Constitutionality thereof Considered.-Perhaps in that event the Supreme Court would have applied a different rule in the Knight case, and the right to regulate production and manufacture would have been declared within the constitutional authority to legislate conferred by the "Commerce" clause. The Sherman Law has exercised a salutary influence in a wide field; but much territory it could not or at least did not reach, and in that unregulated zone conditions that cause and attend unrestricted trusts and monopolies have had opportunities to produce their logical results. 8. SCOPE AND EFFECT OF LAW AS ENACTED. Consideration from General View Point, Continued.Those who wish to study the conditions from which the Sherman Law evolved will find the essential facts set forth in an interesting and reliable form in Walker's History of the Sherman Law; while reference to Appendix M, page 304, post, will disclose the source of the Acts to Regulate Commerce, which, beginning with the original law of 1887 instituting the Interstate Commerce Commission," have since broadened out in various particulars. While these laws are not technically included in the list of Anti-trust laws contained in Section I of the Clayton Law,-the Interstate Commerce Commission is referred to at various places in that statute and in its attendant law, the Federal Trade Commission Act. The form and procedure of the Interstate Commerce Commission have been copied so closely that attention to the terms of the Acts to Regulate Commerce will be of great service towards a clear understanding of the subject of Anti-trust legislation,— including the Sherman Law, which followed in 1890, only three years later than the enactment of the creating act. As has been stated, the Acts to Regulate Commerce, like the Federal Trade Commission Act, are not enumerated among the Anti-trust laws; but they are all correlated, and at the very least should be regarded as attendant enactments which are vital and necessary to complete the scheme and make it effectual. In an instructive contribution on the subject in hand, a recent writer has indicated that in his opinion the provision of the Constitution empowering Congress to regulate commerce was first in 4a For text of statute, see Appendix O, pages 345-361. 5 James A. Fayne: "The Federal Trade Commission; The Development of the Law which Led to Its Enactment,"-The American Political Science Review, February, 1915. terpreted in 1876 in such a way as to charge business with a public interest. The case he quotes is Munn v. Illinois, 94 U. S. 113, and the issue involved therein grew out of the assertion by certain elevator owners of the right to collect discriminatory charges for storing grain. The Supreme Court held in accordance with an English authority, Lord Chief Justice Hale, in De Portibus Maris,— "looking then to the common law, from whence came the rights which the Constitution protects, we find that when private property is 'affected with a public interest, it ceases to be private property only." " In finding that the warehouse of the appealing party was so charged with a public interest, the Supreme Court stated— "while the rights of property which have been created by the common law cannot be taken away without due process" * * * due process can be altered at the will of the legislators within constitutional limitations, and it is the province and function of that department of government to remedy defects in the common law as they are developed and adapt it to the changes of time and circumstances." Such being the rule when the enactments of a State legislature are concerned, the rule in matters within the power of Congress is still broader and less circumscribed, seeing that the common law as such does not enter directly into Federal jurisprudence, leaving the legislative rights untrammeled except by boundaries which the Constitution itself prescribes. It is not difficult from this beginning (if it be the fountain head), to follow the flow of the stream through intermediate holdings including the Standard Oil and the Tobacco cases down to the natural outlet in an interstate trade commission equipped to enforce conditions of equality in right to trade, by the abolition of illegal restraints and combinations. In contradistinction to the narrowing tendency shown in the Knight case,-holding that manufacture is not "commerce," (see page 77), it may be pointed out that the courts have of late held the ownership of forty-six per cent. without the employment of 6 U. S. v. E. C. Knight, 156 U. S. 1. sence an intermediary holding company, is a prohibited act where the servient company is a potential competitor. Even when "an abof all the elements of undue injury to the public and undue restraint of trade" is shown to exist, there is still a violation of the second section of the Sherman Law where the tendency of the combination was to destroy competition and create and maintain a monopoly. This is the latest authoritative decision; and it seems to prepare the way for the Federal Trade Commission with its prime purpose of overcoming the twin obstacles-undue combinations and unfair competition. This decision (the Harvester Case) is by the United States Circuit Court of Appeals. It has yet to stand the test of scrutiny and review in the appeal now pending in the Supreme Court; but until the decision is modified or reversed, it constitutes the latest authoritative judicial version of the doctrines which have grown to be controlling in Anti-trust proceedings. The decision goes very far, and while logical in its reasoning, it may well be that the Supreme Court will regard the requirements impossible of performance, under actual business conditions in the world of large finance. Whatever the outcome of this important appeal, it is not at all probable the rules controlling in Anti-trust litigations will experience any radical change, for those principles are now established firmly as a part of our jurisprudence, and as is noted by the author of the valuable article referred to on page 77, "in both [the Union Pacific merger and the Harvester] cases no new expressions of opinion were recorded." In brief, recent decisions have turned upon how far or in what manner principles now recognized as established shall be applied. 9. CONSTITUTIONAL QUESTIONS SETTLED BY SUPREME COURT. Judicial Construction Appears Settled.-Even though the Supreme Court does not affirm the Harvester decision, the legal aspect may be considered a closed incident, for (as has been mentioned), in neither of these important decisions is there a new expression of opinion on the substantive Anti-trust laws. After the tumultous legal proceedings wherein the Standard Oil Com 7 U. S. v. Union Pacific Railroad, 226 U. S. 306. 8 U. S. v. Int. Harvester Co., 214 Fed. 987. pany was fined $26,000,000 in the lower courts, and the American Tobacco Company had damages enforced against it under the treble damage clause of the Sherman Act, this condition appears like a halcyon period indeed, wherein the new Commission can begin the performance of its duties, with a confidence based upon results that a long and hard fought litigation has produced. Constitutional Question.-The question of the constitutionality of the Sherman Law having been thus disposed of, with it are adjusted problems that might otherwise come up in reference to the statutes not within the list of Anti-trust laws, as strictly enumerated in the statutes themselves. The Sherman Law is within the enumerated class; but the decisions relating thereto are for the most part applicable to all. In the Northern Securities case, it was held that a large discretion pertains to Congress when it is performing its legislative duties, and that a sound construction allows great latitude "with respect to the means by which the powers it confers are to be carried into execution, which enable that body to perform the high duties assigned to it, in the manner most beneficial to the people." Under a case of equal authority,10 the Supreme Court held in applying the "commerce" clause of the Constitution in its relation to the Sherman Law: "Under this grant of power to Congress, that body, in our judgment, may enact such legislation as shall declare void and prohibit the performance of any contract between individuals or corporations where the natural and direct effect of such a contract will be, when carried out, to directly and not as a mere incident to other and innocent purposes, regulate, to any substantial effect, interstate commerce." The above case as to its facts disclosed an ingenious device whereby manufacturers of pipe within a certain district joined a combination and every member agreed under penalty to sell only subject to its rules. Each contract was submitted to competition within the combination, and the successful bidder was then free to undertake the work at the best terms he could obtain, without competition from his associate members. This plan in 9 U. S. v. Northern Securities Co., 193 U. S. 197. sured some profit to all, but at an additional cost to the public. To the same effect upon the constitutional question involved, is a State court decision: "The State has a right to limit individual rights when their exercises touches the public, and, if unrestrained, would be prejudicial to order or to progress."11 In the same court it had already been held and declared that a trust is illegal under the common law.12 12 10. BENEFITS FROM ANTI-TRUST ACT. Interpretation and Application of Act.-The object sought to be accomplished by the Sherman Act is to afford a remedy for the injurious effect of unrestrained competition. Like most principles of wide application in the personal or business affairs of men, competition ceases to be an advantage-far less an infallible panacea-when applied without limit or modification to many tangible and concrete situations. Competition then becomes a "glittering generality" and is only too likely to mislead the confiding individual or nation. Just as it has been held "the great office of the statutes is to remedy defects in the common law as they are developed and to adapt it to the changes of time and circumstances" (Munn v. Ililnois, 94 U. S. 113), socialism has entered into the everyday problems of modern society and has endeavored to solve them to the end that the ordinary citizen shall not find existence too hard or too complex to be borne. The saying attributed to Lincoln, "God loved the common people-he made so many of them," has an application here, for the State must concern itself with the welfare of its individual citizens, since in times of peace their composite condition and wealth is the measure-the sum total-of its prosperity and material resources; and from their numbers must be gathered the lists that elect public officials and supply jurors; while in seasons of war their courage and patriotism are its sure defense. Socialistic Influences are Apparent.-Socialism, unconsciously to most of the persons concerned, enters into the make up of political life and affairs. Thus, the childless pay their full proportion of the tax for maintaining schools in recognition of the 11 Wood v. Whitehead Bros., 165 N. Y. 545, 550. 12 People v. North River Sugar Co., 121 N. Y. 582. |