Mr. BARTLETT. All right, sir. I shall try to answer it.

Mr. CARNEGIE. If there were no law against it would there be any wrong?

Mr. BARTLETT. It is against the common law.

Mr. CARNEGIE. Then, what is the use of talking about a question when there is a law? You say there is a law, therefore, I say it is wrong if there is a law against it.

Mr. BARTLETT. Is there no moral law or any feeling in your mind that it is against a moral law to do it?

Mr. CARNEGIE. There is no moral law that would be effective in the state of human nature as it is now. It is an absolute necessity for you gentlemen to have a law against it. Then, you are safe. In the interests of the consumer we must have a law.

Mr. BARTLETT. Do you think it is good morals for people engaged in the manufacture of necessary articles for the use of the public to form combinations so as to prevent competition, or to destroy competition, with the purpose of charging the consumer as high a price as possible?

Mr. CARNEGIE. Now, I will answer that question.

Mr. BARTLETT. All right.

Mr. CARNEGIE. Have they not done so.

Mr. BARTLETT. I do not know. I ask you.

Mr. CARNEGIE. But I assume that you do know, judge.

Mr. BARTLETT. I think they have. I think they have tried it.

Mr. CARNEGIE. Why do you only say that you think so? You see

the prices that they have charged?

Mr. BARTLETT. That is my judgment-that they have.

Mr. CARNEGIE. Let me tell you

Mr. BARTLETT. I think it it highly immoral, just as much as I think it would be immoral for a man to charge 25 per cent interest upon money, 21 per cent a month, or 30 per cent or 50 per cent.

Mr. CARNEGIE. We have a law in New York that interest is 7 per cent, and a man who charges more is doing something immoral, unlawful, but I have known men who lent money for what it was worth. There is a large class that do that.

Mr. BARTLETT. And violate the law?

Mr. CARNEGIE. No; that is not violating the law, I think.

Mr. BARTLETT. And they are men in high business circles, too, are they not, who stand high?

Mr. CARNEGIE. Wait a moment. Is there no means by which a man can lend his capital above the rate of interest? Is not there a form

Mr. BARTLETT. Not in my State. I do not know how it is in New York.

Mr. CARNEGIE. It is done so much in New York, I judge, from reading in the papers. [Laughter.]

Mr. BARTLETT. I understand that that is the greatest center of the violation of the law in business matters in this country.

Mr. CARNEGIE. Judge, whether under the moral law we would attain the results you aim for or not, is the question. I say we would not, and therefore that you gentlemen must propose a law, so clear and explicit that "He who runs may read." Then you will put him in the penitentiary if he breaks the law.

Mr. BARTLETT. When do you think that these gentlemen engaged in these large businesses had their coinsciences awakened to the impropriety of combinations and charging people large prices?

Mr. CARNEGIE. From the day that they made up their minds that the American people would not stand combinations

Mr. BARTLETT. I am excepting you from that class, because you have stated your opinion was formed before that. But is it not a fact that they never made up their minds that it was morally wrong or legally wrong until the Supreme Court decided that they could not do it?

Mr. CARNEGIE. Ask them that question, Judge.

Mr. BARTLETT. I ask for your opinion. That is all.

Mr. CARNEGIE. My opinion? No. My opinion amounts to little

there.

Mr. BARRETT. It amounts to a good deal, I think.

Mr. CARNEGIE. Oh, no, Judge; do not let us waste time in that way. Let us get an effective law that will make it unlawful, and then you can punish them if they break the law.

Mr. BARTLETT. Do you think that Congress, if it passes such a law as you recommend, should permit restraints of trade and monopolies at all; that any law that Congress might perhaps enact should permit combinations in restraint of trade at all, or monopolies?

Mr. CARNEGIE. I do not get the bearing of your question.

Mr. BARTLETT. You suggested that Congress ought to make a law, and make it clear. And that is one reason for this investigation, to see if this committee can not evolve some law to suggest to Congress. Mr. CARNEGIE. Has Congress not made a law for an Interstate Commerce Commission?

Mr. BARTLETT. Relative to railroads; yes, sir.

Mr. CARNEGIE. Yes. I want you to do exactly the same thing in regard to industrialism. Exactly. You need nothing less. Then the evil will be cured.

If you had seen the demoralization in railroads that I have seen, far worse than anything in industrialism, gentlemen, you would appreciate why I recommend such a law. Gentlemen, your pathway is clear.

Mr. BARTLETT. You do not answer the question, Mr. Carnegie.

Do you think or suggest that, in the law you say Congress should pass regulating this business, there should be permitted by the corporations a monopoly of the business or restraint of trade in interstate commerce by them?

Mr. CARNEGIE. The law would not amount to anything if they were permitted to go on. You need a drastic law.

Mr. BARTLETT. A drastic law that does not permit either monopoly or restraint of interstate trade?

Mr. CARNEGIE. Not a particle.

Mr. BARTLETT. That is all that the Sherman law does now.

Mr. CARNEGIE. Very well. If the Sherman law be effective, give it a trial.

Mr. BARTLETT. It is pretty effective when it is about to destroy two gigantic monopolies.

Mr. CARNEGIE. Well, sir, I hear so many people declaring that they do not know when they break it or how they break it.

Mr. BARTLETT. You do not know when you convict a man who has violated the law that he will not violate it again?

Mr. CARNEGIE. I do not believe that the law is half drastic enough. Mr. BARTLETT. You do not?

Mr. CARNEGIE. There is something the matter with it.

Mr. BARTLETT. The complaint generally is that it is too drastic. Mr. CARNEGIE. I think it will be made so, because it will create that court or commission which will have power to fix rates. You have not anything like that under the Sherman law. The Sherman law is all negative: "You can not do this." "You can not do that." What we want is positive action, telling them both what they can do and what they can not do; and then punish them if they disobey it.

The reason I think this commission should have the power to fix maximum prices is this: I have no objection whatever

Mr. BARTLETT. How would you like to provide a "reasonable " price for their products?

Mr. CARNEGIE. Reasonable? There is no reason in that. Reasonable! The seller would think it was worth $50 and you would not give $25. Reasonable! Now, Judge, I just put that question to you. Ask two men, the buyer and the seller, what is reasonable, and see what they say!

Mr. BARTLETT. That is the term used in the railroad-rate law, at least. If it is ridiculous, Congress has for nearly 35 years used the word in the interstate-commerce law.

Mr. CARNEGIE. But that is after you have got the court

Mr. BARTLETT. No; it was before we had the court.

Mr. CARNEGIE. But the commission followed.

Mr. BARTLETT. Oh! The commission. The court, you said. Mr. CARNEGIE. The commission, I meant, Judge. The commission had to follow. The commission is there.

Mr. BARTLETT. Is your criticism of the Sherman law that it is not drastic enough?

Mr. CARNEGIE. I do not know whether it is or not.

Mr. BARTLETT. I understood you to say a moment ago that you did not think it was drastic enough.

Mr. CARNEGIE. Because I hear so many people declare that they do not know what to do. Judge Gary says he is not quite sure how to act under it; and I believe that he is a thoroughly honest man and wishes to obey the law.

Mr. BARTLETT. I agree with you about that.

Mr. CARNEGIE. You agree?

Mr. BARTLETT. I agree with you that he wishes to obey the law, and that he would like to have the law changed. I will not say that this applies to Judge Gary-but people who have been engaged in business have disobeyed the law

Mr. CARNEGIE. He not only wants it changed, but he wants it made so clear that he and everybody will know just exactly what it is. He wants such restrictions as he understands, and that he can obey.

Mr. BARTLETT. Do you know there is an old saying-I will not quote all of it-that no man who ever felt the law has a good opinion of the law, anyway?

Mr. CARNEGIE. Well, you would not hang any of these men?

Mr. BARTLETT. No; I would not hang anybody, hardly, but I would not permit the practices that have heretofore been carried on to continue, if I could help it.

!

Mr. CARNEGIE. I am with you, Judge, in that.

Mr. BARTLETT. Because a monopoly certainly of the necessities of life, and the products which the people are compelled to have-is odious to all English-speaking people.

Mr. CARNEGIE. Amen.

Mr. BARTLETT. And it did not take the decision of the Supreme Court of the United States in 1911 to decide that question. We have it back from the earliest English authorities, beginning with the decisions of Lord Coke.

Mr. CARNEGIE. There is something lacking. You need something. You need another measure to produce the effect desired.

Mr. BARTLETT. What was lacking, in my opinion, was the disposition of the men engaged in large businesses not to regard the law until they were brought up against its firm fist. That is my opinion. Mr. CARNEGIE. I think you will find the leading manufacturers of America prepared to swear that that was not the real reason; that they did not understand what was lawful and what was not lawful I will claim that justice for them.

Mr. BARTLETT. I will change it and say that they did not try to find out or to understand it properly. That is all.

Mr. GARDNER. Mr. Carnegie, just to clear up this subject, I want to make this statement first and then you will see what I am driving at:

There are two lines of thought developing in this country amongst the people who think that the present state of affairs in large industries, or, as people now call them, large units of production, need some change.

There is the line of thought which perhaps I could express best by President Taft's message, which believes that dissolution of large units should go on under the existing Sherman law. There is a line of thought which I can best express by calling it the one indicated by ex-President Roosevelt in the Outlook article, which looks to the recognition of large units, but their control by a court or commission such as you are asking for.

Do you follow me up to that point?

Mr. CARNEGIE. Certainly, Mr. Gardner.

Mr. GARDNER. In which class of mind do you find yourself? Mr. CARNEGIE. Mr. Gardner, I, of course, am familiar with Mr. Roosevelt's position, and I have heard from him on the subject and have agreed with him.

I think that, for the present, you should allow large organizations to continue and you should pass what we recommend this law for a commission to fix maximum prices. That is a step in the right direction.

If you will be patient we shall see whether that needs any further legislation, and, if so, we shall make it. Your successors will make it if you do not. They will have all the facts before them, which we have not.

In taking a new path I would only go to the first resting place and sit there and await results. And I hope you will agree with me in that, and that we should not assume what will happen from this legislation until we give it a trial. I hope you will agree with that. Mr. GARDNER. Your present idea, Mr. Carnegie, is that, for the present at least, we should travel in the direction of the recognition,

by Government control over large units, such as the same direction which we have taken with regard to railroad corporations?

Mr. CARNEGIE. Certainly. Do you agree with that? I would like very much to know.

Mr. GARDNER. I have not altogether made up my mind. I will be perfectly frank. I shall give indications in this colloquy-because 1 shall not call it an examination-of the way my mind is working. Mr. CARNEGIE. I shall be delighted to hear it.

Mr. GARDNER. I think that the American people are overwhelmingly in favor of the dissolution being tried. This is simply my opinion. I think they are in favor of dissolution being tried, with a view to seeing whether they can not reestablish the old conditions of competition, which we all most reluctantly, and I have no doubt you have most reluctantly, abandoned. I have no doubt that you reluctantly abandoned your formerly expressed belief that competition without Government control would work itself out on what was known as the old laissez faire doctrine. I, like everybody else, am exceedingly unwilling to abandon that view. But here is a question that is facing a man like myself. I am not speaking for my party associates on this committee, although I shall try to harmonize my views with the whole committee when it comes to report, if it is a possible thing.

Here is the point: Assuming that I am right in supposing that the American people are determined to have this dissolution tried, then two more branches open out as the thing for legislators to do. It seems to me the question then becomes whether you are going to leave the Sherman Act as it is or whether you are going to make it more drastic, with a view to making this dissolution more hasty and more perfect. So that when you get men in a confused way answering questions at random as to whether it should be made more drastic or not, you must first ascertain in which general direction they think that we ought to go.

I am of this opinion, Mr. Carnegie, and have made up my mind sufficiently to say, in answer to your question, this: That if we decide, in deference to the overwhelming, as I believe, public demand that we should travel in the direction of dissolution, whether or not then the Sherman law ought not to be made more drastic in order to facilitate that dissolution. You catch my position as far as I go? Mr. CARNEGIE. Certainly.

Mr. GARDNER. I am not speaking as to whether I believe that dissolution will be a success or a failure, and that ultimately we will have to go on the other journey. My mind is rather-and I do not mind saying this-inclining to the belief that I have got to abandon the old laissez faire doctrine and to believe, as you do, that we must go in this direction. If I come to that resolution I shall make that report in this committee, if I am the only one reporting it.

Mr. CARNEGIE. Exactly.

Mr. GARDNER. But I might very well say that, though that is my individual view as to what should be done in the future, nevertheless in the present, as the people in my opinion are going the other way, the thing to be done in the present is to start the powers of the Government in the direction of dissolution.

Do you follow me?

Mr. CARNEGIE. Yes. Certainly.