because here is a hat of a similar quality with a union label in it." Do you consider that a commendable motive to destroy Mr. Loewe in order that they may attack the Yonkers people?

Or, take the case of the Buck Stove and Range Company. That company had agreements-that fact was admitted-with the metal polishers' union and with the molders' union that all disputes should be submitted to arbitration. The particular dispute in question was submitted to arbitration and the award and decision were against the union. Nevertheless, the union officers in St. Louis, throwing overboard their agreements, began this business of applying the boycott. They applied it through the labor unions of St. Louis. They then applied to the International Union of Polishers, with the result that all labor unions in the United States, through the machinery of the American Federation of Labor, are being brought to bear to destroy the interstate trade of the Buck Stove and Range Company, when the men out there were entirely in the wrong, as is established by the finding of Justice Gould.

So I say that your hypothesis that it is inconceivable that men would resort to these things from wrong motives, or, to put it in other words, from misguided motives, is an incorrect assumption. The fact is, it is because these things are done that the law was passed, and it is because they have been done that the courts have denounced them and applied the law to them.

The implication is that these people ought to be permitted to do these things by express terms of law because it is inconceivable that they would do these things. That is a mistaken assumption.

Senator NELSON. It is now five minutes of 12, and we shall have to quit for the day. I wish to see if we can make an arrangement about time for another hearing. You want to be heard further on this, I presume, Mr. Low?

Mr. Low. I myself have almost finished, but I think there are others who desire to speak.

Semator NELSON. Are there others who would like to be heard on the same side?

Mr. Low. I think Professor Jenks would like to be heard.

Senator CLARKE. The session of Congress is approaching a close, and we ought to meet shortly.

Senator NELSON. Can you meet next Tuesday?

Senator CLARKE. Why not take it up on Saturday- but perhaps there will be a session of the Senate on Saturday.

Mr. EMERY. We have a hearing before the House Judiciary Committee on the Hepburn bill on Saturday.

Mr. Low. Could we meet to-morrow?

Senator DILLINGHAM. I have another committee for to-morrow, at which I preside, that has important bills before it.

Senator NELSON. And on Monday we have a meeting of the full Judiciary Committee, so that this subcommittee could not meet then, but on Tuesday it could.

Senator DILLINGHAM. I can be here on Tuesday morning.
Senator CLARKE. So can I.

Senator NELSON. Let us meet, then, on Tuesday, sharp at 10 o'clock. The trouble with us is that we are all members of other committees. I am myself a member of four working committees,

and the other members of this subcommittee are in the same situation. Then we have to attend the sessions of the Senate, so that we have only the forenoons at our disposal. We will adjourn, then, until Tuesday next.

Mr. Low. Would it be convenient for Mr. Davenport and Mr. Emery to go on at that time?

Mr. DAVENPORT. Yes.

Mr. Low. I believe it will be inconvenient for Professor Jenks to be here before the end of the week.

Senator NELSON. Let us all be here promptly at 10 o'clock on Tuesday. I should be glad to call a meeting for an earlier day if I could.

Mr. DAVENPORT. I should like to have an hour or so to point out the objections we have to this bill and the Foraker bill, because there is the same vice in both.

Senator NELSON. I shall be glad to hear you on the Foraker bill. Senator CLARKE. Whom do you represent?

Mr. DAVENPORT. The American Anti-Boycott Association. Senator CLARKE. Composed of railroad companies and manufacturers' associations?

Mr. DAVENPORT. Composed of employers.

Senator CLARKE. Railroad companies and manufacturers?

Mr. DAVENPORT. Manufacturers and employers. Railroad companies do not have anything to do with us.

Mr. NATHAN BIJUR. I should like to be allowed to furnish a brief in lieu of a personal hearing, as I can not be Senator NELSON. That will be sufficient.

printed in the proceedings.

here.

We will have
We will have your brief

(The subcommittee thereupon adjourned until Tuesday next, April 28, at 10 o'clock a. m.)

WASHINGTON, D. C., Tuesday, April 28, 1908. The subcommittee met, pursuant to adjournment, at 10 a. m. Present: Senators Nelson (chairman), Depew, Dillingham, and Clarke.

Senator NELSON. We will now proceed with the hearings on the bills before the subcommittee.

STATEMENT OF JOSEPH NIMMO, JR., STATISTICIAN AND ECONOMIST, OF WASHINGTON, D. C.

Mr. NIMMO. Mr. Chairman and gentlemen, the antitrust act of July 2, 1890, is one of the most unfortunate legislative misadventures ever placed upon the statute books of the United States. I will enumerate some of its errors:

First. It was assumed at the time when it appeared as a bill in Congress that it applied only to commercial and industrial combinations and mainly to department stores and combined industries. It never had that effect. No department store was ever indicted and it is safe to say none ever will be. It has also failed in its application to combined industries.

Second. The words "railroad" and "railroad rates" do not occur in the statute; hence it was assumed that it had no reference to railroads or to railroad transportation. But the Supreme Court of the United States subsequently declared that it does apply to railroads almost exclusively.

Third. It was assumed that the act applied only to unreasonable or unlawful rates, as the act is entitled "An act to protect trade and commerce against unlawful restraints and monopolies." But the Supreme Court of the United States ruled that the act repealed the common-law rule of reasonableness and by the use of the word "every" included contracts and combinations of all sorts, whether reasonable or unreasonable.

Fourth. It was the main intent of the law to conserve competition and to prevent combinations. It had just the opposite effect as it applied to the railroads. It forced them to consolidate.

Fifth. The act is commonly known as the "Sherman antitrust act," but Senator Hoar, chairman of the Senate Committee on the Judiciary, declared in a speech in the Senate on January 6, 1903, that Senator Sherman "had nothing to do with it whatever."

Did ever any such series of misadventures attend any other act of Congress? I had a full and free conference on the subject with Senator Hoar and he handed to me this copy of his speech in galley slips which I hold in my hand. I prize it highly in remembrance of the great Senator. It is entitled "Speech of Senator Hoar, delivered in the Senate Tuesday, January 6, 1903."

In this speech occur the following expressions:

We undertook by law to clothe the courts with the power and impose on them and the Department of Justice the duty of preventing all combinations in restraint of trade. It was believed that the phrase "in restraint of trade" had a technical and well-understood meaning in the law. It was not thought that it included every restraint of trade whether healthy or injurious.

We were disappointed in one particular. The court by one majority, and against the very earnest and emphatic dissent of some of its great lawyers, declined to give a technical meaning to the phrase "in restraint of trade," and held, in one important case, that if trade were restrained by an agreement it was no matter whether it were injuriously restrained or no.

The judicial history of the act is clearly stated in Senate Document No. 73, Fifty-ninth Congress, second session, the same being a "Reply of Attorney-General Knox, dated January 3, 1903, to a communication dated December 20, 1902, from the Hon. George F. Hoar, chairman of the Committee on the Judiciary of the United States Senate.' From this official record, it appears that the first case tried under the "Antitrust act of July 2, 1890," was the case of United States v. E. C. Knight Company, a Sugar Trust case involving a combination of sugar refineries assumed to be a combination in restraint of trade or commerce in refined sugar.

Senator NELSON. That was the sugar case. We know how that was tried. The material point in that case was that the power of the Federal Government did not extend to manufacture, but only to

commerce.

Mr. NIMMO. Did not extend to the regulation of production.
Senator NELSON. Yes.

Mr. NIMMO. The Supreme Court of the United States held that it was not within the prohibition of the antitrust act, which related to

commerce among the States, and that it was for the States to regulate production. This decision was rendered March 26, 1896.

This seems to knock the whole antitrust act in the head, for it was still assumed that the act related only to commercial and industrial contracts or combinations.

But in the course of three years some fertile brain conceived the idea that perhaps the act applied to railroad combinations, notwithstanding the fact that the words "railroad" or "railroad rates" are not in the act. Accordingly a case was instituted against the TransMissouri Freight Association. It was appealed from the district court of Kansas to the circuit court of appeals of the eighth district, both of which decided that the act does not apply to railroads, but the Supreme Court of the United States on March 22, 1897, decided that the law does apply to railroads and that it prohibits all contracts in restraint of trade or commerce among the States and with foreign nations whether the restraint be reasonable or unreasonable; in other words, that it repeals the time-honored rule of the common law, which I have already characterized as misadventure number three.

Senator CLARKE. In what case was that decided?

Mr. NIMMO. In the Trans-Missouri case.

Senator CLARKE. Did not Judge Brewer afterwards in his separate opinion state that he agreed to that judgment simply because in that particular case the agreement was unreasonable? However, proceed with your argument. I shall not interrupt you.

Mr. NIMMO. The opinion in this case was opposed by four great justices Justices White, Field, Gray, and Shiras-upon the ground that the only restraints condemned by the statute were unreasonable restraints, which, as remarked by Senator Hoar, are unlawful at common law. The crudity and the utter impracticability of the antitrust act of July 2, 1890, is now generally conceded. In his recent special message to Congress, dated March 25, 1908, President Roosevelt said:

This antitrust act was a most unwisely drawn statute. It is mischievous and unwholesome to keep upon the statute book, unmodified, a law like the antitrust law, which, while in practice only partially effective against vicious combinations, has nevertheless in theory been construed so as sweepingly to prohibit every combination for the transaction of modern business. The Congress can not afford to leave it on the statute book in its present shape.

So far we are all agreed. But just here we come to the parting of the ways. This Senate bill 6440 is based upon the idea that the antitrust act of July 2, 1890, with all its crudities and misadventures, shall stand and that upon it shall be constructed a system of administrative supervision and control of commerce, industry, agriculture, and labor, and of railroad property, involving the establishment of a dispensing power which is foreign to our American ideas of government and expressive only of bureaucratic rule, a most hateful form of tyranny which the English-speaking people of the globe long since abolished when they established the principles of liberty regulated by law. This I have endeavored to explain in a recent pamphlet entitled "Judicial and Administrative Supervision and Control of Railway Affairs; and Historical Argument." I will hand to you a copy of that document and request that it may be regarded as a part of my testimony.

This bill (S. 6440) now before you proposes an illogical and, to my mind, most absurd scheme of regulation, ingrafted upon a legislative misadventure which, if adopted, would continue under most flagrant conditions the legislative and judicial troubles through which this country has passed during the last eighteen years, or since the enactment of the unfortunate antitrust act of July 2, 1890. It proposes to leave on the statute books the first six sections of that act which repealed a wholesale provision of the common law dictated by the common sense of mankind. This Senator Hoar deprecated, and in regard to it Senator Knox, while filling the office of Attorney-General of the United States, said:

It is difficult to improve upon the great unwritten code known as the common law. Under its salutary guaranties and restraints the English-speaking people have attained their wealth and power. It condemns monopoly and contracts in restraint of trade as well.

But this bill (S. 6440) goes further in the false move toward the abrogation of the protection afforded to human society in the common law. It proposes, contrary to the principles of the Constitution of the United States, to confer upon an officer of the administrative Government-the Commissioner of Corporations-and upon a bureau of the administrative Government-the Interstate Commerce Commission-judicial powers, thus fulfilling the words of Mr. Justice Brewer, who said a few months ago:

Legislation may be turning everything over to commissions, but the courts have not yet been heard from.

He added in the same connection:

When the matter of legislation by commission gets to the courts, they will be found upholding the Constitution with the same fidelity in which it has been held since the days of John Marshall.

To particularize, this bill proposes to confer upon the Commissioner of Corporations the function of issuing registers, which are essenrially licenses to commercial and industrial corporations and associations, to farmers' associations, and to labor organizations for the purpose of enabling them to enter into combinations. The idea of issuing licenses to conduct any sort of legitimate business in a land devoted to liberty by the Constitution of 1787 appears to me to be a shocking travesty upon American institutions.

Furthermore, this mischievous bill in explicit terms confers upon the Commissioner of Corporations, subject to the concurrence of the Secretary of Commerce and Labor and to regulations prescribed by the President of the United States, purely judicial functions, which the Constitution of the United States confers upon the "judicial power of the United States." In a word, it proposes to institute a system of administrative supervision and control over the commercial, industrial, and labor interests of this country, contrary to the principles of liberty which have from the beginning characterized our governmental institutions. It proposes, in short, to institute an administrative dispensing power, in the nature of bureaucracy, a form of government repelled by the English-speaking people of the globe centuries ago, and which can never be revived in this country consecrated by the fathers to the supreme object of securing "the blessing of liberty to ourselves and our posterity."