meant a war of the survival of the fittest; it meant that a large percentage, as in old times, of the people engaged in the manufacture of steel would be forced into bankruptcy, for many reasons - their facilities for manufacture were not so good, their cost of production was high, their equipment, their organization, their decreased ownership of some of the raw products and other things of that kind which enter into the cost of production, would place them at a disadvantage, and therefore it was believed, by me at least, that it was not for the best interests of the manufacturer generally, or for their customers, who desired stability as opposed to demoralization and wide fluctuations, or for the employes of the various corporations throughout the country, who desired, so far as possible, steady work-continuous work at the best prices; and a wide, sudden, extreme lowering of prices necessarily meant reduction in wages."*

Every sharer in the distribution of the products of industry is vitally interested in the successful elaboration of a policy that will set reasonable limits to price fluctuations. For, whatever each participant gets comes out of the selling price. Under unbalanced relations of supply and demand, long-term contracts become impolitic, if not impossible. Uncertainty rules where foresight should prevail. The owner of natural resources, the lender of capital, the * Hearings, 62nd Cong., 2nd Sess., 1911-12.

wage-earner, and the business manager- - all of these are a unit in wanting to find some way out of the chaos of unrestrained competition. There is, in theory at least, a line within which competition is both free and fair, and, therefore, constructive; a line beyond which lies economic wreckage or monopoly. It is to the interest of every member of society that such a line of demarkation be discovered and defined, because it marks the boundary between economic life and death, between civilization and relapse to savagery.

5. Extending Control Over Railway Domain

There is no more instructive development in trust policy within recent decades than that in which the Supreme Court extends the Trust Act. over the domain of railway transportation. Combinations in railway transportation took three particular forms in the effort to regulate competition and maintain rates. These were (1) pooling, which the Commerce Act of 1887 forbade, (2) community of interest, which in due time was superseded by (3) the holding company. These three are represented in the three great railway anti-trust cases of the TransMissouri Freight Association, the Joint Traffic Association, and the Northern Securities Company.

In the earlier years of the act it was taken for granted that the Trust Act of 1890 and the

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Commerce Act of 1887 were intended to cover two mutually exclusive fields. "It was not the intention of Congress to include common carriers subject to the Act of February 4, 1887, within the provisions of the Act of July 2, 1890 [affirmed the Circuit Court of Kansas, November 28, 1892, when the Trans-Missouri Freight Association case first came up]. It was the purpose of Congress [the opinion of court runs] to remedy a very different evil then existing. A number of combinations in the form of trusts and conspiracies in restraint of trade had sprung up in the country which were dangerous to its commercial interests; for example, the steel-rail trust, cordage trust, the whiskey trust, the Standard Oil trust, dressed beef trust, the schoolbook trust, the gas trust, and numerous trusts and combinations which threatened to destroy the commercial and industrial prosperity of the country. These trusts assumed the absolute control of the various corporations entering into them, directing which of the constituent members of the trust should continue operations and which should cease doing business; how much business should be transacted by each, what prices should be charged for their product, and in fact had the power to direct every detail of the business of every corporation formed in the trust. It was to combinations and conspiracies of this sort that the Act of July 2, 1890, was directed."

Upon these grounds the bill was dismissed, only to re-appear on appeal, October 2, 1893, in the Circuit Court of Appeals, where the original court's ruling was sustained. Justice Sanborn in delivering the opinion concluded: "We rest this decision on the ground that, if the anti-trust act applies to and governs interstate and international transportation and its instrumentalities, the contract and association here in question do not appear to be in violation of it." Thus the Appellate Court assumed the possible applicability of the Trust Act to railway business, partially reversing the court below on this point. But the dissenting opinions of District Judge Shiras went farther in holding that if the Trust Act applied at all, the Trans-Missouri Freight Association was in violation, "in that it deprives the public of the benefit of free competition between the associated railway companies." Thus the case rested until the appeal to the Supreme Court was decided, March 22, 1897. The reversal here of both of the lower decisions not only resulted in making the Trust Act the more general and comprehensive of the two, but also in removing any claim of inconsistency between the General Trust Act and the Special Commerce Act. The court seemed to reason with a tone of apology for its conclusion in the Knight case, in which the Trust Act was declared not to apply to monopolies in manufacturing, but to restraints in commerce. To have now reasoned that it did

not apply to a freight-line pool would have nullified the act itself. "All combinations which are in restraint of trade or commerce are prohibited [declared Associate Justice Peckham], whether in the form of trusts or in any other form whatever." A broader basis for correcting commercial limitations could hardly be desired. It took nearly seven years to forge out this result. But the process did not stop here. The Joint Traffic Association was brought under the same ruling by the decision of October 24, 1898. Here the Supreme Court reversed again the original Circuit Court, which held that the agreement involved did not include a pooling offense because the earnings of the separate roads were left "wholly in separate channels."

In the railway sphere another long step forward in extending the scope of the Anti-Trust Act came with the Northern Securities suit. Here the ownership of two competing railroads was transferred to a third New Jersey holding company with a capital stock of $400,000,000. This subterfuge not only took the control of the property from the stockholders as owners, but it also "destroyed every motive for competition between two roads engaged in interstate traffic, which were naturally competitors for business, by pooling the earnings of the two roads." The decision of March 14, 1904, moreover, put an end to the practice of state legislatures chartering corporations to do business in other states