LAWS AND DECISIONS. XXI. "A great deal of the influence exercised by English and American courts has been due to the fact that they placed economic principles before both sides in a non-partisan version and in an absolutely clear light. There is some danger that the bench will lose this influence, partly because of the increasing complication of modern industry, which renders it difficult for a lawyer to understand the indirect economic effects of his decisions, partly on account of a somewhat dangerous doctrine of sovereignty, which is leading our courts to lay too much stress on precedent and statute, and too little on the common sense of the people. The authority of the court depends, not on the acts of the legislature, not even on uninterrupted tradition, but on the fact that it knows more than the parties between whom it is deciding, and can see the consequences of action more clearly, as well as more impartially, than they can."-From "Economics," by ARTHUR T. HADLEY. How many states and territories have legislated on trusts? Twenty-eight have passed statutes defining and regulating monopoly. What has Congress done in the matter of combinations and trusts? Congress has passed three acts: The so-called interstate commerce act of 1887, the anti-trust act of 1890, and an act of 1894 to prevent combination in foreign trade. What states and territories have legislated on monopolies? The contents of this chapter are mainly gathered from a digest prepared by Prof. J. W. Jenks for the Industrial Commission. Some new matter, however, has been added. "There is no better evidence of the strength of the tendency toward consolidation than is furnished by the multitude of unenforced laws and decisions intended to prevent it."-Arthur T. Hadley on "The Formation and Control of Trusts," in "Scribner's" for November, 1999. In what states has public sentiment been declared against monopolies only by court decisions under the common law? California, New Jersey. Rhode Island. What is the common law? Massachusetts.* The common law is the law not made by parliaments, congresses and legislatures, but the unwritten law of English-speaking Von Halle, in his work on trusts in the United States, reports that by the end of 1894, twenty-two states, one territory, and the federal government, had passed anti-trust laws. After the presidential elections of 1896 there was much legislative activity against trusts. In the winter of 1896-97 anti-trust laws were passed by Georgia, Indiana, Wisconsin, South Carolina, Arkansas, New York, Nebraska, Tennessee, North Dakota and South Dakota. The Georgia act was very sweeping. New York investigated and passed two bills. In Chicago there was agitation against department stores. "Legislative bodies always follow progress, they never lead it. They pose as conservatives, but their conservatism consists for the most part of a very high and uncomfortable collar, beneath which there is no shirt. Selfish ignorance is the word—not conservatism. Legislators do not try to educate or inform their constituents, their sole object being to secure re-election. Their play is to cajole and pacify, hence legal restrictions are often fastened upon organized industry primarily through the sheer ignorance of the masses, and secondly through the truckling selfishness of their representatives."-F. W. Morgan in "Great Problems in Organization," "Cosmopolitan," April, 1899. *In 1892 the Massachusetts legislature directed its United States Senators and Representatives to work for a law prohibiting combinations raising the price of coal. peoples; the law made of principles and rules that are found in court decisions, the opinions of writers and commentators, and the customs of centuries. Then the common law is a perpetual safeguard of the weak against the strong? Yes, so far as it goes. Many states have found the common law sufficient protection against the evils of monopoly, and many courts have found the common law sufficient to cope with monopolies even when anti-monopoly statute laws were at hand. What is next in importance to a law? Its interpretation and application by a court of justice. Have the federal anti-combination acts been well tested in the federal courts? Yes. What was the Pullman case? The great Pullman and railroad strike* of 1894, the case being that of the United States vs. Debs et al. The United States Circuit Court held, December 14, that the trust act forbids com *Eugene Debs and others-officers and directors of the American Railway Union-being managers of the strike, were restrained from committing certain acts, by an injunction issued July 2, 1894, by United States Circuit Judge Woods and United States District Judge Grosscup, sitting in the Northern District of Illinois. On July 17 an information was filed by United States District Attorney Milchrist, alleging the disregard of the injunction by Debs and others constituted contempt of court. On August I another information of similar purport was filed. Judge Woods tried the case, adjudged Debs and associates in contempt of court, and sentenced Debs to six months' imprisonment in Woodstock jail, and the others to three months. Debs and others then petitioned the supreme court of the United States for a writ of habeas corpus, alleging through their attorneys, Lyman Trumbull, S. S. Gregory, Edwin Walker and Clarence S. Darrow-all of Chicago-that Judge Woods had neither authority nor jurisdiction to issue the injunction which the petitioners had ignored. The attorneys for the petitioners argued that the government had no right to invoke the aid of a court of equity to protect public rights and interests, and no right to appeal to chancery in aid of public commerce. The anti-trust act, it was argued, did not apply to the case in hand, and if it did, then the act was unconstitutional. A court of equity had no power under an assumed jurisdiction to issue injunctions and punish for contempt to execute a criminal law, and deprive persons of liberty without jury trial. The injunction had been issued without notice, and the petitions were at liberty to disregard it. Richard Olney, Attorney General of the United States, appeared for the government, defending the lower court, that had issued the injunction, in its assumption of jurisdiction. The supreme court, passing only upon this point, and not upon the constitutionality of the anti-trust law, which had been invoked to restrain Debs and others, dismissed the petition, and suffered the petitioners to finish their terms in jail. In his argument, the attorney general said: "Can there be a doubt that an invasion of property rights and interests which justified the interposition of a court of equity as against one man or two men legally justifies the like interposition when the like invasion is participated in by a hundred or thousand men." binations of labor in restraint of commerce as much as it does combinations of capital. What was the case of the New Orleans draymen? In the case of the strike of the New Orleans draymen in 1893, the Circuit Court held, March 25, that if a combination affects interstate commerce it falls within the trust act whether it be a combination of capital or labor. In what late decision was the constitutionality of the Illinois law of 1893 passed upon? The case of the Union Sewer Pipe Company vs. Connelly, decided in the United States Circuit Court, Northern District of Illinois, January 29, 1900, was a suit to collect for sewer pipe bought. Defendant claimed the pipe company was a combination in restraint of trade, contrary to common, United States, and Illinois law. The court held for the plaintiff, and declared the trust law of Illinois unconstitutional and void. (See Appendix.) Why has the United States Circuit Court declared the trust law of Illinois unconstitutional? Because the statute of July 1, 1893, exempts “agricultural products or live stock while in the hands of the producer or raiser," and this is both class and special legislation, and in contravention of the constitutions of the United States and Illinois. What was the point made by the United States Supreme Court in the sugar trust case? In the case of the United States vs. The American Sugar Refining Company, a New Jersey corporation controlling the sugar refineries of the United States, and having bought stock in four Philadelphia refineries, thus securing a monopoly, the Supreme Court, January 21, 1895, held that if it should regard sugar refining a part of interstate commerce, some sugar being used in the state and some outside, it would concede to the United States, under its grant to regulate commerce between states, the control of nearly all the business within the states. There was nothing shown the court indicating an intention to put a restraint upon trade, and the fact that trade might indirectly be affected was not enough to cause the court to have the purchases set aside. (See Appendix, Justice Harlan's dissenting opinion.) How have the Standard Oil and the Texas law collided? The trust law of Texas was tested and decision given by the United States District Court, February 22, 1897. John D. Rockefeller and others had been indicted under a law making it criminal even for persons outside the state, but who act within the state, to unite to raise or lower prices or limit the production of an article. But the law, Texas having vast agricultural and live stock interests, exempted such property while in the hands of raiser or producer. The court held the law unconstitutional because aimed at people outside of the state, and because prohibiting reasonable combinations. Moreover four-fifths of the people of Texas were farmers and cattle raisers, and a law that exempted such a proportion as that was unreasonable class legislation. How does the federal anti-trust act apply to railroads? An important decision governing railroad combinations was that of the United States vs. The Trans-Missouri Freight Association, given by the supreme court, March 22, 1897. association was a large number of railroads which agreed to establish and maintain rates on all freight traffic. The railroads pleaded that the trust act was not intended to apply to railroads because the interestate commerce act implied the right of the railroads to fix rates, and if Congress had meant to change the commerce act by the trust act it would have said so. The railroads further claimed that the trust act does not apply to reasonable restraint of trade, and that their agreement provided for reasonable restraint only. The court held the commerce and trust acts were consistent with each other, and that the trust act applied to railroads as if there were no commerce act. What is more, the court could not confine the act to contracts in unreasonable restraint of trade, but to every contract in restraint of trade. So the injunction was proper. (See Appendix, Justice Peckham's opinion.) What case shows the status of trade exchanges? In the case of the United States vs. Hopkins et al., the supreme court, October 24, 1898, disagreeing with the circuit court, September 20, 1897, decided a matter of importance to live-stock interests. The defendants were the Kansas City Live-Stock Exchange, making certain agreements about commissions and agents, and providing that no member should do business with a non-member. The circuit court held that in receiving from and shipping stock to foreign states the defendants were in interstate commerce, and their agreement was in restraint of it. They were therefore enjoined. The supreme court unanimously discharged the bill of the lower court, holding the business of the Kansas City LiveStock Exchange was not interstate commerce, declaring that facilities or services furnished in connection with interstate commerce are not part of that commerce, and agreements or combinations to fix or maintain charges for such assistance are not within the trust act. In what railroad case did the supreme court repeat its declaration about agreements preventive of competition? The bearing of the trust act upon railroad agreements is well shown in the case of the United States vs. Joint Traffic Association, decision being given by the supreme court October 29, 1898. This association, comprising thirty-one railroad companies operat |