1st Session. Part 2. PROTECTION OF TRADE AND COMMERCE AGAINST UNLAWFUL RESTRAINTS AND MONOPOLIES. MAY 21, 1900.-Referred to the House Calendar and ordered to be printed. Mr. TERRY, from the Committee on the Judiciary, submitted the following as the VIEWS OF THE MINORITY. [To accompany H. R. 10539.] The undersigned members of the Committee on the Judiciary, to whom was referred the bill H. R. 10539, while fully agreeing with the majority of said committee as to the "evil effects of trusts, monoplies, and combinations," were not able to agree with them in thinking that H. R. 10539, with the amendments reported by said committee, is sufficient legislation on the subject, and we can not concur in their belief that section 9 of their measure "exhausts the constitutional power of Congress in controlling by penal provisions trusts or monopolies in the manufacture and sale of articles of commerce." Perchance it may turn out that in the war against trusts, so vigorously started out with, it was not the Constitution that became exhausted. This much-vaunted "section 9" hinges everything upon the "purpose" or intent with which the corporation or association was organized or formed. In this particular we regard it as extremely weak. We think that it is the direct effect of the operations of such a corporation, and not simply the purpose for which it was formed, that must be mainly looked at. No doubt they are all formed and "carry on business" for the "purpose" of putting money into the pockets of their promoters; but their effects upon the public are eminently dis astrous. In one of the latest cases upon this question (Addyston Pipe and Steel Co. v. United States), decided December 4, 1899, the United States Supreme Court said:" If the necessary direct and immediate effect of the contract be to violate a law of Congress and also to restrain and regulate interstate commerce, it is manifestly immaterial whether the design to so regulate was or was not in existence when the contract was entered into. Further on the court said: Where the contract affects interstate commerce only incidentally and not directly the fact that it was not designed or intended to affect such commerce is simply an additional reason for holding the contract valid and not touched by the act of Congress. See page 16 of No. 51, October term United States Supreme Court, December 4, 1899. In order to strengthen section 9, we offer this amendment: Strike out all after the figure "9" in said section 9 and make it read as follows: SEC. 9. That every corporation, association, joint stock company, or partnership formed or made, or managing or carrying on its business, in whole or in part, for the purpose of controlling or monopolizing, or in such manner as to control or monopolize, or tend to control or monopolize, the manufacture, production, or sale of any article of commerce or merchandise, intended for interstate commerce or commerce with foreign countries, or for the purpose of controlling or increasing or decreasing the cost or price of the same to the purchaser, user, or consumer thereof, for the purpose of preventing, or in such manner as to prevent, competition, or of preventing competition in the manufacture, production, or sale thereof, is, for the purposes of this act, hereby declared to be illegal and a monopoly, and all such corporations, associations, joint stock companies, and partnerships, and their officers, agents, managers, and attorneys are hereby forbidden and prohibited from shipping or putting in transit any such article of commerce or merchandise to any State, Territory, foreign country, or place, outside the State, Territory, or place in which it was manufactured or produced, and from selling or offering to sell any such article or merchandise to be so shipped or put into any such transit, unless for the private or personal use of the consignee; and for any violation of this provision shall be deemed guilty of an offense against the United States, and on conviction shall be punished by a fine of not less than five hundred dollars nor more than five thousand dollars, and by imprisonment not less than thirty days nor more than six months. All such corporations, associations, joint-stock companies, and partnerships as above declared illegal shall be, and hereby are, forbidden and prohibited the use of the United States mail in aid or furtherance of any such business or purposes, and all laws now in force for the prevention of the fraudulent use of the mails, so far as the same may be applicable, shall apply in the execution of such prohibition. Any such corporation, association, joint-stock company, or partnership may be proceeded against at the suit of any person or persons, or corporation, or association, or by and in behalf of the United States, and perpetually enjoined and restrained from doing or carrying on any interstate or foreign commerce whatever, either with the States or the Territories of the United States or the District of Columbia, or any foreign country; and no article of commerce produced, or manufactured, or owned and dealt in by any such corporation, association, joint-stock company, or partnership so organized, formed, managed, or carrying on business, shall be transported or carried without the State or Territory in which produced or manufactured, or in which same may be, or without the District of Columbia if produced, manufactured, or found therein, by any individual, corporation, or common carrier, in any manner whatever. All such articles of commerce, shipped in violation of the provisions of this Act, shall be forfeited to the United States, and may be seized by any marshal or deputy marshal of the United States, or by any person duly authorized by law to make such seizure, and when so seized shall be condemned by like proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law. The language in italics indicates the important changes proposed in our amendment to said section 9. As section 10, as proposed by the committee, when properly construed imposes no punishment except upon the common carriers, their officers, agents, etc., we provide for punishment of the monopoly, its officers, agents, etc., in section 9, which was omitted in that section as proposed by the committee. Our amendment to section 10 is as follows: Strike out the words "corporation association, joint stock" in line 23 and the first word "company" in line 24, page 7, and the same words in line 2, on page 8. These words, placed as they are, in section 10, are misleading, and their proper place is in section 9, as we propose. We also offer as amendments to be added in after section 10, on page 8, the following: First. A new section 11. Second. A new section 12. Fourth. A new section 14, as follows, to wit: SEC. 11. That every contract, combine, device, trust, or combination in the form of trust or otherwise, or conspiracy, tending to create a monopoly in the manufacture, production, sale, exchange, transportation, or dealing in any article of commerce or merchandise, entering into trade or commerce among the States or with foreign countries, or designed to create impedimenta to, or resulting in restrictions to, such trade or commerce or aids to commerce, or to limit or control the manufacture or production of such articles or merchandise, for the purpose of increasing or decreasing, or operating in such manner, or with such result, as to increase or decrease the price of such article or merchandise to the user or consumer, for the purpose of preventing competition in the manufacture, production, sale, exchange, transportation, or dealing in such articles or merchandise, or to give power to charge unreasonable prices for merchandise or articles produced or manufactured to be bought, sold, exchanged, dealt in, or transported in such trade or commerce, or for the purpose of imposing, or in such inanner as to impose, unjust or onerous restrictions upon, or impediments to, the lawful business of any person, company, or corporation engaged in the production or manufacture of such merchandise or articles, is hereby declared to be illegal and a monopoly within the meaning of this act, and every person who shall make, or enter into, or engage in, any such contract, combine, device, trust, or combination in the form of trust or otherwise, or conspiracy, or shall be a promoter thereof or officer or agent therein, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by a fine of not less than five hundred dollars and not exceeding five thousand dollars and by imprisonment not less than six months and not exceeding one year. SEC. 12. That whenever the President of the United States shall be satisfied that the price of any commodity or article of merchandise has been enhanced in consequence of any monopoly as defined in this act, he shall issue his proclamation suspending the collection of all customs duties or import taxes on like articles of merchandise or commodities brought from foreign countries. Such suspensions shall continue as long as such enhancement in price of such commodity or article of merchandise exists, and until revoked by the proclamation of the President. SEC. 13. That wherever any State or Territory shall, in any law against trusts, combines, combinations, or monopolies, provide that no foreign corporation, association, joint-stock company, or partnership, or stockholder, member, or officer belonging to or interested in any such trust, combine, monopoly, or combination of any kind, shall be permitted to carry on or do any business, or have any office or place of business, in such State, or shall make provision to regulate or suppress the business of any such corporation, association, or partnership, or prohibit the sale or offering for sale in such State of any article or merchandise produced by it, every such corporation, association, or partnership carrying on, or attempting to carry on, or do any business or have any office or place of business therein, and all its articles or merchandise carried thereto, shall be subject to the operation and effect of such law, to the same extent and in the same manner as though it had been incorporated, organized, or formed in such State and such articles or merchandise had been made and not brought therein; and no such law shall be regarded as in any way trenching upon the power of Congress to regulate commerce among the States or with foreign nations: Provided, however, That such articles or merchandise may be shipped and transported into any such State or Territory for the personal and private use of the consignee. SEC. 14. That every corporation, association, joint-stock company, or partnership in the United States, or any Territory thereof, or in the District of Columbia, whether organized or formed under and pursuant to the laws of the United States or of a State or of a Territory, owning or controlling any plant or business, or a majority of the stock in any plant or business, similar to its own, in any other State, Territory, or place outside of the one in which it was first chartered, organized, or formed, shall, before being permitted to ship, consign, take, carry, or transport, or sell or deliver for shipment, to any other State or Territory, or into or from the District of Columbia, or any foreign country, any article of commerce or merchandise of its own production or manufacture, or receive consignments or shipments of articles of commerce or merchandise, manufactured or produced in any other State or Territory, or in the District of Columbia, or any foreign country, file in the offite of the Secretary of State of the United States a certified copy of its articles of incorporation, association, or partnership, together with a duly verified statement showing the article or articles or merchandise manufactured, produced, or dealt in by it or intended to be manufactured, produced, or dealt in by it; a copy of its by-laws, rules, and regulations; the names and places of residence of its officers and stockholders; the amount of its capital stock and the amount thereof actually issued; the amount thereof actually paid in in cash; the nature and value of the property owned by it, and also a full statement of all its debts and liabilities; the number of its employees and wages paid; the dividends paid, if any; the amount of its surplus, if any; the character of additions and improvements made each year and the cost thereof, and a statement of its operating and other expenses, together with a balance sheet showing its profits and losses; and shall annually thereafter file in said office a report, verified by a majority of the directors of a corporation, or by a majority of the members of an association, joint-stock company, or partnership, showing the same facts as then existing, and shall, before shipping, or offering or attempting to ship, or sell or deliver for shipment, or put in the way for transit, to any other State or Territory, or the District of Columbia, or any foreign country, any article of commerce or merchandise manufactured, produced, or dealt in by it, plainly and conspicuously stamp thereon, when susceptible of being so stamped, and also on the outside of packages, boxes, or tanks containing the same, the name of the article or merchandise, and the name of the corporation, association, joint-stock company, or partnership manufacturing, producing, or dealing in the same, and the place from and to which it is to be shipped or transported. Every such corporation, association, or partnership as referred to in this section, and every officer, agent, or attorney thereof, that shall ship, or offer or attempt to ship, or sell or deliver for shipment, or put in the way of transit, to any other State or Territory, or to the District of Columbia, or to any foreign country, any article or merchandise dealt in, manufactured, or produced by it, or shall violate or fail to comply with any of the provisions of this section, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by a fine of not less than five hundred dollars and not exceeding five thousand dollars, and by imprisonment of not less than six months and not more than one year. In order to provide for this numbering of the proposed new sections above set forth, amend section 6 by adding after the word "thirteen the words "fourteen," "fifteen," " "sixteen," and "seventeen," and change the numbers of the sections 11, 12, and 13, as proposed by the committee, to 15, 16, and 17. Amend section 7 as proposed by the committee by inserting between the first words "that" and "this" in the first line of said section the following words, to wit: Nothing in this act shall be so construed as to apply to trade unions or other labor organizations, organized for the purpose of regulating wages, hours of labor, or other conditions under which labor is to be performed. The purpose of the new section 11 we propose is to apply the force and principle of the interstate-commerce clause of the Constitution to certain acts, facts, and conditions which the United States Supreme Court has held to be within the purview of said interstate-commerce clause, and which we think that Congress, in its power to regulate commerce, should declare against as hindrances to and interferences with such commerce. Where Congress, in its power to legislate upon a given subject, has adopted legislation declaratory of its judgment in the matter, the courts have always gone as far as they reasonably could to uphold such legislation. In the case of McCulloch v. State of Maryland, Chief Justice Marshall, delivering the opinion of the court, said:" We admit, as all must admit, that the powers of the Government are limited, and that its limits are not to be transcended. But we think the sound construction of the Constitution must allow to the National Legislature that discretion with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people. (4 Wheaton, 316.) See this case referred to on page 55, House Doc. No. 476, part 2, Report of the Industrial Commission. It is notorious that there are scores of giant combines and monopolies that are engaged in destroying competition and swallowing up their competitors, to the injury of trade and commerce among the States and to the great oppression of the people in all the States. Is Congress to sit idly by and proclaim its power is exhausted, and that it can do nothing further to aid the people who are struggling in the folds of these mighty combinations? Section 12, which we propose, relates to customs duties and imports over which the power of Congress does undoubtedly extend. Why not invoke that power in behalf of the people? Section 13, which we propose, is for the purpose of applying against the trusts the principle of the Wilson law against original packages. When the Wilson law came up in Congress in 1890 many of the smart set of lawyers, then holding seats here, made haste to give the opinion that such a law would be unconstitutional, but the United States Supreme Court upheld it all the same. (In re Rahrer, 140 U. S., 545; House Doc. No. 476, p. 61.) Section 14, as we propose, is for the purpose of securing publicity in the operations and business conduct of corporations owning or controlling business and plants, or the majority of the stock in any such, outside of the State or Territory in which their charters were first obtained. All such corporations are monopolistic and their business is carried on in such manner as to destroy competition, and that was the very object for which they bought up the plants of rivals in other States. Certainly Congress has some power to deal with these combines. The committee report says: The Supreme Court has decided that however much trusts, combinations, and conspiracies to monopolize manufacture and production affect and restrain commerce, such results are indirect and incidental, and that therefore the power to regulate commerce does not include power to regulate or repress such monopolies, combinations, and conspiracies. In reply to this we submit that a careful reading of the Supreme Court decisions on this subject will not sustain this statement of the committee in all its broadness and entirety. In the case of United States v. E. C. Knight Company (156 U. S.), to which, with Addyston Pipe and Steel Company case, the committee doubtless refers, the court say this: The fact that an article is manufactured for export to another State does not of itself make it an article of interstate commerce, and the intent of the manufacturer does not determine the time when the article or product passes from the control of the State and belongs to commerce. But further on in that same opinion the court say: It must be held that an article does not become a part of interstate commerce until it is started for another State. And to show a still further qualification to the language last quoted the court, in the Addyston pipe case, say: The commodity may not have commenced its journey and so may still be completely within the jurisdiction of the State for the purposes of State taxation, and yet at the same time the commodity may have been sold for delivery in another State. Any combination among the dealers in that kind of commodity which in its direct and immediate effect forecloses all competition and enhances the purchase price for which such commodity would otherwise be delivered at its destination in another State |