National Civic Federation Attempts to Amend the Law
For many years the National Civic Federation has been collecting data bearing upon the trust and labor problem. In 1899 it held a trust conference; and again, in October, 1907, it called a large meeting at Chicago for the consideration of the trust situation. Delegates appointed by the governors of forty-two States and representatives of more than ninety commercial, agricultural, and labor organizations contributed to these discussions. Referring to these Chicago proceedings, Mr. Theodore Marburg, one of the participants, said before the Judiciary Committee in Washington last winter: "Mr. Nicholas Murray Butler sounded the note of attack upon the Sherman Anti-trust Law.... I take it that the gentlemen will agree with me that it was a dominant note of that conference." As a result, a bill radically amending the Sherman Anti-trust Act was introduced in Congress at the last session. Its most active sponsors in Washington were Seth Low, president of the National Civic Federation, Professor Jeremiah W. Jenks of Cornell, and Samuel Gompers, president of the Federation of Labor. Well-known men who had participated in the conference that preceded the framing of the bill were E. H. Gary, chairman of the Board of the United States Steel Corporation, Henry L. Higginson, Isaac N. Seligman, and James Speyer and August Belmont, bankers. Francis Lynde Stetson, chief counsel for the United States Steel Corporation and other Morgan corporations, and Victor Morawetz, counsel for the Santa Fé Railroad, wrote the drafts. This latter fact was publicly stated by Mr. Low and Mr. Jenks in the course of the hearings before the Judiciary Committee. The authorship of the bill was early brought out in the following colloquy between Congressman Charles E. Littlefield and Mr. Low:
Mr. Littlefield: Right there, Mr. Low, if there is no objection, who are the people that actually participated in the preparation of the bill? Who are the men who actually drew it?
Mr. Low: We conferred with Judge Gary, of the United States Steel Corporation.
Mr. Littlefield: E. H. Gary, president of their board of directors?
Mr. Low: E. H. Gary. The lawyers actually engaged in the drafting of the bill were Mr. Stetson——
Mr. Littlefield: That is, Francis Lynde Stetson?
Mr. Low: Francis Lynde Stetson; and Mr. Morawetz.
Mr. Littlefield: Victor Morawetz?
Mr. Low: Victor Morawetz.
At another time, Mr. Low described Mr. Stetson and Mr. Morawetz as "the drafters" of the bill. Herbert Knox Smith, commissioner of corporations, also had a hand in framing the measure. President Roosevelt openly indorsed it and sent in an emergency message urging, among other things, its passage. Extensive hearings, extending through several months, were held before the Judiciary Committee. Many representatives of capital and labor appeared in favor of the measure. Although Congressman Littlefield, who presided over these hearings, many times expressed his wish to examine Mr. Stetson and Mr. Morawetz, these gentlemen never appeared. Although Mr. Low promised that they would submit a brief, explaining several disputed legal points, they never did so. The burden of discussing the many intricate legal points that constantly arose rested entirely upon the shoulders of Mr. Low and Professor Jenks, neither of whom had had any legal training. Through the efforts of Congressman Littlefield, James A. Emery, counsel for the National Association for Industrial Defense, and Daniel Davenport, counsel for the Anti-Boycott Association, the proposed law was defeated, but the proceedings are of great interest and importance as illustrating the changes desired by both labor and capital in the present anti-trust law.
Gompers Asks that the Boycott be Legalized
Mr. Gompers' demands were entirely simple and direct. He wished labor unions entirely exempted from the operations of the Sherman Act. That law, if properly respected and enforced, would practically put an end to Mr. Gompers' occupation. Referring lately in a public speech to the effect of a recent court decision against inter-State boycotts, Mr. Gompers quoted, as applicable to his own organization, Shylock's speech in "The Merchant of Venice," "You might as well take from me my life as take from me the means whereby I live." Mr. Gompers' chief interest in the Civic Federation bill, therefore, was a clause which specifically declared that the Anti-trust Act should not be so interpreted "as to interfere with or restrict any right of employees to strike for any cause or to combine or to contract with each other or with employers for the purpose of peaceably obtaining from employers satisfactory terms of their labor or satisfactory conditions of employment." Mr. Low and Mr. Jenks denied that this language legalized the boycott; Congressman Littlefield, however, and many other opponents of the measure, emphatically asserted that it did. Such sweeping concessions as "to strike for any cause" and "to combine or to contract with each other or with employers for the purpose of peaceably obtaining from employers satisfactory terms," it was maintained, clearly authorized such boycotts as that prosecuted against the Danbury Hatters. That proceeding, it was pointed out, was entirely peaceable—there was no law-breaking, no rioting, no bloodshed. It would also legalize, it was said, many of those arrangements between labor unions and employers—by which employers' associations contract to employ only members of certain labor unions, the latter, on their part, contracting to work only for certain employers—which were brought to such perfection by the late Sam Parks. Mr. Gompers demanded that, if the clause in question did not authorize boycotts, another should be substituted which did; to make the case sure, therefore, he proposed an amendment which did so in no uncertain tone. The following extract from the record clearly defines Mr. Gompers' position:
Mr. Littlefield: Now, Mr. Gompers, a word. Would this amendment you suggest, if it became a law, authorize the prosecution of such a boycott as was attempted in the Danbury Hatters' case, which was in violation of the Sherman Anti-trust Law? Is that the purpose?
Mr. Gompers: One of the purposes; yes, sir. That case was brought under the Sherman Anti-trust Law.
Mr. Littlefield: Yes. And the purpose of the amendment you have offered is to relieve you from the operation of the Sherman Anti-trust Law as construed by the court in that case?
Mr. Gompers: Yes, sir.
Mr. Littlefield: And to authorize that kind of an inter-State boycott?
Mr. Gompers: Yes, sir.
Mr. Littlefield: Do you, as the representative of organized labor, favor the boycott, both as an inter-State and a local proposition?
Mr. Gompers: I do, sir.
Mr. Littlefield: And your organization stands for that?
Mr. Gompers: It does, sir.[K]
Government to Discriminate Between Good and Bad Trusts
As to monopolistic corporations, the proposed act placed them entirely under the supervision of the executive branch of the government. If you wished to form a trust, or enter into a restraining contract, and, at the same time, to escape the prohibition of the Sherman Act, you would first, under the provision of this bill, submit the proposed arrangement to the Commissioner of Corporations and answer such questions as he saw fit to ask. If he gave approval, you could go ahead and carry out the deal, practically secure against further interference. If he disapproved, you would be liable to attack under the Sherman Act. In fact, the administration was to be given arbitrary power to discriminate between good and bad trusts, to separate the corporation sheep from the corporation goats. "You are all right," it could say to one combination; "you are all wrong," it could say to another. The federal government, in other words, was to rule absolutely the business activities of nearly 80,000,000 of people; merely by a word it could authorize a gigantic combination like the United States Steel Company, and prohibit another like the Standard Oil.