SPEECH

OF

HON. M. CLYDE KELLY,

OF PENNSYLVANIA.

The House in Committee of the Whole House on the state of the Union had under consideration the bill (H. R. 15657) to supplement existing laws against unlawful restraints and monopolies, and for other purposes. Mr. KELLY of Pennsylvania. Mr. Chairman, the gentleman from Illinois [Mr. MADDEN] has just stated that the demand for antitrust legislation at this time comes from disgruntled agitators. He completely mistakes the temper and the will of the American people. The trusts and monopolies of this country are themselves responsible for the demand for remedial action, and their disregard of justice and every fundamental principle of this Republic has made the solution indispensable. Enterprises with great capital have deliberately sought not only industrial domination but political supremacy as well. They have entered the realm of government with insolent bearing and have attempted to name officials from the highest to the lowest.

Organized money, rioting ruthlessly in savage impulses, has forced this question upon us. We must decide whether wealth is to rule or manhood, whether this Nation is to be one of equal rights to all or special privileges to a few, whether honor and ability is to weigh in the selection of officials or cringing submission to corporate capital.

The conscience of the American people demands that action be taken, and any delay now will be a betrayal of their will. Great combinations of capital for many years have flaunted their power in the face of the citizenship, they have forced their corrupt way into politics and government, they have dictated the making of laws or scorned the laws they did not like, they have prevented the free and just administration of law. In doing this they have become a menace to free institutions, and must be dealt with in patriotic spirit, without fear or favor.

It is a common practice for standpatters to decry every forward step by denunciation of agitators. It would be well to pay some little attention to the fawning followers of crooked big business in the press, on the platform, and in public office. They sell themselves for price and place, and it would be well if they were dissected and their treason examined, while men are cataloguing the enemies of the Nation.

Mr. Chairman, I am in complete accord with the purpose and aim of this legislation, but I fear that its terms are such that if enacted into law it will only add more jests to the long list which has marked the antitrust legislation of America in the past. Trusts have been ordered dissolved in the past, and the only change effected was one in the methods of bookkeeping. It is time for straightforward action and an honest effort to protect the people from the powers that prey upon them.

GROWTH OF TRUST DOMINATION.

For 35 years combinations of capital have sought to form monopolies and profit from the communities through the private taxing power which goes with the ability to control prices. In 1879 the Standard Alliance, composed of oil refiners, led the way, through a pooling system, and in a short time controlled 95 per cent of the refining business of the country. The Western Exporters' Association, made up of whisky distillers, followed, and it soon was in absolute control of the business. Others followed in the same path, and this pooling system flourished for a time.

But it did not give the complete control desired. It did not concern itself with the management of individual plants, but simply apportioned out the pro rata share of production. Each member of the pool could withdraw without notice, and thus the agreement had no stability. In their anxiety for quick and large profits the producers broke the market by their very greediness. The Whisky Trust and the Wire-Nail Trust Association went so far as to raise prices 200 per cent in the midst of falling prices. Jealousy caused trouble also, and the Lackawanna Iron & Steel Co. once broke the steel-rail pool because it was allowed only 17 per cent of the production.

Such defects in the control of prices stirred the producers to find other schemes to secure their aim, that of throttling the public and forcing the highest possible prices for products.

The next plan was the trust agreement, through which trustees were assigned the majority stock in constituent refineries. They controlled the boards of directors and collected all dividends on stock and distributed them to the holders of trust certificates. It was a better plan than the pool, for the pool was an outlaw in the courts, while in the trust agreement the trustees had the law on their side and could enforce their contracts. The injustices which followed such control of prices, however, stirred lawmaking bodies to action. In 1890 many State legislatures passed antitrust laws, and in the same year the Sherman antitrust law was enacted into law for the purpose of dealing with combinations doing an interstate business.

So another plan was necessary, and legal sharps were set to work to discover some juggling trick which would enable great combinations to wring millions from helpless consumers. While they sought for this ideal plan, the producers, having tasted the sweets of despotic control, carried on their nefarious plans through a system known as community of interest." By the knowledge gained through close association, officials of different companies were able to act together and to prevent competition, even without any formal agreement.

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This plan was still weak, for disagreements and misunderstandings meant a return to competition at any time, and that was what the different companies were striving to prevent.

Then came the discovery of the ideal scheme-the "holding corporation." It provided for a corporation to own the stock of competing companies, and it was proved in a short time to be a method in which to legally violate both law and justice. It excelled other plans, because it was not necessary to purchase the companies outright. Buying up a majority of the stock of the companies served every purpose. It escaped the troubles of the trust agreement, which was declared illegal because it was a

conspiracy of several individuals, and this plan meant having one person, in the form of a corporation, control all the individual companies.

The Sugar Trust was the first to put this plan into operation, but others followed thick and fast. In 1897 there were 63 "holding companies" in existence, and in 1898-99 there were formed 183 such companies, with a capitalization of $4,000,000,000, representing one-twentieth of the entire wealth of the country and twice the amount of money in circulation.

From that time trusts have flourished, until to-day a trust controls almost every commodity of daily life. This has been done in spite of all efforts to prevent restraint of trade. Suits have been entered against these vast combinations, but in most instances they have failed, and the victory won in the others was but a shadow victory. The decisions of the Supreme Court have involved legal somersaults and twistings and turnings, but the old issue still remains. It is to-day a muddle of 24 years' stirring, and the time for clearing is certainly here.

In clearing that muddle straightforward measures are necessary. It is not necessary to specifically describe every unfair trade practice, but it is necessary that some tribunal have the power to deal with every unfair trade practice which leads to monopoly. This measure mentions a few-and only a few-of these practices; and, even if they could be thus rooted out, others are sure to take their place, to remedy which other legislation will be needed.

Such an interstate trade commission as that proposed in the Progressive bill before this body would prevent confusion, delay, and injustice. It would prevent the evils mentioned in this measure, price discriminations, "tying" contracts, and so forth, and would be empowered to deal with every evasion as it might arise. Time will prove that only through a tribunal with proper powers can these unfair practices be prevented.

EXEMPTION OF LABOR UNIONS.

Section 7 of this measure, with the change necessary to clearly prevent application of antitrust laws to fraternal, labor, and other voluntary organizations, is a great step in advance. The section reads:

That nothing contained in the antitrust laws shall be construed to forbid the existence and operation of fraternal, labor, consumers, agricultural, or horticultural organizations, orders, or associations instituted for the purpose of mutual help and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations, orders, or associations from carrying out the legiti mate objects thereof.

This section, properly amended, will help to write the gospel of humanity into law. It is a recognition of the fundamental difference between human labor and the products of labor. Legislation dealing with trusts which control the products of labor can not be justly applied to the association of workers for their own betterment and improvement. One deals with materials, the other with men; one with mines, the other with miners; one with machines, the other with machinists; one with farms, the other with farmers; one with buildings, the other with builders; one with factories, the other with factory workers; one with tools, the other with toilers; one with property, the other with persons. You can not classify them together, for they are essentially different.

The free workers of America own themselves and their labor power. They may sell their labor power to others or they may withhold it. They may act together for the protection of their rights and interests, and it is a sham and a fraud to say that they may organize without the power to use means necessary to make organization a vital force in demanding and securing justice.

I stand for the right of labor to organize for its own advancement and to work for that purpose without being outlawed for it. This measure is right in purpose, and I hope it will be amended so that there shall be no shadow of doubt as to the right of the workers of this country to organize and exert themselves in legitimate activities without the danger of being prosecuted under antitrust laws. It is not a case of class legislation nor a demand for special privileges. It is simply a demand of humanity for freedom from restrictions and shackles that deny common justice.

The Sherman antitrust law has been made a potent force against organized labor, even while it proved unable to restrain marauding combinations of capital. In 1892 it was brought into action when some union men in New Orleans went on strike. Teamsters and workmen in many lines were concerned. Judge Billings, of the United States district court, declared that the strike was in restraint of interstate commerce and granted an injunction. The United States court of appeals agreed in his decision.

Two years later the point was again reached in the Pullman strike in Chicago. Injunctions against the strikers were granted by the courts under the Sherman Act and a number of the strikers were jailed for several months for disobeying the injunction.

Several years later another labor phase came into evidence. In Danbury, Conn., a small firm of hat manufacturers operated an open shop and was boycotted by labor unions. The court decided that the unions were acting as a combination in restraint of trade under the meaning of the Sherman antitrust law.

Many other instances might be cited to show that the antitrust laws have been used as a club over voluntary organizations, which were never intended to come within their scope. When the Sherman antitrust law was passed in the Senate it was clearly and unequivocally stated that its provisions would not cover such organizations. But history shows that the victories won under it have been the suits against labor organizations, while great trusts and monopolies have grown and flourished. It is to remedy such a flagrant injustice that this provision is included in this measure; and after it is amended, to clearly accomplish its purpose of exemption, it should have the support of every Member of this House.

INJUNCTIONS AND JURY TRIAL.

The provisions in this measure for the regulation of injunctions and the procedure in contempt cases, while somewhat beyond the scope of antitrust legislation, are reforms long demanded by the American people. The expression "government by injunction" has become current because in almost every labor controversy in recent years the courts have been used by powerful corporations in the carrying out of their plans to sub

jugate employees and to prevent the exercise of lawful rights. The abuse of the right of injunction in the past 10 years has been sufficient to arouse the public, and this legislation is demanded by every right-thinking American citizen to-day.

Similar to that demand is the determination that the constitutional provision that "no person shall be deprived of life, liberty, or property without due process of law and the judgment of his peers" shall be maintained. Freemen since the days of King John and Runnymede have demanded jury trial. It is a fundamental American doctrine. If jurors are competent to judge, the law and the fact in criminal cases, why are they not competent in matters of injunction and contempt? The judge is not more competent to judge of a litigant's rights when his life is not at stake than when it is, and the individual or corporation that is afraid to submit his case to a jury for trial has no right to dictate laws for the administration of justice.

THE INVISIBLE GOVERNMENT.

Mr. Chairman, the invisible government which has controlled the visible Government in this Nation for many years has been unscrupulous big business. We have been tracing some of its insidious slimy ways in our lobby investigations of recent date. We have seen its arts of trickery and debauchery, its manipulations, and its conspiracies. The time for forbearance is over and the time to strike has come. If this Nation is to be a government of the people by crooked big business, the doom of our free institutions is assured. I believe that firm and decisive action now will be for the best interest not only of the Nation at large but of business itself. Brazen defiance of the spirit of laws made to protect the public and cunning jugglery to evade them is in the final analysis the worst thing possible for business. Business protects itself against fires by vast expenditures for fire insurance, but there are other dangers worse than fires. One is the danger that the masses of the people will forget their patient endurance of injustice and longsuffering submission to wrong on the part of exploiting combinations and start a conflagration against which fire insurance will offer no protection.

Good business depends on the permanence of law and order, This Nation can not stand much more of fraud and plunder, savage impulses left unchecked, a controlled press, and misrepresentation of the truth and continue to have good business.

The real defenders of property to-day are not those who attempt to forestall every attempt at reform by denunciation and who put the blame for unrest not on those who pummel the people but on those who call attention to the black and blue spots. The real defenders of property are not the standpatters, who cry out against any change and shout "Let well enough alone," when the very worst thing that could happen would be to have things remain exactly as they are, no better and no worse.

No; the real defenders of property are the upholders of the rights of humanity, the Progressives, who believe that "New Occasions teach new duties. Time makes ancient good uncouth. They must upward still and onward who would keep abreast of

truth."