would not be tolerated in any court in the country.1 The Senate thereupon accepted the recommendation of the committee that the bill be postponed indefinitely.2 This bill was the only one proposing to amend the Sherman Act that was reported out of committee during the period intervening between the enactment of the 1903 legislation and the close of the Roosevelt administration in March, 1909. The only tangible evidence given by Congress of interest in trusts was in the passage of several resolutions of investigation. Among these were a joint resolution, approved by the President on March 7, 1906, instructing the Interstate Commerce Commission to make examinations into the subject of railroad discriminations and monopolies in coal and oil; 3 a resolution of the Senate directing the Attorney General to furnish it with a statement of all suits instituted by the Department of Justice under the Sherman Anti-trust Act and the Interstate Commerce Law, and the disposition made of the suits; 4 a resolution of the Senate directing the Secretary of Commerce and Labor to investigate the causes of the high price of lumber, and to determine whether there was a combination or trust in the supplying thereof; 5 and the passage by the House of a resolution to appoint a committee to investigate the paper industry, and to inquire whether there was a paper combination." William Howard Taft became President on March 4, 1909. President Taft made frequent reference to the trust question, and recommended far-reaching changes in our legislation. On January 7, 1910, in a special message to Congress on the anti 1 Senate Report no. 848, 60th Cong., 2nd Sess., p. 9. 2 Cong. Record, January 26, 1909, p. 1395. Subsequently the Supreme Court of the United States in the Standard Oil and Tobacco cases in 1911 by the enunciation of its "rule of reason" made the passage of such a bill unnecessary; since these decisions, as will be pointed out later, limited the application of the Sherman Act to unreasonable contracts and combinations. Cong. Record, March 7, 1906, p. 3440. 4 Ibid., June 25, 1906, p. 9089. 5 Ibid., January 18, 1907, pp. 1330-1333. › 6 Ibid., April 21, 1908, p. 5033. trust and interstate commerce laws, he expressed himself as hostile to trusts, and to all schemes to stifle competition and raise prices.1 His main legislative recommendation was the enactment of a voluntary federal incorporation law, and provision by means of this law for the filing of reports with the Department of Commerce and Labor, and for the prevention of stock-watering and holding companies (except for special reasons approved by the proper federal authority). In subsequent messages he renewed his recommendation for a federal incorporation law, and recommended further that a Federal Corporation Commission, of the dignity and power of the Interstate Commerce Commission, be established to supervise the companies taking out federal charters; that the courts be empowered to invoke the aid of this body or the Commissioner of Corporations in drafting dissolution decrees; and that price cutting to eliminate competitors, exclusive contracts, and other kindred devices for stifling competition and effecting monopoly be specifically declared illegal and criminal. Despite President Taft's great interest in anti-trust legislation, and the obvious need of action, only minor changes in the law dealing with trusts were made during his administration. On June 25, 1910, the Act to Expedite Hearings (1903) was amended. The act as amended provided that if a member of the circuit court was necessarily absent or disqualified, the justice of the Supreme Court assigned to that circuit (or the other circuit court judges) might designate some district judge within that circuit to sit in the court at the hearing of the suit. It provided further that any case in which the judges were unable to agree on a decision or order, instead of being certified to the Supreme Court for review as if on appeal, should be retried before the court, reconstituted through the appointment by the Chief Justice of the Supreme Court of another circuit judge to sit with the court in the determination of that particular case. In 1913 a bill was passed to provide for publicity in taking evidence under the Sherman Act. Senator Nelson, who re1 Cong. Record, January 7, 1910, pp. 381 seq. 2 36 Statutes at Large, part I, p. 854. ported the bill, explained that a suit had been instituted by the Department of Justice against the Shoe Machinery Trust, and that the federal judge had ordered the testimony before the master to be taken behind closed doors, instead of before the general public, as was the usual procedure.1 The purpose of this bill, which was recommended by the Department of Justice, was to insure that testimony in cases under the anti-trust law be taken publicly as in open court. It was passed by the Senate on January 13; by the House on March 2; and signed by President Taft on March 3.2 The remaining legislation passed during the Taft administration was not particularly important. The practice of espionage on the business of competitors was dealt with by a clause in the Mann-Elkins Act of 1910, which provided that no carrier or its agent should disclose information concerning either the route, destination, or consignee of any shipment, when such information might be used to the detriment of the shipper, or improperly disclose his business transactions to a competitor.3 The soliciting of such information was likewise made illegal. An act passed March 4, 1911, making an appropriation for the naval service for the fiscal year ending June 30, 1912, provided that "no part of this appropriation shall be expended for the purchase of armor or armament from any persons, firms or corporations, that have entered into any combination, agreement, conspiracy or understanding, the effect, object or purpose of which is to deprive the Government of fair, open and unrestricted competition in letting contracts for the furnishing of any of said armor or armament."4 The act making appropriation for the fiscal year ending June 30, 1913 (passed August 22, 1912), contained a similar provision, somewhat modified in its phraseology, which applied not only to armor and armament, but also to structural steel, ship plates, and machinery.5 The act providing for the opening and operation of the Panama Canal, passed August 24, 1912, contained a clause forbidding the use of the canal to any ship owned, chartered, operated, or controlled by any person or company that was doing business in violation of the Sherman Act of 1890, or sections seventy-three to seventy-seven of the Wilson Tariff Act of 1894, or any act amending or supplementing either of these. The question of fact was to be determined by the courts upon the institution of suit by the shipper or the Attorney General against the owners or operators of the ship. In 1913 also (by the passage of H. R. 25002) sections 73 and 76 of the Wilson Tariff Act of 1894 were modified slightly.2 4 In addition to these bills, a number of resolutions were adopted. Among them were: a House resolution requesting the President to furnish it with information concerning a combination between the United States Steel Corporation and its subsidiary companies; 3 a House resolution appointing a committee (Mr. Hardwick, chairman) to investigate the American Sugar Refining Company; a House resolution appointing a committee (Mr. Stanley, chairman) to investigate the United States Steel Corporation; 5 a Senate resolution appointing a committee (Mr. Clapp, chairman) to report desirable changes in the laws controlling corporations engaged in interstate commerce;' a House resolution to investigate the money trust (Mr. Pujo chairman); and a House resolution directing the Attorney General to inform it whether there was a smelter trust in the United States, including the American Smelting and Refining Company. 8 7 137 Statutes at Large, part I, p. 567. 2 See 37 Statutes at Large, part I, p. 667. 3 Cong. Record, June 16, 1910, p. 8249. 7 Ibid., February 24, 1912, p. 2419. CHAPTER XV 1 THE TRUST LEGISLATION OF 1914 1 LEGISLATIVE HISTORY As the end of President Taft's administration drew near it became clear that no important trust legislation would be enacted. The Democratic party in the summer of 1912 nominated Woodrow Wilson as its candidate for the presidency, and adopted a platform promising warfare on industrial monopoly. The platform repeated the old battle cry, "a private monopoly is indefensible and intolerable," and demanded the enactment of such additional legislation as might be necessary to make it impossible for a private monopoly to exist in the United States.2 Legislation to prevent holding companies, interlocking directorates, price discrimination, and stock-watering was urged. Regret was expressed that the Sherman Act through judicial construction had lost much of its efficacy, and legislation to restore its effectiveness was recommended. Finally, the declaration was made that articles produced by trusts should be placed upon the free list. ་ The Republican platform affirmed the opposition of the Republican party to special privilege and monopoly; congratulated the party upon the passage of the Sherman Act, and its successful enforcement; and asserted that the party would take no back 1 On the trust legislation of 1914 see: Congressional Record; Commercial and Financial Chronicle; Durand, The Trust Problem, ch. 5; Young, The Sherman Act and the New Anti-Trust Legislation, Journal of Political Economy, 23, pp. 201-220, 305-326, and 417-436; Stevens, American Economic Review, 4, pp. 840-855, and 5, pp. 38-54; Seager, Political Science Quarterly, 30, pp. 448-462; Montague, The Federal Trade Commission and the Clayton Act, in Stetson, Some Legal Phases of Corporate Financing, Reorganization and Regulation, pp. 275-326; House Report no. 627, 63rd Cong., 2nd Sess.; Senate Report no. 698, 63rd Cong., 2nd Sess. 2 Campaign Text Book of Democratic Party, 1912, pp. 2, 6. ! |