wholesome and useful articles in other States through the medium of restrictions and embargoes on interstate commerce.

Unlike the instances of "explosives," "intoxicating beverages," and other articles of like nature deemed by reason of inherent qualities to be dangerous or injurious to the safety, health, and good morals of a community, thereby falling within the class of police power restrictions, S. 1940 is not a measure protesting against the character of the articles sought to be affected thereby, but, on the other hand, and admittedly so, objects solely to the class of labor employed in the manufacture of the goods. In other words, articles of the same kind are proposed to be classified and discriminated against according to the method of origin and not nature. Brooms made by convicts may not be sold, while brooms made by other than convicts may be sold, and likewise with other goods, wares, and merchandise.