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About Morning Oregonian. (Portland, Or.) 1861-1937 | View Entire Issue (Dec. 6, 1911)
( TTIE MORXIXO OREGOXIAN, WEDNESDAY, DECEMBER 6, 1911. .! TAFT WOULD RETAIN, BUT ADD TO, TRUST LAW ' mm aSHINGTO. Deo. I. President f Tafte mtuii. which wu rud " la Congress today, was) aa fol- 't low: Ta ths Saaate and Boom of Rspisesnts tlrse: Thl Bmt Is the first of several which I stiaJI ssnd to Cotirw 4ortn tho latsrral klNa to op.nin of Ita raruler huIoi and Ita adjournment for tho Chr.otmaa aoll Ati. Taa amount of Information to ba . aoauBBBlcaMd aa to tho paralloae of tho . OOTtramtsl. tho narabor of Important ruo- Jocta eaillns; for eommont br tho KloruUvo. and tho trmnamLMloa to roncroaa of -aatistlTa rprts of special commissions, snaas It tmsoaalblo to Includ In ona BWI . mMiM least a d:scuasloa of tho mka that eubl ta bo brooaht to tho attsa- tiaa of tho National Lsataiatare ml Its ttret rog-aiar amino. Aatl-Tras Law oad c la XtT last tho Suprame Court Bandog ,n dc:sios In tha sulta la o-juity brouht tho I attsd States to onJo:n tha furtnsr laalnt.nanco of tho btandard OH Trust and of tha Amortcan Tobacco Truat. and to so cur thoir duaolutloa. Tho decisions are apocB-maktna and asrv. to advise tho busi aaaa world authorttativ.ly of tho acopo ana " operation of tha anti-trust act of Tho decisions do not depart In any -taatlal war from tha previous dsoisiooaot tha court la eontruln and applying- thla Important statut. but th.y clartf tho.a decisions by furthor dcflnina tho aJroaay admitted oaeaptlona to tho literal eonatruo . ton of tho act. Hy tha docrora. th.y fur- tub a aarful precedent aa to tho proper method of dealing with tha capital and property of lliecal trusts. Theae deieiona susisst tha need and wisdom of additional or uppUmentol lelo , latloa to make It eastsr for tha enure Dual ' neea community ta square with the rule or action and Issallty thua finally eetabiiehed and ta prasorv tha benefit, freedom and (par ef reasonable eompoUtloa without loaa kf real efficiency or proa-rasa. X Chans B KaU of Ewctaloa. ! Tha a'.atuta IB Ita flrrt aectton dselarse fa be lllecal -orery eootrart. comMnatlon . In tha form of truat or otherwise, or consplr , acy In restraint of trade or commerce among - tho several atatea or with forelcn nation. and la the aecond. declareo sui:tr of mls demeanor -eety peraon who shall monop . ollao or attempt to monopollie or combine " or conaplro with any other peraon to monop olize any part of tha trade or commerce of tho eevsral atatea or with foreign natlonn. ) t- eerie raeea. where the atatuta was Invoked to enjoin a transportation rata acreement between Interetate rallaoad com pen lea. It waa held that It waa no defenee . to ahow that tha aareement aa to ratea com B.alned of waa reasonable at common law, hernuee It waa aald that tha atatuta waa dlrected acalnst all eontracts and combiner " tiona la restraint of trade whether Mesons. V tie at common law or not It waa plain from tho record, howeeer. that the cn- tracta comp:atned of In those caaea would rot bare been deemed reasonable at com f rnon law. In subsequent caaea the court said that the atatuta should bo given a reasona ble construction and refused to Include with in Its inhibition certain contractual re- , itralnte at trade which It denominated aa Incidental or aa Indirect. . Tbeea caaea of reetralnt of trade that tha - court excepted from the operation of tho tatute were Instances which, at common law. would hare been called reasonable. In , the Standard Oil and tobacco cases, there fore, tha court merely adopted the tests of tha common law. and la defining exceptions to tho literal application of the statute, amy aubetltuted for the test of being Incidental or Indirect, that of being reasonable, and thla. without varylne In the sllahteet the B'-tual score and effect of tho atatuta. la " other word, all the rases under the atatuta which bare bow been decided would hare been decided the same way If the court had originally accepted la Ita construction lb rule at common Law. It haa been said that the court, by Intro ducing Into the construction of the statute common-law distinctions), haa emasculats4 It. Thla la obrlously untrue. My Ita Judg ment every contract and combination In re etralnt of tateretaie trade maJe with tho Kiimiiia Ae na-arv effat of eontrolltn prtree by atlf'.tng competition, or ef eatab- ' Iishlng In wno; or In part a monopoly or such trade, la condemned by the statute. The moat extreme crltlca cannot Instance a rs.ee that ought I be condemned un1er the statute which la not brought within Ita lerme aa tboe construed. The augcestton la also made that tha supreme Court by Ita decision ta the laat Iwa caaea baa corralltted to the court th andeflaed and unlimited discretion to de termine whether s case of restraint of trade ta within tha term of tho atatuta. Thta la wholly untrue. A reasonable re straint of trade at common law ta well un derstood aad la clearly defined. It doe not reat la th dlecrettoa of tho court- It must bo limited to accomplish the purpose of a lawful mala contract to which. In or der that It shall be enforceable at all. It must b Incidental. If It exceed th needa af that contract. It la void. The toot af reasonableness waa never ap plied by the court at common law to con . tracta or combinations or conspiracies In restraint of trade whoso purpose was or whose necessary effect would bo to atlflo competition, to control prices, or establish monopolies. Tho courts never assumed pow er to say that surh contracts or romblna tlono or conspiracies might be lawful If tha partlee to them were only moderate In tho use of tho power thua secured and did not exact from the public too great and exorbi tant prices- It Is true that many theorists, and other engaged In business violating the atatuta. have hoped that soma such lino could bo drawn by courts: but no court of authority has ever attempted It. Certainly there la nothing In tho decisions of the latest two caaea from which such a dangsroua theory of Judicial discretion In enforcing thla atatuta can derive the slightest sanction. Fare af Statute Matter ef Growth. We have been 21 yeara making thla atat uta effective for the purposes for which It waa cted. The Knight case waa dla- couraglng and seemed to remit to tho atatea tho whole available power to attack and auppreaa the evils of the trusts. Vlow ly, however, tho error of that Judgment waa corrected, and only In the last three or four years haa tho heavy band of th law been laid upon the great Illegal com binations that have exercised such an ab solute dominion over many of our Indus tries. Criminal' prosecutions have been brought and a number are pending, but Jurlea have felt averse to convicting for Jail sentences, and Judges have been moat reluctant to Impose such sentences on meg of respectable standing In society whose erfsuae haa bee a, regarded aa merely statu tory. Still, aa the offense becomes better understood and the committing of It par takes more of atudled and deliberate de fiance of tha law. we can be confident that Jurlea will corn-let Individuals and that Jail sentences will be tmpoeed. Remedy la Equity by Plaaohuloa. In tho Standard Oil raae tha Supreme arid Circuit Courts found tho combination to be a monopoly of the Interstate bualneaa of refining, transporting and marketing petrole um and Ita products, effected and main tained tbrongh 87 different corporations, the stock of which waa held by a New Jersey company. In effect It commanded tha dis solution of this combination, directed the transfer aad pro rata distribution by the New Jersey company of tha etock held by It -tn tha 37 corporations to and among Its stockholders; and the corporations and Individual defendanta were enjoined from conspiring or combining to restore such monopoly; and all agreement between the subsidiary corpor ations tending to produce or bring about - further violations of the act were enjoined, la the tobacco case, the court found that the Individual defendant, tweaty-nln ta ' number, bad been engaged tn a successful effort to acquire complete dominion over -the manufacture, sals and distribution of tobacco In this country and abroad, and that thta had beea done bv combinations made with n purpoe and affect to atlflo compe tition, control prices, and eetabUah B mo nopoly, not only In the manufacture of to bacco, but also of tin-foil and llcorfco used In Its manufacture and of Ita products of cigar, cigarettea and anuffa. The tobacco autt presented a far more complicated and difficult case than tha Standard Oil sujt for a decree which would effectuate the will of the court and end the violation of tha atat uta. - There waa here bo single holding com pany aa In the case of the Staadard OH Trust. The main company waa the American Tobacco Company, a manufacturing, selling and aotdlcg company. The plan adopted to destroy the combination and restore com petition Involved the redlvlalon of the capl- , tal aad plant ef th whole truat between font sf ths eompanlea constituting th trust and new eompanlea organised for tho L Jrorpoeee of tha decree and made partlee ta It, and numbering, now and old. fourteen. It esdj sated Sirustlsa Described. Th American Tobacco Company old. readjusted capital. f92.0uO.00O: the Liggett A Meyers Tobacco Company (new), capital fsT.ouO.OUO: the P. Lorillard Company (aew. capital. 47.0O0.0OO: aad the R. J. Reynolds Tobacco Company (old), capital. 7.&Aa.0v0, are ehlefly engaged la th guana- LATE PORTRAIT OF THE PRESIDENT, WHO SENDS MES SAGE TO CONGRESS ON ANTI-TRUST LAW. t r- : . ... v- I " , . : ... v r - - ,- ; - a f !,' . S ! e "'- ". - - ;:!. -4 v : V ;-.r--v' ': -; ,. :: : v -v; v :' - a,- t -e- fact ure and gale of chewing and emoklng tobacco and cigars. Tha former one tln-foll company la divided Into two, one of 0"0 capital and the other of t-4-0X The one sr.uff company Is divided Into three companies, one with a capital of flft. 00.000. another with a capital of ".oeo. CK0. and a third with a capital of f'.OOO.OOO. The licorice eompanlea are two. one with a capital or $3. T5s 8i0 and another with a capital of I2.0O0.imhi. There la. alao, the Iirltiah-Ameriran Tobacco Company, a Brit ish corporation, doing business abroad with a capital) of f 2.000.0n; the Porto Rlcan Tobacco Company, with a capital of el.c. 0OO, and the corporation of United Cigar Stores, with a capital of Is.OreD.ooO. Under this arrangemsnt. each of the dif ferent kinds of business will bo dlstrlbutsd between two or more companies with a division of the prominent brauds In the earn a tobacco producta. so as to make competition not only possible but necessary. Thua tho smoking tobacco buslnees of tho country Is divided so that the present Independent companies have SI 39 per cent, while the American Tobacco Company will have as of per cent, the Liggett A Meyers 10. OS per cent, tha Lorillard Company S2.P2 per cent, and tha Reynolds Company 2.M per cent. The stock of th other IS eompanlea, both preferred and common, has been taken from the defendant American Tobacco Com pany and haa been distributed among Its stockholders. AH covenant restricting com petition have been declared lull and fur ther performance of them has been snjolned. The preferred stock of ths different eompa nlea has now been given voting power which was denied It under the old organisation. The ratio of th preferred stock to the com mon was 71 to '. This constitutes a very decided change In the character of tha ownership) and control of each company. In tha original suit there were 29 de fendanta who were charged with being tho conspirators through whom the Illegal com bination acquired and exercised Its unlaw ful dominion. Under the decree these de fendanta will hold amounts of stock In th various distributive eompanlea ranging from 41 per cent as a maximum to S&S Pr cent aa a minimum, except IB the case of on sma'.l company, tha Porto Rlcan Tobacc Company. In which they will hold 5 per cent. The 29 individual defendants ara en Joined for three yeara from buying any stock except from each other, and the group Is thus prevented from extending Its control during that period. All parties to the suit, and th new companies who ara mad par ties, are snjolned perpetually from In any way effecting any comblnatloB between any of the eompanlea In violation or tho statute by way of resumption of the old trust. Ears of tho 14 eompanlea la snjolned from acquir. Ing stock In any of th others. All these companies ara snjolnsd from having com mon directors officers, or common buying or selling agent, or common offices, or lending money to each other. Objection waa made by certain Independ ent tobacco companies that this settlement was unjit because It left companies with very large capital In active business, and that the settlement that would be effecttv to put all on an equality would be a division of the capital and plant of the trust Into small fractions In amount more nearly equal to that of each of the Independent eompa nlea This contention results from B mis understanding of th anti-trust law and Its purpose. It Is not Intended thereby to prevent tho accumulation of larg capital In business enterprises in which such a com bination can secure reduced cost of produc tion, sale and distribution. It Is directed against such an aggregation of capital only when Its purpose is that of stifling compe tition, enhancing or controlling price and establishing a monopoly. If ws shall have by the aecres defeated these purpose and restored competition between the large units Into which the capital and plant have been divided, we ahall have accomplished the use. ful purpose of ths statute. Cocirlacalloa Not Purpose. It Is not the purpose of the statut to con fiscate the property and capital of tha of fending trusts. Methods of punishment by fine or Imprisonment of th Individual of fenders, by fine of ths corporation or by for feiture of Its goods In transportation, are provided, but tho proceeding In equity Is B speclflo remedy to stop tho operation of th truat by injunction and prevent the future use of the plan and capital In violation of th statut. I venture to say that not' In th history of American law has a decree more effec tive for such purpose bsea entered by a court than that against the tobacco trust. As Circuit Judgs Noyss said tn hla Judgment approving tha decree: The extent to which It has been Boceo eary to tear apart this combination, aad fore H fr.to view forms eV.th the attendant burdens ought to demon at rat that tha Fed eral anti-trust statute Is a drssjc statute which accomplishes effective results; which ao long aa It stands on th statute hooka must be obeyed, and which can not be dis obeyed without Incurring far-reaching pen alties. And. on the other hand, the sue ceesfuj reconstruction of this organlxatloa s.iould teach that the effect of enforcing thla statute Is not to destroy, but to reconstruct; not to demolish, but lo rf -cress la accord ance with the conditions which the Congress haa declared shall sxlst among the people of the United States." rssjiiusa fllnrh Ownership et Meases. It has been assumed that th present pro rata and common ownership In all these companies by former atockholdera of the trust wou'd Insure a continuance of the eame old single control of all the eompanlea Into which' the treat has by decree been dis integrated. This Is erroneous and la baaed upon assumed Inerflcacy and Innocuouanees of Judicial Injunction Tha eompanlea are enjoined from eo-operatloa or eombtnatloai they have different manager. director purchasing and sale agents. IX ail ar many Photo Copyright by O. Prince. WILLIAM HOWARD TAFT. of tha numerous stockholder, reaohtng Into the thousands, attempt to secure concerted notion of the eompanlea with a view to the- rontrol of the market, their number Is so large that auch an attempt could not well bo concealed, and Ita prime movers and all Its participants would be at once subject to contempt proceedings and Imprisonment of a summary character. The Immediate result of ths pressnt situation will necessarily be activity by all the companies under differ ent managers, and then competition must follow, or there will be activity by one com pany and stagnation by another. Only a short time will Inevitably lead to a change In ownership of the atock. aa all opportunity for oontlnuet co-operation muat disappear. Those crltlca who speak of this disinte gration In the truat as a mere chango of garmenta have not given eonalderatlon to the inevitable working of the decree and understand little the personal danger of at tempting to evade or set at naught the sol emn Injunction of a court whose object la made plain by the decree and whose inhlbl tlona are act forth with a detail and com prehensiveness unexampled In the history of equity Jurlsprudsnce. Voluntary Rcorgmnlrstlons at Hand. Th affect of these two decisions haa led to decrees dissolving thh combination of manufacturers of lectrlo lamps, a Southern wholesale grocers' association, an Interlocu tory decree against tha powder trust with directions by tho Circuit Court compelling dissolution, and other, comblnatlona of a sim ilar hletory are now negotiating with the Department of Justlcs looking to a disinte gration by decree and reorganisation In so oordance with law. It seems possible to bring about there reorganlsatlona without general business dlsturbsnce. - But now that the antl-truat act la seen to ba effeotlre for the aooompllshment of tha purpoae of Its enactment, we are met by a cry from many different quartera for Its repeal. It Is said to be obstructive of busi ness progress, to be an attempt to restore old-fashioned methoda of deatructlvs compe tlon between small units, and to make Im posstble those useful combinations of capital and the reduction of the cost of production that are essential to continued prosperity and normal growth. Mora Hum ess "o Sin, In th recent decisions the Supreme Court makes clear that there is nothing In the statute which condemns combinations of capital or mere bigness of plant organised to occur economy In production and a re duction of Its cost. It Is only when the purpose or necesssry effect of the orttsnlza tlon and maintenance of the combination or- the aggregation of Immense slxo are the stifling of competition, actuar and potential, and the enhancing of prices and establishing a monopoly, that tho statute is violated. Mere size Is no sin against tho law. The merging of two or more business plants nec essarily eliminates competition between the units thus combined, but this elimination Is la contravention of the statute only when th combination is msd for purpose of end ing thla particular competition in order tn secure control of. and enhance, prices and create a monopoly. Tho complaint la made of the statute that It la not sufficiently definite tn Its de scription of that which Is forblddsn to en able . business msn to avoid Its violation. The suggestion Is, that we may have a .combination of two corporations, which may run on for year, and that subsequently the Attorney-Oeneral may conolude that It was a violation of tho statute, and that which was supposed by the combiners to be Innooent then turns out to be a combina tion In violation of the statute. The an swer to this hypothetical case la that when men attempt to amass such stupendous cap ital aa will enable them to suppress compe tition, control prices and establish a mo nopoly, they know the purposs of their acts. EXTRACTS FROM MESSAGE DEFINING ADMINISTRATION'S ATTITUDE TOWARD CORPORA TIONS AND THE PREVENTION OF MONOPOLIES. "Ths test of reasonableness wae never applied by the court at common law to contracts or combinations or conspiracies In restraint of trade whose purpose was or whose necessary effect would be to stifle competi tion, to control prices, or establish monopolies. The courts never assumed power to say that such contraots or combinations or conspiracies might be lawful if the parties to them were only moderate In the use of the power thua secured and did not exact from the publlo too great and exorbitant prices. It is true that many theorleits. and others engaged In business violating; the statute, have hoped that some such line could be drawn by courts; but no court of authority has ever attempted It. Certainly there Is nothing In the decisions of the latest two cases from which such a dangerous theory of Judicial discretion in enforcing this statute can de rive the slightest sanction." ... ...... "Juries have felt averse to convicting for Jail sentences, and judges have been most reluctant to Impose such (Jail) sentences on men of respectable standing In society whose offense has been regarded as merely statutory. Still, aa the offense becomes better understod and the oommlttlng of it partakes more of studied and deliberate defiance of the law, we can be confident that Juries will convict Individuals and that Jail sentences will be Imposed." ... . . .... . . "It Is not the purpoae of the eitatvte to confiscate the property and capital of the offendlna; trusts. Meth ods of punishment by fine or Imprisonment of the Individual offenders, by find of the corporation or by for feiture of Its goods In transportation, are provided, but the proceeding In equity la a speclflo remedy to stop the operation of the trust by Injunction and prevent the future use of the plant and capital In violation of the statute." ... "Mere elze Is no sin against the law. The merging of two or more business plants necessarily eliminates competition between the units thus combined, but this elimination Is In contravention of th statute only when the combination Is made for the purpose of ending this particular competition in order to secure con trol of. and enhance, prices and create a monopoly." "I gee no objection and Indeed I can eee decided advantages In the enactment of a law which shall de scribe and denounce methods of competition which are unfair and are badges of the unlawful purpose de nounced In the antl-truat law." . "The antl-truat act Is the expression of the effort of a freedom-loving people to preserve equality of op portunity It 1 the result of the confident determination of such a people to maintain their future growth by preserving uncontrolled and unrestricted the enterprise of the Individual, his Industry, his Ingenuity, hla intelligence, and his Independent courage." ... . "It Is said that the act has not done good. Can this be said In the face of the effect of the Northern Securities decree? That decree was In no way eo drastic or lnhibltlve In deta.ll as either the Standard Oil decree or the Tobacco decree: but did It not stop for all time the then powerful movement toward the con trol of all the railroads of the country In a single hand 7" Men do not do such a thing without having It clearly In mind. If what they do la merely for tha purpose of reducing the coat of production, without tho thought of sup pressing competition by uaa of the bigness uf th plant they ara creating, then they cannot be convicted at th time the union ta made, nor can they ba convicted later, unless It happen that later on they conclude to suppress competition and take tho usual methods for doing so. and thua establish for themselves a monopoly. They can. In such a ease, hardly complain If the motive which ubeequently Is disclosed Is attributed by the court to th original combination, yew Remedies Stigrrested. Much Is aatd of th repeal of thla statute and of constructive legislation Intended to accomplish the purpose and blaxe a clear path for honest merchant and business msn to follow. It may be that suoh a plan will be evolved, but I submit that tha discus sion which hav been brought out in re cent day by th fear of tho continued exe cution of tho anti-trust law have produced nothing but glittering generalities and hav offered no line of distinction or rule of no tion as definite and as clear as that which ths Supreme Court Itself lays down In en forcing the statute. I see no objection and Indeed I can see decided advantagee In the enactment of a law .which shall desortbe and denounce methods of competition which are unfair and ar bodges of th unlawful purpose de nonucsd in tho antl-truat law. Tho attempt and purpose to suppress a competitor by underselling him at a price so unprofitable as to drive him out of business, or the mak ing of exclusive contracts with customer under which they ar required to give an association with other manufacturers, and numerous kindred methods for stifling com petition and effecting monopoly, should be described with sufficient aoenracy In a crim inal statute on the one hand to anabl th Government to shorten Its task by prosecut ing single misdemeanor Instead of aa entire conspiracy, and. on the other hand, to serve th purpose of pointing out more In detail to tha buslnees oommunlty what must be avoided. Federal' Incorporation Recommended. In a special message to Congress on Janu ary T. 1910, I ventured to point out the dis turbance to business that would probably attend the dissolution of thee offending trusts. I said: liut such an Investigation and possible prosecution of corporations whoso prosperity or destruction affects the comfort not only of stockholders, but of millions of wage earners, employes, and associated tradesmen must necessarily tsnd to disturb the confl denc of th business community, to dry up the now flowing sources of capital from Its plaoes of hoarding, and produce a halt In our present prosperity that will cause suf fering and strained circumstances among the Innocent many for the fault of the guilty few. The question which I wish In this message to bring olearly to th consid eration and dlacusslon of Congress Is whether. In order to avoid such a possible bualneaa danger, something cannot be done by which these buslnees combinations may be offered a means, without great financial disturbance, of changing the character, or ganisation and extent of their bualneaa Into one within the lines of the law under Fed eral control and supervision, securing com pliance with the anti-trust statute. "Generally. In the Industrial combinations called -trusts.' the principal business Is the sale of goods In many states and in for eign markets; In other words, the Interstate and foreign business far exceeds the busi ness done In any one state. This fact will Justify the Federal Government In granting a Federal charter to such a combination to make and sell In Interstate and foreign commerce tho products of useful manufac ture under such limitations as will secure a compliance with the anti-trust law. It Is pos-lble so to frame a statute that while It offers protection to a Federal company against harmful, vexatious and unnecessary Invasion by the states. It shall subject It to reasonable taxation and control by the state with respeot to Ita purely local busi ness. . "Corporations organised under this act should be prohibited from acquiring and holding stock In other corporations (except for special reasons, upon approval by the proper Federal authority), thus avoiding tho creation under National ausploee of the holding company with subordinate corpora tions In different states, which has been such an effective agency In the creation of the great trusts and monopolies. If th prohibition of th anti-trust act against combinations In restraint of trad la to be effectively enforced. It is essential that the National Government shall pro vlds for the creation of National corpora tions to carry on a legitimate '" throughout the United States. Tho con flicting laws of th different elates of the Union with respect to foreign corporations make It difficult. If not impossible, for on corporation to comply with their require ment so as to carry on business In a num ber ot different statss." I renew the recommendation of the enact ment of s general law providing for th voluntary formation or corporations to esse In treae ana commerce .iwus ths states and with foreign natlona Every argu- ment which was then advanced for "" ; law. and every explanation which was at h.. t!m offered to possible objections, have been confirmed by our experience since the enforcement of the anti-trust statute ba re sulted In the actual dissolution of active oommerclal organisation It la even more manifest now than It waa then that the denunciation of conspiracies In restraint of trade should not hnd does not mean ths denial of organisations largo snough to be Intrusted with our Interstate and foreign trade. It has been made more clear now than It was then that a purely negative statute like the anti-trust law may well be supplemsnted by speclfle provisions for the building up and regulation of legiti mate National and foreign commerce. Administrative Expert Needed. The drafting of th decrees In the dissolu tion of tho present trusts, with a view to their reorganisation Into legitimate corpo rations, has made It especially apparent that the court are not provided with tho administrative machinery to make the neo essary Inquiries preparatory to reorganisa tion, or to pursue such Inquiries, and they should b empowered to Invoke the aid of the nureau -of Corporations In determining the suitable reorgantiatlon of the disinte grated parte. The Circuit Court and the Attorney-General were greatly aided in framing the decre In th tobacco trust dis solution by an expert from the Bureau ot Corporatlona Corporation Commission PropoaeO. I do not set forth In detail the terms and sections ot a statute which might supply the constructive legislation permitting and aiding the formation of combination of cap ital Into Federal corporations. They should bs subject to rigid rules as to thslr organ isation and procedure. Including effective publicity, and to the closest supervision as to the Issue of stork and bonds by an exe cutive bureau or commission In the Depart ment of Commerce and Labor, to which In times of doubt they might well submit their pruposed plana for futuro business. It must bo distinctly understood that Incorporation under a Federal law could not exempt the company thus formed and Its Incorporator and managers from prosecution under th anti-trust law for subsequent Illegal con- POINTS MADE BY PRESIDENT IN HIS MESSAGE DEALING WITH TRUSTS AND THEIR REGULATION. Declaring; that the Standard Oil and Tobacco Trust decision weta -epoch-maklns." tho President says that tho decreeB therein entered, furnished useful precedents, and at the same time ugrnested the neea and wiedom of supplementary legislation. It Is declared to be "obviously untrue" that tho court emasoulatea the anti-trust statute by Introducing- common law distinctions. The most extreme critics," says Mr. Taft, "cannot Instance a caee that ought to be condemned under the statute that Is not condemned under Its provisions." , The force and effectiveness of the statute have been a matter oi gTOwth. Errors of Judgment have been Blowly correoted. The decree dissolving the Tobaoco Trust Is declared to be without superior for accomplishing the purpose Intended. , . The effect of the Supreme Court decisions in the Standard Oil ana Tobacco Trust cases has led to decrees dissolving the combination manufacturing electric lamps, and the Southern Wholesale Grocers As sociation, besides an Interlocutory deoree dissolving the Powder Trust. Other combinations are In process of disintegration. The demand from some Quarters for the repeal of the Sherman law Is reviewed. The President says that recent decisions have made clear that there Is nothing in tho statute which condemns mere blneas of plant organized to secure economy of production and a reduction of Answering a hypothetical question, Mr. Taft saya that when men attempt to amass auch stupendous capital as will enable them to con trol prices, suppress competition and establish a monopoly, they know the purpose of their acts. They oannot complain If these motives are dlsolosed later In the progress of the combination, even If they were not convinced when, in the earlier stages. It appeared that their first motives were harmless. There would be decided advantage in the enaotment of a law to de scribe and denounce methods of competition which are unfair and are ' badges of unlawful purpose." Voluntary Federal Incorporation of conoerna engaged In interstate and foreign trade is suggested again. In this connection the Presi dent quotes from his special message of January 7, 1810, on the same ,UbThet"courta are In need of administrative expert advice In drafting the decrees of dissolution, and should be empowered to Invoke tho aid of the Bureau of Corporations for that purpose. A Federal corporation commission Is proposed. The President reiterates that only supplementary constructive leg islation is needed. The present anti-trust law. thua reinforced. It Is declared, will be sufficient. The Northern Securities decision is declared to be evidence that the Sherman act has done good. That decree, says the President, has stopped for all time the then powerful movement toward the con trol of all the railroad of the country In a single hand. duot, but the publicity of Ita procedure and the opportunity for frequent consultation with tho bureau or commission In charge oi tho incorporation a. to the leg pur pose of Its transactions would offer It as great security against successful P'oa"." tlons for violations of the las a would be oractlcal or wise. Such a bureau or commission might wen be Invested also with the duty l"a, .re ferred to. ot aiding courts In the dissolution and re-creation of trusts within the law. It should be an executive tribunal of the dignity and power of th Comptroller of the Currency or tho Interstate Commerce Com mission, which now exercise supervisory pow er over Important classes of corporations un der Federal regulation. ,. Tho drafting of such a Federal Incorpora tion law would offer ample opportunity to prevent many manifest evils In corporate management today. Including Irresponsibility of control In the hand of th few who ar not th real owners. Incorporation to Be Voluntary. I recommend that tho Federal charters thua to bo granted shall be voluntary, at least until experience Justifies mandatory provisions. The benefit to be derived from tho operation of great businesses under the protection of. such a charter would attract all who ars anxious to keep within the lines of the law. Other large combinations that fall to take advantage of the Federal Incorporation will not have a right to com plain If their failure la ascribed to unwllllng neaa to submit tholr transactlona to the careful scrutiny, competent eupervlslon and publicity attendant upon ths snjoyment of such a charter. The opportunity thus suggested for Federal l..n.n,.r.tlnn It SCSmS tO mL I SUltBbl constructive legislation needed to facilitate tho squaring of great Industrial enterprises to the Tulo of action laid down by the anti trust law. This statute as construed by the Supreme Court must continue to be tho line of distinction ior muuu uu. k- enforced unless we are to banlsn Individualism from all bualness and reduce It to one common system of regulation or control of prices like that which now pre val's with respect to publlo utilities, and which when applied to all business would be a long step toward state sooiaiism. Anti-Trust Act Important. The anti-trust act Is the expression of th L treedom-lovlng people t I arv equality of opportunity. It Is t confident determination o to pre- the re sult of the confident determination of aucn a people to maintain their future growtn by preserving uncontrolled and unrestrloted the ntsrnrlse of tho Individual, his Industry, hrs Ingenuity, his IntsHlgenca, and his In itnnrint eouraaa. For twenty years or more thla statute haa bsen upon the statut book. All knew its aeneral purpose and approved. Many rf ita vioiatora were cynical over Its as sumed Importance. It seemed Impossible of enforcement. Blowly the mills of the courts ground, and only gradually did th majesty of the law assert Itself. Many of It statesmen-authors died before It became a living force, and they and others saw the evil grow which they had hoped to destroy. Now its efficacy la seen; now iib power .ict, . j , now Its oblect is near achievement. Now we hear the call for Its repeal on the plea that It Interferes with business prosperity, and we are advised In most general terms, how by some other statute and In some other way the evil we are Just stamping out can be cured. If wo only abandon this work of twenty yeara and try another experiment for another term of years. It Is said that the act ha not done good. Can thla b said in th face of the effect of tho Northern Securities decreet That de cree was in no war so drastlo or lnhlbltlv In detail as either th Standard OH decree or the tobacco decree; but did It not stop for all time the then powerful movement to ward the control of all the rallroada of tho country In a single handT Buch a one-man power could not have been a healthful in fluence In the Republic, even though exer cised under the general supervision of an Interstate Commission. Do wo deslr to make such ruthless com binations and monopolies lawful? Wflen all energlea are directed, not toward the reduction of tho cost of production for the publlo benefit by a healthful competition, but toward new ways and means for making permanent In a few hands the absolute con trol of the conditions and prices prevailing In the whole field of Industry, then Individ ual enterprise and effort will be paralyzed and the spirit of commercial freedom will b dead. WM. K. TAFT. The White Houae, December 5. 1911. Messago Declares Supplementary, Regulation of Corporations and MESSAGE IS ILL LIKED VIEWS APPROVED BY LEADERS OX BOTH SIDES. Strength of Position Conceded, but Democrats Wanted to Put Tariff to Front. WASHINGTON, Dec 6. President Taf f s message on trusts ,was read in both branches of Congress today and was generally well received. The Pres ident's objection to a repeal of the Sher man law was approved by some of the leaders on both sides, although the Democrats held that his first message should have dealt with the tariff. Democratic Leader Underwood said the President and the Administration were trying to overshadow the tariff with trust issues. "The message is an able one from the President's standpoint," Mr. Underwood said, but we feel that the leading mes sage should have dealt with the tariff. There seems to be an effort on the part of the President and the Admlnls tratlon to force trust Issues ahead.. I am opposed to a repeal of the Sherman law, but there may be supplemental legislation to define It I think the Houbs does not favor a Federal lncor poratlon act" Speaker Clark said he could not dls cuss the message until he had atudled It thoroughly. Republican Leader Mann, who has not always agreed with the President, praised the message. "It Is probably the strongest utter ance President Taft has ever made. he said. "It shows that he Is on the side of the people; that he Is not con trolled by the trusts and that he does not wish to cause undue violence to proper combinations of oapltal." In the House the reading of the mes sage was Interrupted by applause from the Republican side. The Senate received the reading of the message with Its usual dignified attention. EXCLUSION ACT URGED CALIFORNIA SOLOX SAYS WEST IS WEARY OF YELIfOW MEN'. Legislator Would See Congress Keep Japs, Koreans and Asiatics From Shores of United States. SACRAMENTO, Cal., Deo. 5. Sena tor Banford, of Mendocino County, who Introduced a radical Asiatic exclusion resolution at the regular session of the Legislature, brought the subject before the Senate again today in a resolution in which the California members of Congress are urged to use all their Influences toward the pas sage of a law excluding "Japanese, Koreans and Asiatics," except certi fied students and travelers." Congress Is asked to pass the ex clusion bill now before It, "and to give notice to the world that America has at last the determination to protect her own people from the shiftless hordes that have been continually dumped upon her shores." "The people of the Paclflo Coast have become weary and disgusted," says the resolution, "with the unpatrl otlo and un-American manner In which those in high authority at Washington have been handling the Immigration question by truckling and kowtowing to the Mikado of Japan and other for eign powers, whose underslrable sub jects are becoming more ajid more a menace to American institutions. FAIR DIRECTORS ELECTED Stockholders of Greeham Exposition Preparing for Next Year. ORE SHAM, Or Deo. 5. (Special.) Fifteen directors were elected yester day by the stockholders of the Grange Fair Association, to serve for the next year. The list follows: Lewis Shat tuck, R. M. Gill, E. G. Kardell. J. W. Townsend, R, P. Rasmussen. E. L. Thorpe, Theodore Brugger, T. R. Howltt, H. A. Lewis, W. A. Prootor. D. M. Roberts, Charles Cleveland, A. F. Miller, E. a Jenne, J. H. Lake. The board of directors will meet January 8 for organization and election of offi cers. On motion of A. F. Miller another meeting of the stockholders will be held on call of the president to con sider a change In name for the asso ciation, It is proposed to give It the new title of Multnomah County Fair Constructive Statute -Would Make Prevention of Monopoly Complete. Association as being broader and more distinctive. It Is planned to have a better fair In 1912 than ever before, and to that end an effort will be made to Issue the new premium list as early as February. Superintendents for all the depart ments will be named early In the year with Instructions to get busy in the several months that will Intervene be fore the next annual fair. MALHEUR COURT UPHELD State Supreme Legal Body Passes on Various Cases. SALEM," Or, Dec. E. (Special.) The Supreme Court upheld the court of Mal heur County, Dalton Briggs, Judge, to day, in an opinion by Justice Moore, when It affirmed the appeal from the Circuit Court in its writ of review from the Recorder's Court of Vale as to whether T. A. Barton spld Intoxicating liquor without a license. The case had peculiar features. A liquor license for Vale was sold to the highest bidder for 15000 and then an ordlnanoe passed providing for such li cense, when the Mayor was absent and the President of the Council was in charge. Later the Mayor, upon his re-" turn, vetoed the ordinance granting the license. Barton was found guilty of Belling liquor without a license. Other opinions of the Supreme Court today were as follows: Jesse T. Purdy vs. Judson H. Vankeu ren, appealed from Grant County, George B. Davis, Judjre: affirmed In an opinion by Justice McBrlde. This was an action to recover for labor and services. United States National Bank of Vale vs. First Trust & Pavings Bank of Brogan. ap pealed from Malheur County. Dalton Brlggs Judge; reversed and remanded in an opinion by Justice Bean. This was an action to re cover on two Inland bills of exchange. Pacific Livestock Company vs. Jasper Da vis et aL, appealed from Harney County. George B. Davis Judge; modified In an opin ion by Justice Moore. This was a suit to enjoin Interference with a flow ot water. MIDDLEMAN, HEARS DOOM Speaker at Farmers' Union at Pen dleton Says Utility Is Past, PENDLETON, Or., Dec. 6. (Special.) "The middleman has been of infinite benefit to the farmer in the past, but times have changed and' the middleman must die, because he has outlived his usefulness," declared W. P. Davis, of Union County, In addressing the state meeting of the Farmers' Educational and Co-operative Union of America here this afternoon. He also made a strong plea for a closer alliance and Stronger co-operation on the part of the farmers. National President C. S. Barrett, of Georgia, did not arrive in time for to day's sessions, but Is expected to be here tomorrow morning. This evening the 260 farmers and their wives who are present from va rious sections of the state are tha guests of the Pendleton union and the Commercial Association at a banquet. Homesteaders Get Patents. 6ALEM, Or., Deo. 5. (Special.) W. C. Hawley. Representative In Con gress, today received advices from the Commissioner of the General Land Of fice that patents had been issued to M. B. Fitzpatrlck, of Gold Beach, and Reuben Lyon, of North Bend, involv ing their homestead entries. These were cases in which the entrymen had experienced considerable difficulty with contests. Mr. Hawley has been active In assisting homesteaders whom he regarded as acting in good faith and has a number of other cases pend ing at thlstlme. Mr. Hawley left for Washington, D. C, tonight. Try This Famous Pinex "Pint of Cough Syrup" A Family Supply for 50c, Saving $2. Ths Surest, Quickest Remedy You Ever Used or Money Refunded. A cough remedy that saves you $2, and is guaranteed to give quicker, better re sults than anything else, is surely worth trying. And one trial will show you why Pinex Is used in more homes in the U. S. and Canada than any other couzh remedy. You will be pleasantly surprised by the way it takes right hold of a cough, giving almost Instant relief. It will usually stop the most obstinate, deep-seated cough in 24 hours, and is unequalled for prompt results in whooping cough. A 60-cent bottle of Pinex, when mixed with home-made sugar syrup, makes a full pint of the best cough remedy ever used. Easily prepared in five minutes direc tions in package. The taste is pleasant rhildren take It willingly. Stimulates the appetite and is slightly laxative both excellent features. Splendid for croup, hoarseness, asthma, bronchitis and other throat troubles, and a highly successful remedy for incipient lung troubles. Pinex is a special and highly concen trated compound of Norway White Pine extract, rich in gualacol and other natu ral healing pine elements. Simply mix with sugar syrup or strained honey, in a pint bottle, and it is ready for use. Pinex has often been imitated, but never successfully, for nothing else will produce the same results. The genuine is guaranteed to give absolute satisfaction or money refunded. Certificate of guar antee is wrapped in each package. Your druggist has Pinex or will gladly get it for you. If not, send to The Pinex Co., Ft. Wayne, Ind. Pinex Is fully guaranteed by Laue Davls Drug Co. (distributers). Portland. MAKE YOUR OWN , HAIR TONIC A SPECIALISTS ADVICE. Tn rrvnnt tssuA the New York Herald published a special article on the care of the hair. In which was trtven the formula for a home-made Hair Tonlo. which wai highly recommended for Its remarkable hair-Krowing properties, aa well a for stopping falling hair, revitalizing the hair roots, aestrovms; me uanuruu "r'" nt. restorlriK gray hair to its natural oolor. This article was of special Interest to me, as the formula was one which I myself have prescribed In countless cases with most astonishing results. I remember one case In particular in which I prescribed it for a man who had been bald for many years and In les. than two months after he began its use his head was completely covered with a luxuriant growth of rich, glossy hair, tnus proving that hair can be made to grow oa a bald head, notwithstanding the opinion of many persons to the contrary. For the benefit of those who have not seen It before, I give the formula herewith: 0 ounces of Bay Rum. 2 ounces Lavona de Composee, one-half drachm Menthol Crys tals. Dissolve the Crystals in the Bay Rum and then add the Lavona de Composee ; shake thoroughly and apply night and morn. Ing to the roots of the hair, rubbing into the scalp with the finger-tips. This prepa ration contains no coloring matter, but re stores giay hair to Its natural color by its action on the hair roots. If you desire it perfumed, add one teaspoonful of To-Kalon Perfume, which combines perfectly with the other Ingredients and Imparts a most pleas ing soeat- A A t V