so often and so ably promulgated by Chief Justice White. The rule was reasserted in the American Tobacco Co. case and has not since been questioned by any member of the court.

It is true that in the important opinion rendered in the suit of the United States v. The Union Pacific Railroad Co., Justice Day says:

The act is intended to reach combinations and conspiracies which restrain freedom of action in interstate trade and commerce and unduly suppress or restrict the play of competition in the conduct thereof

Citing as authority the Joint Traffic Association case.

It is true also that the court quotes, with apparent approval, the following extract from Mr. Justice Harlan in the Northern Securities case:

In all the prior cases in this court the Anti-trust act has been considered as forbidding any combination which by its necessary operation destroys or restrains free competition among those engaged in interstate commerce; in other words, that to destroy or restrict free competition in interstate commerce was to restrain such commerce.

But thereafter the court says:

In the recent discussion of the history of the meaning of the act in the Standard Oil Co. and Tobacco Co. cases this court declared that the statute should be given a reasonable construction with a view to reaching those undue restraints of interstate trade which are intended to be prohibited and punished.

The fair conclusion is that it is now the settled doctrine of the Supreme Court that only undue or unreasonable restraints of trade are made unlawful by the Anti-trust act, and that in each instance it is for the court to determine whether the established restraint of trade is a due restraint or an undue restraint.

Whatever may be the opinion of the several members of the committee with respect to the soundness of the rule as now established, the committee as a whole accepts it as the present law of the land. It is profoundly convinced that, in view of the rule and its necessary effect upon the business of the country, the inherent rights of the people, and upon the execution of the statute it has become imperative to enact additional legislation.

The committee has full confidence in the integrity, intelligence, and patriotism of the Supreme Court of the United States, but it is unwilling to repose in that court, or any other court, the vast

and undefined power which it must exercise in the administration of the statute under the rule which it has promulgated. It substitutes the court in the place of Congress, for whenever the rule is invoked the court does not administer the law, but makes the law. If it continues in force, the Federal courts will, so far as restraint of trade is concerned, make a common law for the United States just as the English courts have made a common law for England.

The people of this country will not permit the courts to declare a policy for them with respect to this subject. If we do not promptly exercise our legislative power, the courts will suffer immeasurable injury in the loss of that respect and confidence so essential to their usefulness. It is inconceivable that in a country governed by a written Constitution and statute law the courts can be permitted to test each restraint of trade by the economic standard which the individual members of the court may happen to approve. If we do not speedily prescribe in so far as we can a legislative rule by which to measure the forms of contract and combination in restraint of trade with which we are familiar or which we can anticipate, we cease to be a government of law and become a government of men, and, moreover, of a very few men, and they appointed by the President.

It may be that the Supreme Court will be so enlightened and so alert that its opinion respecting what is due and what is undue restraint of trade will be in harmony with an awakened public conscience and a disinterested public judgment, but to fashion our conduct upon that hypothesis is to repudiate the fundamental principles of representative government.

When the commercial development of the country is considered, when the forms of industrial activity are taken into account, it must be admitted by every student of affairs that the policy of the government with respect to restraints of trade and commerce should remain a judicial question in those cases only in which Congress can not prescribe a definite rule.

In order to look at the subject in the light of illustration, it is suggested that there will presently come before the courts the combination centered in the United States Steel Corporation. In the end nine justices of the Supreme Court will be asked to say whether the restraint of trade brought about through this combination is a due or an undue restraint, and the answer which

each justice makes to that question will depend upon his individual opinion as an economist or sociologist, the conclusion of the court being in substance an act of legislation passed by the judicial branch of the government to fit a particular case.

Further, it is believed by many thoughtful people that a substantial identity in the managing boards of competing corporations constitutes a restraint of trade and is harmful to the public interest. If such a case were brought before the court, what would be the "rule of reason"? What guide would the court have in determining whether such community of directors or managers was a due or an undue restraint of trade?

Again, suppose there were a dozen establishments in a given field of production competing with each other and six of them were to consolidate, employing half of all the capital and advancing the consolidated enterprise to a dominating position in the trade, where would the judge go for light in determining whether the restraint of trade was due or undue? These illustrations might be indefinitely extended, but it would serve no useful purpose to multiply them.

The committee does not intend in this report to indicate the terms of the act or acts that should be passed to supply the court with such legislative tests and standards as will limit the scope of judicial discretion. To do so would be to report upon the bills now before it, and that the committee is not prepared to do. It is prepared, however, to say that Congress should, in as far as is possible, specifically prescribe certain conditions upon which persons and corporations shall be permitted to engage in commerce among the States and with foreign nations. These conditions should be of a character that will tend to preserve reasonable competition, or substantially competitive conditions, and to compel independence in both organization and conduct. They should be so clear that the business world can understand them and go confidently forward, guided by them.

Not only should such conditions be imposed upon those who are engaged or propose to engage in commerce among the States, but our legislation should further recite certain known form of combination and declare them to be unlawful because in restraint of trade. With respect to other forms, we should declare that if restraint is established the burden of proof is upon the persons or corporations involved to show that the restraint is reasonable.

These suggestions are not made solely for the better protection of that general body of our citizens, commonly called the people, who must deal with, buy from and sell to the combinations sought to be regulated, but are made also in the interest of safety and certainty for the men who compose what is ordinarily known as the business community.

There are many forms of combination, and many practices in business which have been so unequivocally condemned by the Supreme Court that as to them and their like the statute is so clear that no person can be in any doubt respecting what is lawful and what is unlawful; but as the statute is now construed there are many forms of organization, and many other practices that seriously interfere with competition, and are plainly opposed to the public welfare, concerning which it is impossible to predict with any certainty whether they will be held to be due or undue restraints of trade.

The committee does not conceal the difficulty of reaching an agreement concerning the details of the legislation just outlined, but it has no hesitation in reporting that legislation of the general character pointed out is both wise and necessary.

The committee further reports that if the additional legislation, the general scope of which has been pointed out, is enacted it will be very desirable to accompany such legislation with a measure establishing a commission for the better administration of the law and to aid in its enforcement. It may be fairly said that there is need of such a commission, even though the present statute is not supplemented in any manner; but it is apparent that if the new legislation is enacted the need of a commission will become more imperative.

There are three general fields in which the commission could work to the great advantage both of the people for whose protection the law exists and the people against whom it is directed.

First. If the Bureau of Corporations were converted into an independent commission composed of trained, skillful men, and clothed with adequate authority, there could be gathered more complete and accurate knowledge of the organization, management, and practices of the corporations and associations engaged in national and international commerce than we now have. In saying this the committee does not mean to disparage the work of the Bureau of Corporations as hitherto carried on, but, valuable

as the work has been, it is believed that a greater service could be rendered by a commission with a distinct organization with adequate appropriations and added authority. Moreover, it is clear that the constant inquiry into and investigation of interstate commerce in order to ascertain whether the law is being violated should be more closely connected with prosecutions for violations, when found to exist, than at the present time.

Second. When the conditions upon the fulfillment of which persons and corporations may engage in commerce among the States and with foreign nations are imposed, as the committee has heretofore recommended, there will be some of them upon which the government must act with administrative promptness rather than with judicial deliberation and delay. For instance, suppose Congress were to declare, as the committee thinks it ought to declare, that no corporation should be permitted to engage in interstate or international commerce unless it be honestly capitalized, and that when anything but money is accepted for its stock that the value at which the property is so taken must be its fair, reasonable value. It seems clear that a corporation proposing to enter business should have an opportunity to come to some governmental tribunal and say, here is the property purposed to be taken for stock, and here is the price at which it is to be taken, and thereupon ask for approval or disapproval of the proposition. It would be most unjust in such a case to allow the corporation to go on for years and then be told that it must cease to do business because the value of the property was less than the par value of the stock issued for it.

And, again, suppose that 10 out of 20 manufacturing establishments heretofore in competition with each other desire to consolidate into one enterprise. There ought to be a way in which the men in such a venture could submit their plan to the government and an inquiry made as to the legality of such a transaction, and if the government was of the opinion that competitive conditions would not be substantially impaired there should be an approval, and in so far as the lawfulness of the exact thing proposed is concerned there should be a decision, and if favorable to the proposal there should be an end of that particular controversy for all time. Such results as these can be attained in no other way than through a commission which, though administrative in its character, would, in some instances, exercise quasi judicial func