the expressions of more than one hundred representative citizens had been embodied in the record of its proceedings, culminating in the notable debate upon the proposed Interstate Trade Commission Bill, which Senator Newlands introduced in the committee's behalf." 9. PURPOSE oF RECENT LEGISLATION. Policy of Regulating Competition Instead of Restraining Monopoly, Inaugurated.-Upon the advent of President Wilson's administration he seized the opportunity in January, 1914, to send a message to Congress wherein he outlined a programme for regulating competition and urged the creation of a commission with jurisdiction over practices in this behalf extending to the fields of general trade. Policy Outlined.-The need of the country for new means of adjusting this old difficulty is clearly and forcibly expressed in the following language: "And the business men of the country desire something more than that the menace of legal process in these matters be made explicit and intelligible. They desire the advice, the definite guidance and information which can be supplied by an administrative body, an interstate trade commission. "The opinion of the country would immediately approve of such a commission. It would not wish to see it. empowered to make terms with monopoly or in any sort to assume control of business, as if the Government made itself responsible. It demands such a commission only as an indispensable instrument of information and publicity, as a clearing house for the facts by which both the public and the managers of great business undertakings should be guided, and as an instrumentality for doing justice to business where the processes of the courts or the natural forces of correction outside the courts are inadequate to adjust the remedy to the wrong in a way that will meet all equities and circumstances of the case." President Commends Legislation.-That he felt the responsibility of a correct solution of this momentous question, goes with 5 See Summary of Debate contained in Appendix M, pages 304-334, post. out saying. In a public statement made some months subsequent to the enactment of the Federal Trade Commission Act and the Clayton Law, President Wilson said: "Enterprise has been checked in this country for almost twenty years because men were moving among a maze of interrogation points. They did not know what was going to happen them. It was a very great burden, let me *** say, to fall upon a particular adminstration of this Govern- matic airs of suspicion that have filled the world have now Problems Involved in Solution of Difficulty.-What were the problems to which were attached the "interrogation points" mentioned in the President's address, is succinctly set forth in a list of eleven forms of "unfair competition" compiled by William S. Stevens, of Columbia University, and quoted in the debates upon the then pending Federal Trade Commission Act and Clayton Law: 1. Local price cutting. 2. Operation of bogus "independent" concerns. 3. Maintenance of "fighting ships" and "fighting brands." 4. Lease, sale, purchase, or use of certain articles as a condition of the lease, sale, purchase, or use of other required articles. 5. Exclusive sales and purchase arrangements. 6. Rebates and preferential contracts. 7. Acquisition of exclusive or dominant control of machinery or goods used in the manufacturing process. 8. Manipulation. 9. Blacklists, boycotts, white lists, etc. 10. Espionage and use of detectives. 11. Coercion, threats and intimidation." Reference to the text of these corrective statutes, (Appendices A and B, pages 246-278, post,) will indicate the sincere efforts which Congress at the request of the President and with the co 6 Address before the Conference of the American Electric Railway Association, April, 1915. 7 Cited in The Nation's Business, Washington, D. C., July 15, 1914. operation of the leaders in our world of business, has devoted to the solution of these questions and the removal of the "interrogation points" which have checked and bewildered the initiating force of the country "for almost twenty years." Unfairness in Trading Has Myriad Forms.-It has from the first been realized no specific inhibitions against eleven or any number of unfair practices would or could prevent unfair dealers from finding new means to oppress their competitors, if they were so inclined. It was the intention of Congress to make the legislation so broad as to meet new devices or conditions as they arise, and to that end the words "unfair methods of competition in commerce" which contained the essential prohibitory feature of the several statutes were purposely left undefined as to their scope and meaning. In this manner the laws remain elastic, viz: like "fraud," the definition can be so extended as to meet every form which human cunning or the desire to over-reach can as sume. 10. VIEWS OF LEADING AUTHORITIES QUOTED. Views of Qualified Spokesmen Cited.-How complete has been the success of this supplemental legislation is a question which time alone can answer. It may, however, be at once instructive and encouraging to recite the views of others who, like President Wilson and former-President Taft, have shown a vital interest in solving the problems which long have interfered with the prosperity of the nation. It must be expected that some immediate hardships and losses will occur during the period of transition from an established though faulty system of protecting public interests, to a correct if necessarily somewhat imperfect and experimental one,— and under such circumstances the promise of compensating advantages will come with welcome and heartening effect. At a date slightly posterior to the President's Message to Congress, a gathering of distinguished men from various states and of differing political and business affiliations occurred at the City of Washington for the express purpose of discussing the various phases of the projected interstate trade commission. 8 Second Annual Meeting of the Chamber of Commerce of the U. S. A., held February 12, 1914. References in later notes are to the reprint of speeches, issued by the association. Opinion of Secretary of Commerce.-Secretary of Commerce Redfield' dwelt upon the high mortality existing among promotions which have for their object the control and exploitation of any particular line of trade. He affirmed that "the number of these gigantic organizations that have been conspicuously successful is not very large, nothing like half of those that have come into existence. * It would be perfectly easy to take up line after line in which ten or fifteen years ago a trust dominated the whole situation and show that the independent concerns, starting since, or running independently at the time, have come to be, and are now, the more profitable." This result, he declared, was due to "a law which operates inexorably, beyond which you cannot press the production without increasing the cost of every unit of that product." In that law he saw an opposing force which would regulate those great organizations "to prevent their acquiring the dominant power which some fear." 10 Remarks by President of University of Wisconsin.-Charles R. Van Hise,1o president of the University of Wisconsin, affirmed that competition, when unrestricted, had failed to maintain quality or reduce prices. The waste of competitive effort was excessive. "Co-operation for all classes of business so far as not inimical to the general welfare," under the supervision of an appropriate commission,-was the condition which the public interest and commerce itself demanded. He concluded: "I confidently look forward to a new era of social responsibility on the part of both the well-to-do and the poor, to a time when reason and science rather than vested interest or passion, shall control economic legislation." As Seen from the Legal View Point.-Victor Morawetz11 law writer and economist, dwelt upon the definite meaning which the Sherman Law had derived from the Standard Oil and Tobacco decisions of the Supreme Court. He deprecated, however, hasty or vindictive legislation to extend or supplement the anti-trust laws. "To hamper honest and legitimate enterprise merely to strike at those who break the law, or benefit themselves by illegitimate means, would not be enlightened and wise legislation. * Undoubtedly, some legislation supplementary to 9 Id., page 2. the Anti-trust Act is desirable. The creation of a trade commission consisting of experienced and able men would be a wise step. It would be a step forward.” Opinion by Representative of Important Business Interests. -Frederick P. Fish," former president of the Amerian Telephone and Telegraph Company, asserted that—“Great business enterprises feel as never before the force of public sentiment and they are now in a chastened frame of mind which leads them to respect the universal demand that they should not deal harshly or unreasonably in their competition with those who are less strong than they.” And, at an earlier place he said—“If the principles of the Sherman Law are valid some way must be found by which small concerns as well as large may be restrained from unfair competition or our whole industrial fabric may be shaken." His conclusion consisted in suggesting a preliminary commission which shall study the whole anti-trust field and recommend to Congress such supplemental legislation as will regulate all business competition, without endangering vested rights and interests. Remarks and Suggestions by an Experienced Manufacturer. -Henry R. Towne,13 engineer and manufacturer, after a review of the existing and proposed anti-trust laws, discussed the proposed Interstate Trade Commission, and declared-"A new tribunal of this kind is unquestionably desirable, and its ultimate usefulness should equal that of the Interstate Commerce Commission. Business needs it and if it is properly constituted will welcome it. * * * The Tariff and Currency questions are disposed of. The creation of an Interstate Trade Commission, and the enactment of a clear and simple law defining its powers and duties will complete the triad by disposing of the anti-trust problem * Opinion by Another Representative of Manufacturing Interests.-Guy E. Tripp, chairman of the Board of Directors, Westinghouse Electric and Manufacturing Company, analyzed the proposed legislation, and in the course of his remarks, said: "But I believe that our political institutions and the temper of our people [in contradistinction to those of foreign countries, particularly Germany] are not adapted to monopolistic methods that are 12 Id., page 35. 13 Id., page 56. 14 Id., page 61. |