report of the Commission focused public attention upon the size and power as well as on some of the excesses of trusts, especially in relation to stockwatering, promotion profits and unfair competition. Largely as a result of the Commission's work the Bureau of Corporations was organized in 1903 under the Department of Commerce and Labor.

The chief function for which the Bureau was created was to furnish information to the government for purposes of legislation in connection with corporations and combinations. The various investigations conducted by the Bureau and its reports were a potent influence in the successful prosecution by the Department of Justice of several anti-trust suits, were instrumental in bringing about needed legislation and above all proved of valuable service in furnishing accurate information to the public with regard to some of the most important industrial combinations. The helpful service of the Bureau led Congress, in 1914, to create the Federal Trade Commission into which the Bureau of Corporations was merged,

1

CHAPTER III.
HAPTER

Legal Measures for Suppressing Trusts, Culminating in The Sherman Anti-trust Act.

Sherman Law and Other Anti-trust Laws. The Occasion for Their Enactment; The Advantages to the People Which Have Accrued Therefrom; And the Likelihood of Present or Future Need for Such Protective

Monopolies and engrossing (as the practice is styled in English law) are features of communal life which date back to the earliest dawn of history; they are the veritable offspring of human selfishness and greed.

History Discloses Trade Monopolies.

While records are not altogether wanting of oppressive combinations in control of staple articles of human supplies in ancient and medieval times, the rights pertaining to kingcraft and the other forms of government then in force differ so greatly from the constitutional forms now in almost universal use throughout the civilized world, that we shall find it most convenient and useful to direct our attention to those examples which modern history affords. One exception, however, exists; and the student of history quickly discovers that in England alone the traditional rights of the subject in King Alfred's reign have survived and form the bedrock of the common and statute laws under which the commonwealth of Great Britain is governed today.

Initial English Decision is Ruling Authority.

By common consent, the judicial ruling in Darcy v. Allen,' is esteemed the original “anti-trust" decision. Despite its antiquity, (it was decided in 1602), that case is still much cited; indeed, it is discussed in nearly every recent opinion which deals at all extensively with monopolies and trusts. Feeling ourselves justified by the important place it occupies in our description of the Sherman Act and the other anti-trust laws, we shall not apologize for a somewhat extended treatment of that notable ruling and of the parties to that historic suit.

By consulting the quaintly termed record of those early court proceedings we learn that Edward Darcy, a courtier and groom of the privy chamber to Queen Elizabeth, brought suit against one T. Allen, a haberdasher of London, alleging as his grievance that, whereas the making of playing cards was a useless occupation and whereas by maintaining the price at a low level, "card playing was become more frequent, and especially among servants and apprentices and poor artificers; and to the end her subjects might employ themselves to more lawful and necessary trades," therefore, the Queen "intending that her subjects being able men to exercise husbandry, should apply themselves thereto❞—had granted to the plaintiff a monopoly of importing or manufacturing playing cards for a term of twenty-one years. The complaint further sets forth that the defendant "without the Queen's license, or the plaintiff's, caused to be made eighty grosses of playing cards" which he had "sold and uttered to sundry persons unknown," and asks damages.

The defendant Allen, in answer, alleges that he was a merchant of London and was entitled to buy and sell unhindered by royal restriction or grants.

To this answer the plaintiff demurred; but the demurrer was not sustained; and in its ruling holding the plaintiff's monopoly to be against the public interest and unenforceable, the court says that monopolies are universally characterized by the fol

111 Coke 84.

lowing incidents, which indicate their injurious effect upon the public welfare:

"(a) That the price of the same commodity will be raised; for he who has the sole selling of any commodity may and will make the price as he chooses.

"(b) That after the monopoly granted, the commodity is not so good and merchantable as it was before, for the patentee, having the sole trade, regards only his private benefit and not the commonwealth.

"(c) It tends to the impoverishment of divers artificers and others who before by the labor of their hands in their art or trade, had maintained themselves and their families who now will of necessity be constrained to live in idleness and beggary."

Mentally the Tudors were no whit better equipped than their successors in the Stuart dynasty; but politically the former were much more pliant and conciliatory. It was accordingly given out that grants of monopolies would cease; that they originated under the mistaken belief that they would benefit the commonwealth; and that the Monarch fully recognized the injury such restrictions occasioned in interfering with or altogether suppressing traffic in important commodities forming part of the trade of his realm.

Darcy v. Allen Declarative of Anti-trust Doctrine.

The case of Darcy v. Allen established or rather, proclaimed the English doctrine regarding restraints of commerce; and while doubtless there have been periods of infraction, these lapses are only exceptions-for more than three centuries the salutary rule discountenancing and penalizing monopolies and trade rcstraints has remained unchanged. Indeed, it would be difficult to frame, even at this late day, a better arraignment of trusts and monopolies; and their exists no abler statement of the dire results than is contained in that old-time suit brought by a courtier against a merchant, to enforce a private grant of exclusive rights in trade.

In the United States we find very few court cases dealing with monopolies or trade-restraints, down to the period of the Civil War. Presumably, the country was so amply endowed with natural resources that the majority of citizens had at their command the things essential to the support of life; and assuming this to be so, our domestic corporations, even if they could assemble capital sufficient to monopolize household necessities, did not have a sufficient inducement to enter the field of traderestraint, had they been so inclined at the Civil War period.

Monopolies Follow in Wake of Civil War.

With cessation of that internecine conflict, the situation changed radically and immediately. Thousands of able officers, released from active service at the very prime of life, sought occupation and wealth by prospecting and exploration and in the further development of established industries. Hundreds of thousands of soldiers, duly discharged upon the disbanding of the Union and Confederate armies, hastened to join in the search for profitable employment. Amid such auspicious circumstances it was a natural and easy matter to organize companies, regiments and even armies of efficient workmen from the supply of willing labor so opportunely at command. Capital doubled and quadrupled in marvelous fashion; and increasing capital plus abundant labor equalled great prosperity-to express the post— bellum conditions in arithmetical terms.

Centralizing Influence Strongest in Oil Industry.

In one department of domestic industry, amid feverish excitement, this era of prosperity developed rapidly and to a phenomenal extent. Certainly no other field experienced a greater impetus than that connected with the discovery, production and marketing of natural oil. At one blow the development of the petroleum industry extinguished the fleet of whalers that formerly departed day by day from New Bedford to visit the farthest seas. It was obviously wasted effort to voyage abroad for an article which was flowing from the soil at home.