« PreviousContinue »
Elihu Root and other constitutional lawyers took the view that Congress would not be required by this amendment to levy on such bonds, and would not be likely to do so; moreover, that the courts, following long precedent, would in all probability forbid such taxation.
The affirmative vote of 36 States is necessary for adoption, and, up to December of 1912, 34 States had voted in the affirmative, 4 had refused to ratify and the others had taken no action or only partial action.
But interest in the tariff as well as in other public measures was for a time diverted by a deplorable controversy that arose over conservation policies. This grew out of an attack made upon Secretary Ballinger regarding his relations to certain alleged fraudulent claims for mineral properties in Alaska. After the gold discoveries, this terra incognita was populated by thousands of fortune hunters, towns of considerable importance sprung up, and a more efficient system of administration was organized. The occupancy of the gold fields directed attention toward other mineral products, in search of which Alaska had been thoroughly explored, with the resultant discovery that it was as rich in other natural resources as in the more precious metals. Copper, coal, iron and other mineral deposits were found in abundance, and the “ interests ” quietly began to absorb enormous tracts through the operations of the land-grant laws. As
each applicant under the homestead law could obtain only 160 acres, and, under the law supervising mineral lands, could purchase only a certain maximum amount, it was the policy of unscrupulous men to obtain vastly more land than the law allowed by dummy entries and fraudulent claims.
The most active of these exploiters were alleged to be the Guggenheims who already had virtual control of the copper industry of Colorado. The charges against Secretary Ballinger were made public by a special agent of the Federal government, Lewis R. Glavis, who asserted that certain socalled " Cunningham claims" were fraudulent, and were in reality a part of an organized effort of the Guggenheims to obtain control of the most valuable mineral deposits of Alaska. Mr. Glavis alleged that not only was the Secretary of the Interior aware of the nature of these claims through knowledge gained by him when commissioner of the land office, but that he had been instrumental in furthering them. Glavis submitted his charges to Attorney-General Wickersham and, as a result, was deposed from his position by order of the President, who made a statement to the effect that he had full knowledge of Mr. Ballinger's acts and had utmost confidence in his integrity. This action was soon followed by a summary dismissal of Gifford Pinchot, Chief Forester, who, in a letter to Senator Dolliver, had rather broadly intimated that the President was somewhat mistaken as
to his facts. As a result of the charges movement of the Administration in of Mr. Glavis, a joint committee was opposition to the trusts was the proseappointed by Congress to look into cution of the American Sugar Refinthe affair. After a protracted investi- ing Company. There were two disgation lasting more than a year, tinct lines of government procedure. a report was rendered by this joint One was to recover damages in a suit committee through its chairman, Sen- brought by the Pennsylvania Sugar ator Nelson, fully exonerating Secre- Refining Company for the closing of tary Ballinger, thus settling the “ Bal- its plant by the larger concern. Setlinger-Pinchot controversy” and es- tlement was made out of court, but the tablishing the principle that public government used this settlement as a lands are not to be subjected to pri- basis of an indictment for fraud in vate exploitation. Another excellent violation of the criminal clause of the result of the acrimonious dispute was Sherman Law. The statute of limitato establish upon a firmer basis than tions was invoked by the defendants ever a wise and equitable policy of and upheld by the United States Cir“ conservation.” The opponents of cuit Court, an appeal from which was Mr. Ballinger, it should be remarked, immediately carried by the Governwere evidently actuated by over-zeal- ment to the Supreme Court. Another ous anxiety for the public welfare class of cases against the “ Sugar rather than by the extreme and harsh Trust grew out of frauds in the methods that President Taft de- weighing of imported sugar and also nounced as the weapons of the “ in paying duties on lower grades of scrupulous conspiracy.'
sugar than those that were actually On March 7 Mr. Ballinger resigned imported. In September, large sums his office as Secretary of the Interior, were paid to the Government by two with health impaired but no longer companies in the Trust as preliminary. " under fire," and Walter L. Fisher installments or settlement in full of of Illinois, was appointed his succes- all back shortages of duties on.sugar. sor. Later in the year the new Secre- Other policies became prominent. tary ordered the Cunningham claims A special message of President Taft cancelled, thus releasing the Alaska on January 7, 1910, made further mineral lands which these claims had regulation of railroads and certain sought to control.
modifications of existing anti-trust Aside from the corporation tax levy, laws the leading order of business for which, however, was not primarily the first regular session of the Sixtyan anti-trust measure, though it was First Congress — a message that has
destined to have an important bear- been pronounced worthy of “the
" ing on trust questions because of its highest place in his achievements as publicity features, the first important lawyer and statesman.”
The views of the President with re- This court was designed to review gard to railroad regulations were cases on which appeal should be made largely met in the Mann-Elkins bill, from the decisions of the Interstate finally passed after a long and notable Commerce Commission, in lieu of havdebate on June 18, 1910. It supple- ing them passed upon, as formerly, by ments the Hepburn Act of 1906 in the United States Circuit Courts. greatly enlarging the powers of the This was not only in the interests of Federal Government over railways, greater expedition but, it was hoped, and makes it much more difficult than of a more searching and painstaking heretofore for the railroads to conceal adjudication than the busier courts rebating from the Interstate Com- could make. Up to the close of 1911 merce Commission.
Among other the Commerce Court had rendered powers the Commission was granted decisions in 27 appeals from rulings, the right to suspend new tariffs for usually in favor of the railroads ten months, if necessary, while hear- against the shippers, and in only three ings were being held; and this pro- cases sustaining the original orders of vision was invoked when, shortly be- the Commission. A distinct hostility fore the passage of the Mann-Elkins against the court gradually grew up, Act, several Western roads increased and in 1912 only the utmost exertions their freight rates between all points, on the part of President Taft saved to take effect July 1. These tariffs it from being wiped out of existence were therefore suspended, and on by Congress. Other troubles culminFebruary 24, 1911, the decision was ated in 1912, when the House of Rephanded down refusing rate advances resentatives presented to the Senate on eastern and western roads, but articles of impeachment against one granting most of the increases asked of the judges of the court, Robert W. by southwestern roads. *
Archbald, for alleged business transThe creation of the Commerce actions with railroad companies at Court was one of the principal ad- times when the railroads were litivances made by the Mann-Elkins Act, gants before the Commerce Court and and one which the President had con
the Interstate Commerce Commission. sistently striven for from the first.
In accordance with another section Another important instance when this exten
of the Mann-Elkins Act the President, sion clause was put into operation was near the in 1910, appointed the Railroad Seend of the administration, the Interstate Commerce Commission on August 31, 1912, extending
curities Commission to decide whether until December 31, 1912, proposed increases in freight rates from eastern points to Pacific coast Interstate Commerce Commission, John E. Carpoints.
land, Robert W. Archbald, William H. Hunt and † The members of the Commerce Court were Julian W. Mack. The first public sesssion was Martin A. Knapp, formerly chairman of the held in Washington. D. C., on April 3, 1911.
VOL. X - 19
railway stock and bond issues could the provisions of the bill itself, were properly come under Federal regula- considered as a few among many hopetion.* The committee reported on De
ful indications of a much more reasoncember 11, 1911, that it would be prac- able spirit as regards the regulation tically impossible to do so, but made of industrial corporations — a weakseveral important suggestions for ening of the demand for ruthlessly amendments to the Interstate Com- “smashing big trusts.” In President merce Act, which should provide for
Taft's “Lincoln Day Speech " at giving the fullest publicity to every
New York, for instance (in which, by detail of railway financiering.
the way, he reiterated his “ best The second part of the President's
ever" characterization of the new
“ message of January 7 dealt with pro- tariff) he disclaimed“ all intention of posed modifications of the anti-trust pursuing the corporations in a hostile law. The message argued that large spirit.”
spirit.” The Administration's atticombinations of capital were not in
tude toward the whole trust question
made it more and more evident that trinsically unfair, yet it was necessary for judicial investigations to be insti. regulation and publicity, properly aptuted whenever suspicions of viola- plied, would be powerful factors in tions were aroused. This disturbance discriminating between lawful and un
. to business was to be deprecated and,
lawful combinations; and that was it was thought, could be eliminated if
one of the chief aims sought by the
Wickersham bill. the great concerns should subject themselves to Federal regulation
Prosecutions were continued during under the terms of a National incor- 1910 and the early part of 1911 against poration act. This would enable a line
the Sugar Trust, the meat packers, the to be drawn between trusts that had
Window Glass Trust, the Electrical nothing to conceal and those that em
Trust, and many others, but although, ployed unlawful methods — between
in nearly all cases, the Government adgood trusts” and “bad trusts.'
vanced inexorably toward the heart of A constructive bill was drawn by the
the citadel and no truce was called, yet Attorney-General, Mr. Wickersham,
the chances of final victory or defeat and presented to Congress, but formal
could not be accurately gauged until
the decision of the United States Sudebate on it was soon withdrawn pending the decision of the Supreme preme Court in the Standard Oil and Court in the Standard Oil and Tobacco
Tobacco Trust cases should be an
nounced. So momentous and far cases. This postponement, as well as
reaching were the consequences
of * The members of this commission
these decisions felt to be that a little Arthur T. Hadley, President of Yale University,
more detail must be ventured in reF. N. Judson, Frederick Strauss, Walter L. Fisher and Prof. B. H. Meyer.
counting the procedure and its effects.
In November of 1909, the United company to establish and maintain States circuit court at St. Paul, Minne- monopoly. sota, had declared the Standard Oil The decision was handed down on Company of New Jersey a" combina- May 15, 1911, written by Chief Justice
“ tion in restraint of trade" and there- White and concurred in by eight memfore illegal under the Sherman Act bers (vigorously dissented from, as not only a combination but a however, by Justice Harlan), the monopoly, the decree of the court crux of which was the now famous being an order for dissolution and an "rule of reason” principle that the injunction against the formation of Sherman Law should in each case any similar combinations. An appeal coming up for adjudication be given was taken by the company, in Decem- a “reasonable" interpretation. The ber of 1909, to the Supreme Court of Supreme Court, nevertheless, found the United States, alleging sixty-five the Standard Oil Company guilty of errors. The case was first argued in illegal combination, and ordered its March of the following year, but dissolution on September 1, 1911. owing to the death of Justice Brewer The order of the court was strictly and Chief Justice Fuller, the illness of obeyed, and on that date the StandJustice Moody, and the fact that Jus- ard Oil Company of New Jersey surtice Lurton had not been upon the rendered the ownership of the stock of bench when the first arguments were other oil companies. made, a reargument was heard in While the first effect upon business January of 1911.
men of the decision was optimistic, The principal contentions of the there was a feeling of doubt whether defence were, briefly, that the Stand- the dissolution actually dissolved, alard Oil Company was not a combina- though technically the law had been tion of subidiary rival companies but strictly complied with. There was a only a natural, simple evolution of an very general endorsement, too, of Jusexpanding industry, a private under- tice Harlan's view that "reasonable
“ taking that had a right to use trade interpretation " led, or might lead, to devices in advancing its interests, not emendations of legislative enactments a public service corporation that by means of the judicial construction would come under closer legal re- placed upon them, creating “ judgestrictions. The government, on the made law” that would “ in the long other hand, endeavored to show ob
run prove disastrous for our political vious “ intent" to secure restraint of system.” The uncertainty produced trade and monopoly, evidences being by the necessity of interpreting each found, it was alleged, in transportation particular case as it arose, rather than rebating, price discriminations, and by a general principle applying to all other unfair methods that enabled the
cases, was deprecated also, and it was