understood it; have paid for their lands; have invested everything in starting development and face bankruptcy if a decision is made against them. open to wise development. Secretary Fisher's plan - Government ownership of the coal lands with a system of strict leases to corporations-is strongly favored by President Taft, Mr. Pinchot, Col. Roosevelt, and the majority of the Ballinger investigating committee. One difficulty lies in the fact that the law has unduly limited the number of acres which might be worked together. An individual was permitted to claim, or make preliminary purchase of, 160 acres, and a company 640, but if there was any agreement or understanding that two or more of these claims were to be worked as a whole, they would become illegal and be disallowed by the government. Yet it is universally admitted to be impossible to mine the coal ac- There is no doubt that Congress cording to modern methods unless has neglected Alaska, just as it has many of the claims are united. The neglected Guam and Tutuila, and act of 1906, the year in which Presi- that the neglect is due in large measdent Roosevelt withdrew all govern- ure to the absence of any government lands from further sale, provid- mental body whose sole duty shall ed that preliminary purchases, if made be to supervise the administration of without any agreement to combine these dependencies. A bill to create with others, might be consolidated, a Commission for Alaska, similar to provided no single holding contained the Panama Canal Commission, to over 2,560 acres of contiguous land. During the past few years Congress has been repeatedly urged to legislate further for the situation, but has not done so. (See XII, Alaska.) Secretary Fisher's Trip to Alaska. -To obtain as much light as possible upon actual conditions Secretary Fisher was sent to investigate the coal district in Alaska. Upon his return in September he reported that President Taft's action in releasing land on Controller Bay had not and could not create a monopoly, since there was plenty of other land on the same bay equally valuable for railroad purposes, and since there were other outlets for the Bering fields even more desirable than Controller Bay. He stated that the value of these coal deposits had been greatly exaggerated, and that he favored action which would give quick and adequate relief to Alaska. In an address before the American Mining Congress at Chicago, Oct. 28, Secretary Fisher said: The existing coal land laws applicable to Alaska neither promote development nor protect the public, and all its coal fields are withdrawn from entry. The immediately important thing is that the Bering coal field should be take charge of the development of the country, was introduced at the special session by Senator La Follette. The Conservation Congress.-The third annual session of the National Conservation Congress met at Kansas City, Sept. 25-27, with an attendance of over 1,000 delegates. The discussion centered on the conservation of the soil. Different speakers pointed out the necessity for scientific farming in place of the mere "soil-robbery" of the 19th century; and the need of making rural life more attractive for the women and children of the farms. President Taft, who was one of the speakers, outlined a plan by which the United States Government should coöperate with state and county authorities in placing a farm expert in every county, so far as possible, in order to investigate local soil conditions and advise the farmers as to the best possible methods of agriculture. (See also XXII, Agriculture.) Public Lands Convention.-A few days after the adjournment of the National Conservation Congress there met at Denver a Public Lands Convention. Ex-Secretary Ballinger was one of the leading speakers and the chief spokesman of those who favored state instead of federal control of been found in inducing the land public lands. He vigorously attacked the leasing plan which Secretary Fisher had outlined the week before at Kansas City; and declared that "no more gigantic political scheme has ever been attempted in the history of the Republic.' In accord with Mr. Ballinger's views the convention, which was widely attended, passed a series of resolutions condemning the government's policy of retaining the ownership of the public lands and then leasing them. After these resolutions had been passed President Taft arrived to address the delegates; he explained and strongly defended the leasing policy and plainly told the convention that he believed they were wrong. In regard to the leasing of coal lands he said: "You want something done whereby the capitalist who invests his money may be assured of a fair return. You think the leasing system won't do that. I say it will." Conservation of Forests. After years of agitation Congress passed an act, Feb. 15, for the protection and preservation of the Appalachian and White Mountain forests. This act provides that any state or group of states may make arrangements with the Secretary of Agriculture for the protection of forests from fire, the states and the national government to divide the cost of maintaining fire control. It appropriates $1,000,000 for the next fiscal year, and not over $2,000,000 for each succeeding year until 1915, for the purchase, with the consent of the state concerned, of forests situated on the headwaters of navigable streams. A National Forest Reservation Commission is to determine which lands are to be purchased. Purchase must be authorized by the Commission upon recommendation of the Secretary of Agriculture, after a report by the Geological Survey "showing that the control of such lands will promote or protect the navigation of streams upon whose watershed they lie." After the lands have been secured they are to be maintained permanently as national reserves. Since the passage of the act the government has endeavored to purchase sufficient forest land in the White Mountains to protect the watershed. Considerable difficulty has owners, especially on the Southern slope, to sell their holdings; but the National Commission has final authority to enforce sales if it deems this necessary. The first purchase of land under this act comprises a section of 18,500 acres in McDowell County, N. C., the official authorization for which was announced Dec. 12. (See XXII, Forestry.) The importance of the conservation of national timber resources has been emphasized by the report from the Bureau of Corporations giving the results of its four-years investigation into the condition of American forests. The report, made to the President in April, points out that while forty years ago the United States Government owned three-fourths of the timber supply, it now owns but one-fifth; that the control of the existing forests is being concentrated in a few enormous holdings which steadily tend to create a monopoly of the lumber industry; and that these timber resources are still being exhausted, the annual growth being only about one-third of the present annual cut. The Supreme Court on Conservation.-The Supreme Court decided, May 1st, that the federal government might set aside large areas of its public lands as a national forest reserve, without obtaining the consent of the state affected, and that such reserve is not subject to the state fencing laws. The case arose from the acts of certain cattlemen in Colorado who pastured their herds on national forest-reserve land without making any effort to secure permits from the proper federal authorities. It was contended in their defence that a state law of Colorado provided that no damages done by animals could be recovered unless the land had been enclosed by a fence; and, furthermore, that the reservation of vast tracts in Colorado was unconstitutional, in that it was a denial of equality with the older states, which had been allowed to control all the territory within their boundaries. The decision is a striking victory for those citizens of the United States who believe in a strong national conservation policy. TRUSTS AND CORPORATIONS The trust problem during the past year has received much attention from both the Government and the public. Besides its unceasing discussion in the press and the continued prosecutions and investigations by the administration and by Congress, there have been a number of notable decisions by the Supreme Court and the Interstate Commerce Commission which have attempted to define with greater exactness both the obligations and the rights of great corporations. On the one hand, the railroads have been subjected to a more strict national supervision; on the other, it has been decided that not all business combinations are illegal. A solution of the trust problem, however, is not yet in sight. Railroad Decisions. During the early part of 1910 the railroads of the country announced a schedule of increased freight rates, which it was estimated would bring them an additional annual revenue of from $50,000,000 to $60,000,000. This new schedule, however, was suspended June 29, 1910, by the Interstate Commerce Commission pending an investigation. When this took place the representatives of the railroads claimed that the higher charge was necessary in order to meet the increase in the cost of supplies and labor; while Louis D. Brandeis, the chief counsel for the shippers who opposed the new schedule, pointed out that the railroads did not so much need additional revenue as they did a reduction in expenses, which could be brought about by scientific management. (See also XXXII, Industrial Management.) The Commission, Feb. 23, refused the request of the railroads and, with the exception of some concessions to the lines in the Southwest, ordered them to retain in force their existing rates. The decision said: "There is no evidence before us which establishes the necessity for higher rates. From the standpoint of net revenue and of dividends upon stock the railroads of the United States as a whole have never before prospered they did in 1910." as Other decisions, only less important, have restrained the transportation companies in rate making. March 24, the Interstate Commerce Commission decreed that no reductions in freight charges should be made for goods shipped for the use of railroads. July 24, it ordered a material lowering of rates from the East to points such as Reno and Spokane, which lie between Denver and the Pacific terminals of the great transcontinental lines. For some years the freight charges to these intermediate points have been about as much as they have been to the Pacific coast citiesSeattle or San Francisco and then back again. This has been justified by the claim that the roads must make their through transcontinental rates especially low, in order to meet the competition of the cheap ocean schedules from the Atlantic to the Pacific. The Commission permitted the roads still to charge more for the relatively "short haul" from the East to the middle-western cities than for the "long haul" through to the coast, but decided that the existing rates were excessive. These rate reductions, however, were later suspended by order of the Commerce Court which was created by act of June 18, 1910, to have jurisdiction over most matters passed upon by the Interstate Commerce Commission. The final decision in this case will be made by the Supreme Court. A very significant ruling was given by the Commission in March. against the Washington, Alexandria and Mt. Vernon Railroad. Although this company was earning but 2 per cent. on its capital stock, it was ordered to make a 33 per cent. reduction in fares, since these were deemed excessive as based upon the real value of the property. Should the principle of this decision be carried out, it would require a valuation of all railroads in the United States, and the levying of charges based upon this valuation rather than upon capital stock. The Minnesota rate cases, decided by Judge Sanborn in the United States Circuit Court at St. Paul, to file briefs against Judge Sanborn's April 8, limited the power of the in- decision. dividual states over the lines within their respective boundaries, by subordinating it to the authority of the Interstate Commerce Commission. The decision annulled reductions which the Minnesota Railway Commission had ordered, on the ground that, although these applied only within the state, they yet affected unjustly the commerce between the states, which was under the jurisdiction of the Interstate Commerce Commission. This unprecedented proceeding has aroused widespread discussion, and has received nearly an equal measure of praise and of condemnation. It is admitted by all, however, that there should be some authority empowered to regulate railroad matters within the several states, and that there must be no "twilight zone" between the nation and the state which neither can control. One fundamental question is whether in railroad regulations federal or state authority shall be paramount. Railroad Securities Commission Report.-When the Mann-Elkins act of June 18, 1910, was under discussion in Congress, the House added an amendment placing all future issues of railroad stocks and bonds under the supervision and control of the Interstate Commerce Commission. Upon objection by the Senate, it was agreed that the amendment should be dropped, but that the President should appoint a commission to study the subject. Sept. 5, 1910, President A. T. Hadley of Yale, was selected as chairman of a board of five railroad experts. This commission reported, Dec. 11, 1911, that the proposed Federal regulation of the issue of new securities was undesirable so long as the several states exercised the same right; but recommended that a Federal incorporation act should be passed, permitting railroad companies to exchange their state charters for ones which would place them exclusively under Federal control. The commission stated further that full publicity for all railroad financing, enforced by laws, was the best security against such an evil as stockwatering; but that it would be unwise to limit the dividend rates, or base freight schedules solely upon a physical valuation of railroad property, or make outstanding securities conform to any arbitrary standard, or absolutely forbid companies to own stock in other roads. In summary, the commission favored the future extension of Federal control, but strongly opposed most of the popular proposals for the radical limitation of the powers and the privileges of railroad companies. The Standard Oil trust, in accord with the decree of the Supreme Court, was legally dissolved Sept. 1. The Standard Oil Co. of New Jersey, the parent organization, which controlled the oil industry of the country through its ownership of practically the entire capital stock of 33 other corporations, relinquished its control over them by giving to each of its own stockholders, Dec. 1, his proportionate share in the stock of each of these 33 minor companies. Since the same small group of men which dominated the trust now controls each of these independent companies, vigorous competition is hardly to be expected in the immediate future. Trust Decisions.-The most important decision ever given in the United States in regard to trusts and combinations was rendered by the Supreme Court May 15 in the Standard Oil case. This company, in the judgment of the lower courts, had violated the Sherman anti-trust act of 1890, which provided that "every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the several states, or with foreign nations, is illegal." The Supreme Court laid down the general rule, with the single dissenting opinion of Justice Harlan, that combinations which restrain trade in some degree are not necessarily illegal, but The organization of the Tobacco only those which "unduly restrain" trust was such a complicated one it, which are actually monopolistic, that the attempt to break it up into whose "direct and necessary effect" its constitutent elements was, in the is to stifle competition; and that in words of J. P. Morgan, like trying deciding whether a combination is il- to "unscramble eggs." The officers legal the Court must follow "the of the American Tobacco Co. finally standard of reason." Applying this laid before the Circuit Court for its principle to the Standard Oil Co., the approval a complicated plan by which Court decided unanimously that it four distinct companies would be was an illegal combination, and grant- formed from the Trust, "no one of ed it six months in which to dissolve which will have a controlling influence into its constituent companies. Two in the tobacco business." "None of weeks later the same Court unani- the four companies," the officers mously decided that the Tobacco stated, "will have any interest in or trust was also illegal, and directed the United States Circuit Court of New York to assist it in arranging some plan "recreating out of the elements now composing it a new condition which shall be honestly in harmony with and not repugnant to the law." (See also VII, Law and Jurisprudence; and XIII, Government Control of Corporations.) These decisions were generally acceptable to the business world at the time they were rendered, for they seemed to throw some light upon what corporations might and what they might not do. Business confidence was further strengthened when, shortly afterwards, June 23, the United States Circuit Court in Utah applied the principles thus laid down, by deciding that the Union Pacific Railroad Company had not violated the anti-trust act by acquiring control of the Southern Pacific road, since these two systems were not really competitors at the time of the merger. relation to the other, although at the outset they will of necessity have many stockholders in common." This plan was strongly opposed by the independent tobacco manufacturers on the ground that the same few men who controlled the Trust would dominate the proposed four companies. The Circuit Court took the plan under advisement Oct. 31, and approved it Nov. 8, with the proviso that, for a period of three years, the leaders of the former trust must not increase their holdings of stock in any of the newly-created companies. Dec. 11, the Supreme Court refused to interfere with this reorganization plan. The government has also won important victories against the trusts in the United States Circuit Courts. At Baltimore, Oct. 13, the Court decided that the Standard Sanitary Manufacturing Co. and others, commonly known as the bathtub trust, formed a combination in violation of the Sherman anti-trust law and ordered its dissolution. The same |