SPEECH

OF

HON. JOHN M. NELSON,

OF WISCONSIN.

The House in Committee of the Whole House on the state of the Union had under consideration the bill (II. R. 15657) to supplement existing laws against unlawful restraints and monopolies, and for other pur

poses.

Mr, NELSON. Mr. Chairman, with other minority Members, I shall support the first part of the present so-called antitrust program, the creation of an interstate trade commission. I do so with pleasure, because in its preparation the minority was granted recognition. It is a definite legislative measure, and, on the whole, this commission, with additional powers, may prove a beneficial agency for the final solution of the trust evil. It is with a deep sense of disappointment that, for the same reasons reversed, I can not give my support to the bill now before us. It comes from the committee of which I have the honor of being a member. I have the highest personal esteem for the gentlemen of the subcommittee who framed the bill. These gentlemen, but for a powerful restraining hand, have the ability and, I believe, the patriotic desire to construct a far better law; and I had hoped that we all could prepare and support a measure that would reflect credit upon the committee and redound greatly to the welfare of the country. Mr. SLOAN. Will the gentleman yield?

Mr. SLOAN. What restraining hand does the gentleman refer to? Is not this House free to do what it sees fit, and may not its Members exercise their own privileges and prerogatives?

Mr. NELSON. The gentleman has evidently not been reading the newspapers.

Mr. SLOAN. I recognize in the gentleman a greater authority, and I appeal to him.

Mr. NELSON. The gentleman must know from the discussion to-day that a subcommittee was appointed, consisting of three very able Democrats. No Republican was given any recognition on that subcommittee; and if we may rely on the newspapers they were constantly in consultation with the President on all the details of the bill, and they are carrying out his instructions.

Much as I wish to act with my colleagues on the committee, I must truthfully state my views of this bill. It was conceived in the spirit of partisanship and molded in every detail by the motive of political expediency. It is not constructive legisla tion upon broad principles but by arbitrary selection, nor by positive and certain enactments but by vague and undefined exceptions, and does not bravely grapple with the giant evil of

monopoly itself, but turns to its manifestations and unrelated side issues. Finally, it is doubtful whether the harm that will result from this bill will not outweigh the small amount of good some of its provisions might accomplish.

It will be a matter of extreme regret, I feel certain, to every American citizen, irrespective of politics, who takes a large and patriotic view of this whole subject that the party intrusted with power has failed so completely to measure up to the great opportunity and the sacred duty of the hour. Instead of devoting itself to the sincere solution of the problem of our day and generation, it has weakly yielded to the spirit of political expediency and truckling compromise, by way of inaction if not reaction. Before the last election the party pointed to the pathway of duty. It bravely asserted that "a private monopoly is indefensible and intolerable," and this was its platform pledge:

We favor the vigorous enforcement of the criminal as well as the civil law against trusts and trust officials, and demand the enactment of such additional legislation as may be necessary to make it impossible for a private monopoly to exist in the United States.

There was a ring of genuine truth in that proclamation, and there was patriotism in that pledge, and it appealed to the American people. Private monopoly is intolerable, and competition must be restored as the working basis of our national life. Competition offers, in my opinion, the best environment for the advancement and the welfare of mankind in the individual initiative, the individual independence, and the individual responsibility.

We should now have the courage and foresight of statesmanship. We may yet be master of our country's future; but if we trifle, halt, or compromise too long competition, now greatly endangered, may never be restored, and then what-socialism?

No nation is so great that it can safely overlook the law of consequence. None are so blind as they who will not see. There are those who look upon socialism as a menacing evil, but what are the signs of the times? Is there no significance in the rapid progress that socialism is making both in the United States and abroad? Socialists sit in the cabinets of Italy, France, and Norway, and they are the strongest political party in Germany. In the United States Socialist gains have kept pace with the increase in the number and power of the trusts. For President of the United States in 1912, 1,000,000 American citizens voted for a radical Socialist. We can not safely ignore the principle of cause and effect. As surely and rapidly as the properties of all the people pass into the hands of a few trust magnates, public sentiment, rapidly forming, when once fully aroused, will multiply the socialistic vote as a protest against monopoly privilege. And the day when the people must choose between public ownership of trusts for the benefit of all and the private ownership of the trusts for the privilege of the few, will witness the final triumph of socialism in this country. Therefore we should act in our days of grace, while we are yet masters of our national destiny; but will this compromise measure before us now, this mere marking time, remove the cause, the special monopoly privilege of levying tribute manifested in the high cost of living, and thus prevent the much-dreaded social change in the conditions of our national life?

REGULATED MONOPOLY.

Some well-meaning theorists imagine they see a place of escape, a permanent middle ground, in a state of regulated monopoly. But they are merely deceiving themselves. They say that the trusts are more efficient and can produce more cheaply. They urge that the dangers of oppression may be removed by regulation and that the principle of concentration in industry under regulated monopoly will result in benefit to all the people. But these fond hopes and fancies are fallacious.

TRUSTS NOT EFFICIENT.

The trusts have not been efficient. The source of their success has been the unfair tactics employed against the independents and the monopoly privileges they have enjoyed. No trusts show cheaper cost of production than do the smaller independent plants. The explanation lies near at hand. When a concern grows so large that the men at the head can not possibly be familiar with every angle of the business, gross inefficiency results. The element of personal management so essential to business success disappears. In the interest, therefore, merely of cheaper production, it is desirable that the trusts should be destroyed.

PRICE FIXING.

Nor is regulation of monopolized industry practicable. In the pathway toward regulated monopoly there are many immovable rocks. The foremost is price fixing. With the specter of the cost of living before us we can not permit monopolies to charge prices at will. But in fixing prices the Government must do justice to all interests alike. It must take into consideration the values of these great properties, the rights of the owners, the needs of the consumers, the returns to the farmer for his raw materials, the wages of the laborer in the mills, and many other important matters. The problem is, as may be seen at a glance, a stupendous impossibility. Fixing prices calls for commissions. How many; 1 or 800? Able men who have given this point special study say that. there would have to be a separate commission, at least, for each line of business. What a mire of bureaucratic government we would run into! Think of the arbitrary power of such commissions!

CORRUPTION.

Then, too, there are other accompanying evils. Big business to protect profits will go into polities; a small increase in prices will mean millions of extra profits; and in consequence we would always have present the grave danger of political and official corruption.

BUSINESS STAGNATION,

Regulated monopoly is likely to mean not only bad government, but business stagnation. When commissions allow monopolies regular fixed profits, whether they be 6 per cent or 10 per cent, the keen incentive for making improvements in the processes of manufacture will disappear. Efficient or not, they will earn the same regular dividends.

PUBLIC OWNERSHIP,

The final consideration in regulating monopoly is that it will inevitably lead to socialism. Under regulation, if prices are high, candidates and parties will bid for votes on the plea of reducing the cost of living. Regulation may then lead to confis

cation, and socialism is at hand. On the other hand, if prices are not reduced, there will be the increasing demand for public ownership. To compromise with monopoly is to end in socialism.

THE TEST OF LEGISLATION.

Difficult as the problem of restoring competition may seem, it presents no such insurmountable obstacles as lie in the pathway of regulated monopoly. As a Nation, with the Sherman law unrepealed, we are committed to competition. This bill, or any trust bill, must be measured by the standard of its efficiency to restore competition. There can be no satisfactory compromise. Monopoly in every form must be made impossible. Any measure which falls short of this is but a makeshift and not a thoroughgoing solution of this great evil.

THE CHANGE IN PROGRAM.

The President of the United States, a profound student of history, before his election saw plainly the duty of the hour, and I even now believe that he really desired to assail this evil with all the power of his great office, but after the tariff bill had been passed it became evident that the cost of living had not come down and that business was rapidly approaching a standstill. There were signs of panic in the air, and if not in the country there was a real panic among Democrats in Congress. There was a lively fear of a possible overturning of the political equilibrium. Thinking that readjustment of our currency system would restore public confidence, the party in power rushed through Congress its money bill, and still there was business paralysis.

It was evident to a close observer of current events that the party in power would not have the courage to grapple with the trust problem in dead earnest, but what was it to do? It had to steer between Scylla and Charybdis, betrayal of public confidence in deserting its trust program or so disturbing the big business interests that a panic might be precipitated in all its dreadful reality. Then it was that political expediency caused a sudden change in party program.

A PREDICTION.

Six months ago in magazine articles I pointed out just what would take place, and the expected has come to pass. Among other things this was said:

In this situation the easiest road is that of compromise to pass some half-way measures and then try to make the people believe that the country has been relieved from the thraldom of the trusts. There is much talk of going slow. It is proposed to pass a few bills, such as making the penalties of the Sherman law personal and abolishing interlocking directorates, so as to make a showing of reform, but not seriously disturb Wall Street. It behooves the people to watch closely coming events. This is a time when words count for less than results. At the same time the hope and sincere wish was expressed that the President would play the part of David and slay the Goliath of private monopoly.

ASSURING BIG BUSINESS.

But the President, yielding to the pressure of political expediency, in his trust address to Congress sounded the keynote of compromise when he told big business in honeyed words that "the antagonism between business and Government is over," that in its place "an atmosphere of accommodation and mutual understanding" has been ushered in. Vice President Marshall

said, "What we need is much agitation and little legislation." Senator Hoke SMITH said, "Readjustments can be made peacably and litigation will not be required." And Chairman CLAYTON assured big business interests that "nothing radical" would be done.

THE SUBCOMMITTEE.

To make certain of this, as chairman of the Committee on the Judiciary he appointed two Democratic members to act with himself as a subcommittee in the preparation of a trust program. This partisan subcommittee, in frequent consultation with the President, prepared three tentative bills. It was quite evident that Chairman CLAYTON'S promise was made good. These bills did not alarm the trusts; they did disturb small business men.

SUGGESTIONS OFFERED.

Extensive hearings were granted upon these tentative bills. Representatives of small business associations appeared to protest against the arbitrary manner in which their methods of doing business were intereferred with. Thoughtful students of the trust problem-men like Louis D. Brandeis, Samuel Untermeyer, and Albert H. Walker and others-showed clearly that these bills would not be effective in restoring competition. Numerous excellent suggestions were offered to make them really effective means for destroying private monopoly.

PARTISANSHIP.

When hearings were concluded this partisan subcommittee presented a consolidated bill. It did not avail itself of the many helpful suggestions that had been made, dropped out the teeth in the definitions bill, and added some new provisions dealing with holding companies, farmer and labor organizations, and the use of injunctions in labor disputes. No Republican had any part whatever in the preparation of the bill. The partisan subcommittee worked behind closed doors. Not a change was made without its consent. The full committee reported the bill to the House by a strictly partisan majority. So evident, in fact, was the partisanship that no member of the minority cared to take any part in the final vote. From beginning to end, it may be said with perfect accuracy, this bill was conceived in a spirit of partisanship and molded in every detail by the motive of political expediency. [Applause on the Republican side.]

COMPROMISE.

The compromise character of this measure is apparent in every provision. It is a tight-rope performance with the fears of Wall Street balanced against the demands of the people. Hence its vagueness, its exceptions, and its side issues. Its various sections resemble certain signs which as you read them from the front say one thing, but when you read them from the side or the rear say something wholly different.

In the minority views I presented as a member of the Committee on the Judiciary, a detailed analysis of this bill was made; here I shall point out only generally how it carries water on both shoulders in the effort to please plutocracy and at the same time placate the public.

TEETH IN SHERMAN LAW.

The first part deals with two unfair methods of competition— discrimination in price and the making of exclusive contracts.