freight rates, when they come to be made, are largely influenced by the condition and amount of the securities outstanding against such common carrier engaged in interstate commerce; and, therefore, it is proposed by this law to provide that no common carrier doing an interstate business shall issue securities in such volumes as to burden commerce and cripple the railroads. The bill proposes to secure enforcement of the law by inflicting criminal penalties upon the responsible heads of the railroad companies. It is my deliberate judgment that when the president, vice president, secretary, treasurer, or the executive head of any common carrier understands definitely that a fine of $1,000 to $5,000, or a prison sentence of a year, must be the result of violating this statute, there will be no violations of it.

This bill goes far to purify one of the most prolific sources of industrial, financial, and transportation evils of the times, in prohibiting interlocking directorates after two years from its enactment, in any common carriers except in those instances where upon full showing the commission may approve. It is greatly to be doubted if any single cause has contributed more to business corruption than the modern corporate business procedure of interlocking directorates. It is shown by a recent congressional report that in a given instance one man in a great rity of our country was a director at one time in 67 great companies, at least one-half of them being railroad companies and one of them being the greatest industrial enterprise in the Nation, which sold its products to those same railroads, and at the same time he was fiscal agent for the railroad companiesthus he was fiscal agent, buyer, and seller at one and the same time. Of course, efficiency in enterprise can not be secured by such methods. But this bill does not deny absolutely the right of one man to serve as director in more than one railroad company, and it is wise in that provision, because there are instances in which it is entirely just to the railroad in the discharge of its duty to the public, and just to the public also, that one man may serve as director of more than one common carrier. I have in mind at the moment two railway systems entering and running through my own great State of Texas-the Missouri, Kansas & Texas Railway and the Southern Pacific Railway. The first-named runs through the States of Missouri, Kansas, Oklahoma, and Texas, and yet it is required by the laws of those several States to have a charter for the portion thereof within such States. In that case manifestly it is only proper for the Interstate Commerce Commission, upon a full showing, to permit the same persons to act as directors of each of those corporations making up the entire line. And so with the Southern Pacific, which traverses the State of Louisiana under one charter name, and the State of Texas under another. But it is manifestly against the interest of the public, as well as of the stockholders and the common carriers, to permit one man to be a stockholder in two competing common carriers; and it is the object of this bill to prevent such procedure.

This law is not intended to cripple and impair, but rather to safeguard and serve, the interests of the common carriers themselves, as well as to protect the public against the effects of their improper management. Furthermore, when this bill shall be in full and successful operation, it will make American rail

way securities absolutely stable in value and desirable as permanent investments throughout this country and the balance of the world. And while it is not the object of this law to create or to maintain commercial values for such securities, it will be wise, constructive legislation if it have such indirect effect, because it will enable the common carriers of the present time and those to be constructed in future to summon from all quarters a vast amount of funds for investment in such securities; and so this bill will make for the security and the permanent prosperity of the common carriers and the welfare and happiness of the American people.

It is truly a noble privilege to serve here while this mighty work is being done. As a people we have passed through the formative period of our Nation's growth and development. Our forefathers established wisely and well the foundation of our national institutions by a constitution of political principles that is the admiration of the world and has been the guaranty of the people's freedom and prosperity. Under it we have lived and grown, in a little more than a century, from 3,000,000 people to 100.000.000 people. Our aggregate wealth as a Nation is about $140,600,000,000. We have developed the most amazing civilization and industrial greatness of all the ages. Conditions of life are better in the United States than in any other country. There is no cloud remaining upon the national horizon except the selfish aggressions of great aggregations of wealth upon the industrial freedom of the people; and that cloud will disappear in the light of the morning of the new day of equality of industrial opportunity before the law of all the people by the enactment of this legislation. The Democratic Party invites all patriotic members of all parties to join it in this mighty work; and we know that the hopes and prayers of a great majority of the people urge us to finish this work and thus earn their gratitude and the blessing of all the generations to follow. It is a grand thing to do a plain duty, and a severe test of character to perform that duty resolutely when the weighty pressure of mighty forces is operating against us as it is at present. But to my mind nothing is so noble as a sincere heart and enlightened mind, a clear conscience, a lofty patriotism, and a resolution unbending to do right. No permanent good can come to any State or nation, even as no permanent good can come to any individual, except upon the secure basis of absolute justice; but just as with individuals, so also with States and nations, prosperity and good-fellowship follow in the wake of wisdom and of plain duty resolutely performed. Let us preserve, as we are doing, that which is best and noblest in our Constitution and laws, our institutions and civilization, our business fabric and national customs, as a heritage for our children; but let us also, under the providence of God, by an enlightened statesmanship in the enactment of these wholesome laws, assure and secure to posterity the priceless legacy of industrial freedom and economic independence.

ON ADOPTION OF CONFERENCE REPORT ON THE CLAYTON ANTITRUST BILL

SPEECH

OF

HON. J. C. FLOYD

OF ARKANSAS

IN THE

HOUSE OF REPRESENTATIVES

OCTOBER 8, 1914

WASHINGTON
1914

SPEECH

OF

HON. J. C. FLOYD,

OF ARKANSAS.

ANTITRUST LEGISLATION.

The SPEAKER. The gentleman from Arkansas [Mr. FLOYD] is recognized for 40 minutes.

Mr. FLOYD of Arkansas. Mr. Speaker, as one of the conferees on the part of the House, I desire to explain this conference report, the changes made therein, and the reasons leading up to those changes, and incidentally to answer some of the criticisms that have been spread broadcast over the country with regard to the action of the conferees and in regard to the report. I desire to read one of those criticisms, which was published in the Washington Post the morning after the conference report was approved by the Senate-a news item in that paper— and I read it because it is but a reflection of criticisms that have been sent broadcast all over the country. It is as follows:

REWRITE ITS DEFINITIONS,

As the bill passed the Senate it fairly bristled with penalties. The conference report, with rare exceptions, changed provisions for fines and jail sentences to declarations that the acts described "shall be unlawful." Besides taking the "teeth" from the measure in this direct manner, the conferees rewrote most of the definitions of illegal acts, broadening them and adding exceptions to such extent that the former precise and definitive sections have become diffuse and susceptible of interpretation only by a court.

Now, in view of that criticism of the action of the conferees, in justice to the conferees I think it but fair to state the facts as to the condition of the bill as it came from the Senate and reached the conferees. In conference only one criminal penalty was eliminated, and that was in section 2, which was inserted by the Senate. The section went out in conference and the penalty with it. That section related to patented articles only. It corresponded and was substituted for section 4 in the House bill after that section had been stricken out by the Senate. We insisted upon the restoration of section 4 of the House bill, which applied not only to patented but unpatented articles, and that section finally was restored as section 3 in the conference report, but without a penalty. The bill as it passed the House contained six sections that provided criminal penalties, namely, sections 2, 3, 4, 8, 9, and 12, the last section being commonly referred to as the personal-guilt clause of our bill. Sections 2, 3, and 4 of the House bill were stricken out entirely in the Senate, and by reference to section 9 of the House bill it will be seen that the paragraph relating to interlocking directorates of banks was stricken out by the Senate. In that condition the bill went to conference. The work of the conferees was therefore not a work of elimination, but a work of restoration. As conferees