124929 HEN the report of the Committee on Uniformity of Legisla WHEN tion was submitted to the last American Bar Association, and consideration of the legal problems growing out of modern commercial combinations, was urged as a matter proper for discussion and action by that association, it was gravely argued by distinguished lawyers present that there was no legal problem to be solved. The Committee on Commercial Law, however, thought otherwise and said: "The American people look to the American Bar for leadership on this question. Some one must lead. If not the lawyer, then it will be the demagogue." I. Is there a legal problem involved? The writer thinks there is; this view, however, having been challenged, perhaps it is worth while to recall something of the basis for the general belief that there is a problem of a legal character. Early in the seventies railroad amalgamation and pools became frequent, and to counteract, in some measure, the result,' the state legislatures very promptly established railroad commissions, and passed maximum rate laws. In the eighties the alliance between large shippers and transportation companies, with glaring freight discriminations was made clear by the investigations of the Ohio, New York, and Ontario legislatures, and the United States Congress, and twenty or more State Anti-trust Acts,1 and the Interstate Commerce Act, and the National Anti-trust Acts, were passed. These proved insufficient, and combination and discrimination continued. Just before the Chicago Trust Conference, held in Sept. 1899, the Civic Federation gathered the opinions of a great number of business men throughout the country as to what was the effect of these combinations, with this result: 105 thought consumers were injured, 24 thought they were benefited, and 41 thought there was no difference; 452 out of 506 thought prices were raised; 293 out of 356, thought there was danger to investors; 266 out of 345 thought the large capitalization was dangerous to our financial system; 300 thought our foreign trade would be benefited; 180 thought wages were increased; 148 thought they were decreased, and 67 were doubtful; 270 regarded the tendency to combination "with appre 1 See Trust and Corporation Laws, Vol. II. of Report of Industrial Commission) 24 Stat. at Large 379, Feby 4, 1887. 26 Stat. at Large 209, July 2, 1890; 28 Stat. at Large 570, Aug. 15, 1894. 4 Professor David Kinley, Trust Conference Report, p. 530. hension;" 149 thought there was no danger, and 34 were doubtful; and 340 out of 431 thought some sort of legal remedy should be applied. The opinions of the leading delegates to this conference, collected by the Times-Herald,' agreed that the trusts were a menace to the people, and most of them believed in federal control. While the trust conference itself passed no resolutions on the subject, the vast majority of the speeches indicated an apprehension of grave danger, and suggested various legal remedies. The trust conference of the governors and attorneys-general, held at St. Louis at the same time, vigorously denounced such combinations and recommended radical legal remedies. The platforms of the political parties for several years have resolved that there is danger from such combinations, and urged legislative action; the messages of the governors and presidents have done likewise. Many of the states in the past few years have passed more stringent anti-trust acts, and many bills have been before Congress looking to further legal regulation. The Industrial Commission after the fullest investigation, without dissent considered that a great many things were out of joint, and urged in detail many legal remedies,2 some of which found expression or partial expression in the act3 to forward the prosecution of offenders against the anti-trust and interstate commerce laws, the anti-rebate act, and the act5 creating the Department of Commerce and Labor. 4 Such a consensus of opinion and action would indicate there is a legal problem involved. II. Genesis of the problem. The leading legal conditions under which the problem has developed have been the following: (1) The exclusive power of the National Government to control interstate commerce; (2) The unprecedented growth of corporations and corporate power; (3) The power of corporations to engage in interstate commerce; (4) The inaction of Congress in regulating such commerce. A short review of these may make clearer the policy, power, duty, and method of meeting the problem. 1. The first pertinent inquiry is why and how did the power to 1 Sept. 11, 1899. 2 Report Vol. I, p. 5; Vol. XIX., pp. 197, 481, 649, 947, 1010, 1067, 1083. 3 Feby 11, 1903, ch. 544 ? 3. 4 Feby 19, 1903, ch. 708. 5 Feby 14, 1903, No. 87. regulate commerce come to be given to Congress, and what duty to promote the general welfare arises thereunder? In 1753 George Washington was sent by Governor Dinwiddie to the French forts above Pittsburg on the Allegheny river to inquire by what authority the French were, and to warn them from, invading Virginia territory.1 Upon his return he urged upon the governor "the subject of uniting the East and West by means of a public highway." Though not heeded Washington's idea grew into "a picture of commercial grandeur for the Old Dominion," to be attained "by building a highway over the mountains and connecting its eastern and western termini with navigable waterways, natural, or if necessary, artificial." The plan filled his mind, and he studied maps and routes in detail, and urged the desirability of the project among his friends. In 1774 after another western trip, he brought his plan before the House of Burgesses of Virginia, by introducing and moving "the adoption of a bill which empowered individuals to subscribe toward such an enterprise, and construct a communication at their own expense. A similar bill was brought before the Assembly of Maryland, but jealousies regarding western trade between Georgetown, and Baltimore, Md., prevented favorable action by either state. Then the revolution came, and for ten years Washington could give no further attention to these plans. After the success of the revolution, "the project was of national importance-to bind the East and West with the iron bands of commercial intercourse and sympathy,' to overcome the mountain divide, and to counteract the tendency of the trade of the then West to glide down the Mississippi to the Spanish ports. To forward his plans, Washington had surveyed at his own. expense the roadway over the mountains from Cumberland, Md., to the Ohio river, and this road, twenty years later, became "the chain of the Federal Union" by the construction on the same route of the National road, and later by the construction of the Chesapeake and Ohio canal, and the Baltimore and Ohio railroad. In 1784 he made another western trip, and on his return reported to the governor of Virginia, urging legislative action, saying in a letter “the object in my estimation is of vast commercial and political importance. ''5 1 Historic Highways, A. B. Hulbert, Vol. 3, p. 108. 3 Ib. 190. "Accordingly the "Potowmac Company," "to open the navigation of the Potomac and James rivers,' was chartered by Virginia and Maryland.' A joint commission to regulate the navigation of Chesapeake bay was appointed in 1785 by these two states, and this met at Mt. Vernon for consultation with Washington. His broader plans contemplated connecting the navigation of the bay and the Potomac, in some way with that of the Ohio; this would require Pennsylvania to join, and Washington also urged that Maryland and Virginia should settle upon a uniform system of duties, commercial regulations, and currency. These suggestions were sent to the legislatures of the two states; Maryland adopted them, and added that Delaware should also be consulted, and a conference of commissioners from all the states should be called. A little later the Virginia legislature passed a resolution based upon the report, suggested by Madison, inviting commissioners from all the states to meet at Annapolis, September 11, 1786, "To take into consideration the trade of the United States, to consider how far a uniform system in their commercial regulations, may be necessary to their common interest and their permanent harmony; to report an act, etc."' The commercial difficulties for which the Articles of Confederation furnished no remedy, never ceased to be a source of discord. "New Jersey, placed between Philadelphia and New York, was likened to a cask tapped at both ends; and North Carolina, between Virginia and South Carolina, to a patient bleeding at both arms. New Jersey, "who had insisted that control of commerce was a National affair," in appointing her commissioners, had authorized them to consider not only commercial, but "other important matters." Only five states responded to the call, and nothing could be done except to recommend the calling of another convention. Hamilton wrote the report and call of the commissioners, saying:"In the course of their reflections they have been induced to think that the power of regulating trade is of such comprehensive extent, and will enter so far into the general system of the Federal Government, that to give it efficacy and to obviate questions and doubts concerning its precise nature and limits may require a correspondent adjustment of the other parts of the Federal system,' 195 * * 1 Hist. Highways Vol. 3, p. 194-7: 1 Va. Laws Rev. 1803, p. 440, 446; I Laws of Md. Ed. 1811, D. 488. 1 Doct. Hist. Const. p. 2; Journal Constl. Conv. p. 36. Journal Constl, Conv. p. 33. 4 Secret Journals of Cong. 1, 359, Journal of Convention, p. 39. |