is the imposition of greater burdens upon the accumulated wealth. This means a renewed emphasis on the social origin and character of property and therefore on the right of limiting it, not only to prevent unjust accumulation, but any accumulation which in character or amount threatens the welfare of society. This question is before the country now in the suit against the Harvester Trust. According to the prosecution in this case, the organization and power of the trust are such that "if the International Harvester Company were disposed to exercise the power its enormous wealth gives, and if it were left unrestrained to do so, it could drive every competitor it has from the field." It is necessary to notice that there is no new legal, ethical, or social principle involved in this doctrine, although the wisdom of extending the principle at present may be an open question.

Some general consequences of these proposals must not pass unnoticed. Undoubtedly, a certain amount of good can be done by proper supervision to prevent the oppression of the weak by the strong and the impairment of the public welfare. It may be true that, as one writer puts the matter, the present movement is an attempt by the community to resume sovereign power in order to conserve the right of the individual to make his living. But bureaucratic supervision can never be a permanent substitute for proper standards of righteousness among men in their dealings with one another. We may have an honest and efficient officialdom that puts the common weal above corporate and personal interest, but we cannot have it for very long. The inherent weakness of wide and intense government regulation is its lack of motive to take advantage of new conditions to further progress; whereas the inherent strength of a system of individual initiative is the presence of that motive.

If any of the proposed policies is to win final success in improving the condition of any class of society, or of all classes, it can do so only by increasing the sense of responsibility of those directly affected. For those who have made any study of attempts to improve human society through long periods must feel very deeply "how great is the ignorance of the wise, the weakness of the strong, the folly of the prudent and the helplessness of the well-meaning.' They will realize that we "cannot sweep away any one thing without upsetting innumerable other things, good, bad, and indifferent."

The adoption of the policies that we have been discussing may mean a period of comparatively stationary economic life. In so far as we clip the wings of motive we impede rapidity of motion. Yet it may be well sometimes to do this. For abundance, irrespective of distribution, will not necessarily produce welfare. What a nation may need may be an abundance sufficient for social welfare according to definite ideals, even though it may not be so great an abundance as with different ideals might be obtained.

It is true that progress in invention and discovery may still go on if bureaucratic oversight should check industry. It will do so, however, only if a sufficient margin of advantage is left with the enterprising pioneer in the future as in the past. A return to the intensive, minute, supervision over industry which prevailed under the old mercantile system would defeat its own purpose. Yet it is hard to tell where to stop when once we use the arm of government for economic purposes. It is doubtful whether in this country the public will endure the menace to liberty involved in very intensive supervision. It is doubtful whether, if the supervision were successful, we should be better off in the long run, and we should have lost all the advantages that have accrued to us under the great system of economic liberalism. Although, then, there is good in the proposition for the extension of government activity into business, the field of its operation must be carefully limited. Can we, in conclusion, lay down briefly some of the limits within which it should be confined?

I venture to suggest, first, that reasonable welfare legislation, as has already been remarked, is accepted by the American public as proper, and that our various governments may concern themselves with extending this without objection.

In the second place, government may properly attempt a delimitation and regulation of industries which are monopolies by nature. It may also segregate those, if any, which are likely to be most serviceable to the public and to their owners when treated as monopolies. Although there is room for difference of opinion on details, the principle is generally accepted now that the private enterprises which commonly go under the name of public utilities are best treated as monopolies to be carried on under proper reasonable supervision.

In the next place, the government may properly continue its policy of compelling the trusts to dissolve into their component industries and of requiring big business enterprises to resolve themselves into units of the most efficient size. To accomplish this purpose properly, the government should undertake an investigation of what constitutes a unit of greatest efficiency in the more common big businesses. Having determined this, the law should prevent the organization of businesses which will exceed this most efficient unit in size unless the advance in the arts makes it possible to prove that some larger or different organization is better, in which case the law should be adapted to the new conditions.

Again, the utmost publicity compatible with the rights of business should be given to the transactions of corporations, whether monopolistic or other. But it is hard to justify the minuteness of the inquiries which some of our commissions now propose into various lines of business.

In the next place, the law may very properly forbid agreements

fixing prices by producers or distributors of goods. The law may further properly provide a minimum standard of wages for industries in which labor is obviously exploited. Still further, few will object to reasonable increase in the burdens imposed upon great aggregations of wealth for the general welfare, especially when these aggregations of wealth have come from sources that give them a large social element. Finally, the attitude of our courts towards the character and acts of corporations needs readjustment. There is some ground for believing that from the point of view of the interests of society, it was a mistake to give corporations the attributes of personality. In any event, there is a demand that personal responsibility for corporate acts shall be fixed upon the officers in such ways as to prevent the recurrence of some of the evils that have given rise to the hostility towards corporations. !

One inevitable consequence of the establishment of the principle of government control of economic life must not be lost sight of even if its early appearance is unlikely. Regulation by a government which is the people, for the people, tends to be regulation of the people by a government in spite of the people. Regulation of industrial life in behalf of some means repression of the activities of some others. The government, as such, once recognized as having a right to regulate economic conditions, will be pushed by the ruling class or classes towards regulation or control of the rights of others in politics, religion, and other ways; for economic privileges or rights cannot crystallize into custom and be cast into law in behalf of some as against others without imposing upon the "some" corresponding duties which become privileges or rights of the "others." This process means a slow crystallization of economic status and the production of classes in society.

These, then, are the principal lines of proposed wider government activity at present before the public, in this country and in England. Their significance is far reaching. While declaring no new legal principle, they gave a different color to accepted doctrine. The emphasis is now to be put upon the rights of the community in private property and to private property, rather than on those of the individual owner. The movement means that the acquirement of property to an extent that may endanger the public welfare is to be restricted. Laws should be framed, we are told, to care for the worker rather than for industry. In other words, the new movement is an attempt to establish by authority the individualism -conditions of welfare which individ

ual action itself has failed to achieve. The whole movement imports a lessening of the importance of private property, and a strengthening of the importance of men; an emphasis of public weal as against private gain; a demand for more equality in economic conditions, and greater social responsibility for wealth.

BUSINESS ENTERPRISE AND THE LAW

BY GILBERT HOLLAND MONTAGUE, OF THE NEW YORK BAR

(From the North American Review, November, 1910)

From the end of the Civil War until the passage of the Interstate Commerce Act and the Sherman Anti-Trust Act, popular faith in competition, unhindered by governmental interference, continued practically undisturbed. "In the early history of railroad transportation," said Attorney-General Moody, later Justice of the Supreme Court of the United States, in his annual report for 1906, "the practice of rebating was common, well understood, and not prohibited by any Federal statute. It was regarded as one aspect of the spirit of competition which the common law cherished." The last century conception of competition and freedom of contract and absolute individualism of conduct, unhampered by any legal restrictions, was rooted in the theory of the Declaration of Independence and the Constitution, and fostered by the tremendous commercial progress which it had produced. Against this principle, the Interstate Commerce Act, which prohibited private bargaining between the railroad and the shipper, and the Sherman Anti-Trust Act, which forbade the attainment of industrial dominance, toward which all competition aimed, seemed incongruous and irrational contradictions, weapons pusillanimously seized by the industrially unfit against their superiors. The spiritless enforcement of these statutes, from the time of their enactment until 1903, shows how pharisaical they were generally considered by the community. "A careful examination," to quote again from Attorney-General Moody, "discloses that there were in those years seventy-nine indictments (under the Interstate Commerce Act), upon which the Government failed in sixty-two and succeeded in seventeen. No sentences of imprisonment were executed and the total fines amounted to $16,376. It is safe to say that these penalties, distributed over many years, were, as deterrents from the commission of prohibited offenses, a negligible factor." The indifferent enforcement of the Sherman Anti-Trust Act was still more conspicuous. Attorney-General Olney, in his annual report for 1893, protested "that as all ownership of property is of itself a monopoly, and as every business contract or transaction may be viewed as a combination which more or less restrains some part or kind of trade or commerce, any literal application of the provisions of the statute is out of the question." Reviewing the prosecutions, brought under the Sherman Anti-Trust Act during this period, Attorney-General Moody stated: "From the date of the enactment of the law to the beginning of

President Roosevelt's administration in 1901, sixteen proceedings were begun and have been concluded — five of them indictments, in all of which the Government has failed, and eleven of them petitions in equity, in which the Government prevailed in eight and failed in three. The apathetic enforcement of the Interstate Commerce Act and the Sherman Anti-Trust Act, during this period, was due not so much to reluctance on the part of the prosecutors as to the conviction of the community that a vigorous enforcement of these statutes was contrary to the approved mode of business competition. / / During the decade immediately succeeding the war with Spain, a series of events occurred which shook this long-cherished popular belief. Investigation into the management of certain railroads, insurance companies, and street railways revealed startling corruption and dishonesty. Newspapers and magazine-writers attacked methods. of business competition which previously had never been questioned. / The indignation thus engendered stirred depths of popular conscience which had never been aroused by the agitation for the Interstate Commerce Act, nor by the clamor for the Sherman Anti-Trust Act. The opinion grew that business competition, at least in some of its manifestations, was a crude and unjust force in the social economy.

In 1903, the Roosevelt administration had practically only two statutes through which the Federal Government could exercise any control or interference with competition. These statutes were the Interstate Commerce Act and the Sherman Anti-Trust Act.

In response to increasing popular demand, Congress appropriated, in 1903, $500,000 to be expended by the Attorney-General in prosecutions under these statutes. At the same time, acts were passed facilitating trials under these statutes, and particularly strengthening the hands of the Government in dealing with discriminatory practices of railroads. The Department of Commerce and Labor was created, and invested with abundant powers to investigate large business concerns everywhere.

In 1903, the Interstate Commerce Commission stated that discriminatory practices were no longer characteristic of railroad operations, and that never before had the law been so strictly observed.

In 1905, however, came the revelations of the collusion between certain freight shippers and several high officials of the Pennsylvania Railroad. About the same time came the disclosures regarding conspicuous breaches of trust on the part of certain officers of the largest life-insurance companies in the country.

Responding again to popular demand, each Federal prosecuting officer was instructed, in a circular letter from the Attorney-General, to proceed in each case brought to his attention showing a violation. of the Interstate Commerce Act and the Sherman Anti-Trust Act. As a result, seventy-seven indictments were returned under the In