Mr. ANDERSON. The position in reference to restraint of trade is limited to what a corporation does, is it not? Mr. BORDERS. I think it is because the individuals, you understand, are not themselves engaged in the packing business, only as stockholders. Mr. ANDERSON. I see. Mr. BORDERS. I think that is correct, Mr. Anderson. Mr. ANDERSON. I was under the impression that that was not the case under the 1903 decree, but I do not find that here? Mr. BORDERS. You are mistaken about that. There are some individuals I heard you make that statement this morning. Nelson Morris, Edward Morris, Ira N. Morris, and I think F. E. Vogel, the brother-in-law of Nelson Morris, were made defendants, but that was because at that time they had no corporation; they were a partnership, doing business under the name of Nelson Morris & Co. Mr. ANDERSON. I think some of the officers of the corporation were also defendants in that case? Mr. BORDERS. I do not think so, Mr. Anderson. Now, as to the validity of the decree. I am going to cover this legal proposition pretty quickly, although I had intended to spend some time on it. Here is the basis of this proposition: Mr. McLaughlin of Michigan went into this, perhaps, as fully as any member of the committee. The theory of this decree is thisthat is, the consent feature of it-the law favors the settlement and the adjustment of matters in litigation. That is the first thought. And the law is based upon that theory-grounded on that basisthat when a matter is in litigation, is in court, and the court has jurisdiction of the subject matter and of the parties of course, there must always be that; there is no question about that here. The appearance of these defendants was entered, and it is to be ratified by the action of the board of directors of the different corporations, every one of them ratifying the entry of the appearance, so that the court had jurisdiction of the defendants and certainly had jurisdiction of the subject matter. And I make this statement, that whenever a court has jurisdiction of the subject matter and of the parties in a pending litigation, those parties can make any settlement they please. They can even go beyond the pleadings themselves, because the law favors settlement and adjustment of litigation; and when the parties stipulate a settlement, that is absolutely final and binding. Mr. ANDERSON. Yes. Is there no distinction in that regard between a suit which is between private citizens as individuals and as respect a suit between the Government and private individuals, where the public interest is primarily concerned? Mr. BORDERS. If there is, it would certainly be stronger in favor of the public interests than the rule between private individuals. If your point is good, it is favorable to the Government. Mr. ANDERSON. I think not, because that theory which you are now enunciating would permit the Attorney General to deprive the public of every right which it enjoys as a matter of legislation through a subsequent decree. Mr. BORDERS. Oh, no; the position of the Attorney General has been not that he is a part of the legislative branch of this Government; not at all. He has never taken that position; but on your theory as to what is in the power of the Attorney General to do, it is within the power of the Attorney General to settle and adjust any litigation involving the Government. He is the Attorney General; he is the chief law officer of the Government, the same as the States attorneys in the counties of the various States. But it does not militate against the legal proposition that some Attorney General sometime might make a bad settlement. That is what the argument amounts to. That can not affect the legal principles. Mr. ANDERSON. You went away beyond that and asserted that the Attorney General could make the settlement without regard to the law or the facts, whether the things enjoined were lawful or unlawful. Mr. BORDERS. Well, you understand, Mr. Anderson, it is one thing to say that a thing is unlawful and quite another thing to say that there is no law on a certain subject. Mr. ANDERSON. That is true. Mr. BORDERS. Well, that is this matter. Now, because there is no law to prohibit us from handling wholesale groceries does not make it unlawful. There is a clear distinction. Mr. VOIGT. Let me ask you a question, if you are through. Mr. ANDERSON. Just a moment. Of course, that is true; but legislatures may exercise their judgment upon the public policy as much by failing to legislate oftentimes as by legislating upon it. Mr. BORDERS. Oh, yes. But now, Mr. Anderson, if there is one thing that is settled in this country it is that we have three branches of the Government legislative, judicial, and executive each being separate and distinct, and neither can or should encroach upon the other. And there is not the slightest disposition on the part of the Attorney General or anybody else, as I understand it, to encroach upon, or attempt to dictate to, the legislative branch of the Government. Not at all. Mr. VOIGT. Unless the Attorney General was of the opinion the theory of this proposition was that the engaging in these lines was of a conspiracy or in a combination in restraint of trade, or its effect, if continued, would be a restraint of trade, he clearly had no moral right, if he had any legal right, to agree to this sort of a decree. Mr. BORDERS. I am addressing myself to the legal right, and I say unquestionably that he had the legal right. Mr. ANDERSON. So, I presume, he had on the theory that this whole thing was a part of a conspiracy or combination to control the food supply of the country. Mr. BORDERS. Not at all. Well, Mr. Anderson, I am sorry to hear you make a statement of that sort. There may be such a thing as a constructive settlement of a question that involves the interests of the people, and yet the constructive settlement of that question, even though it does not involve the interests of all the people, does not necessarily mean-I do not think infers that there is illegality on the part of the parties settling with the Government. In this case there is a provision in the decree, and it does not affect its validity at all, as I will show you by the authorities, that the decree does not adjudicate guilt on the part of defendants. Mr. ANDERSON. I am entirely in accord with that portion of the decree if it does what I assume it does, but I am not in accord with what I think this amounts to, and that is legislation by injunction. - Mr. BORDERS. Oh, well, that hardly hits the question to which I am addressing myself now. I am talking to the question as to whether this decree is legal and valid. Of course, if somebody wants to differ with the Attorney General, and, we differ in this world, and honestly, on a lot of questions-as to what should or should not be done, that is one thing. But I am saying that this decree is legal and valid. Mr. VOIGT. Mr. Borders, let me ask you a few questions at this point. You say, and I think every lawyer will agree with you, that if the court had jurisdiction of the subject matter and of the persons, it could sign about any sort of a decree? Mr. BORDERS. Yes, sir. Mr. VOIGT. Always bearing in mind that it did not exceed the jurisdiction of the subject matter. Now, suppose that the Attorney General had filed this bill and you had filed your answers, and you had both gone for trial before the court here in Washington; and suppose that the Attorney General had put in all the evidence which was furnished to him by the Federal Trade Commission and whatever else he could get, and suppose you had put in your side of the case. Then suppose that the court had stricken out practically all of your evidence and said that he would not take it into consideration but that he would give 100 per cent credence to the evidence produced by the Attorney General. Then the court could not have entered the decree which has been entered by consent, could it? Mr. BORDERS. Well, I think there are a lot of things the decree prevents which there is no law that would prevent us from doing. Mr. VOIGT: What I am getting at is, that if the court had found everything against you, it had found you were in conspiracy and it had found that you did this and did that and did everything that the Attorney General charged you with, the court could not have found any law under which to make this decree? Mr. BORDERS. Yes; but, Mr. Voigt, under a consent decree the parties who consent to do a great deal more than the court has jurisdiction to require. Now you can go beyond the pleading. Mr. VOIGT. You are anticipating my question? Mr. BORDERS. Well, that is what is in your question; it leads right to that point. Mr. VOIGT. Yes. You will agree with me that if the court had decided the case against you it could not have entered this decree? Mr. BORDERS. Well, of course, you had in mind the court could not enter the decree that one of the defendants, for instance, could hold stock in the stock yards; that is an illustration of your point? Mr. VOIGT. I am taking the decree as a whole. I admit that if the court had decided the case against you it could not have entered that decree? Mr. BORDERS. There are some things that the court could not have entered in a contested case. Mr. MCLAUGHLIN of Nebraska. It could not have entered any decree under the assumption Mr. Voigt states? Mr. BORDERS. No, that is not Mr. Voigt's question. His question is that it could not have entered this precise decree with everything that is in the decree; that it could not have done it. Mr. VOIGT. There is no doubt that what the court could have entered a decree restraining you from conspiracy under the AntiTrust Law? Mr. BORDERS. Yes, sir. Mr. VOIGT. But the point I am getting at is this: If the court had found all the facts against you, you think that the court could have made a decree divorcing you from the stockyards and divorcing you from the refrigerator car lines and divorcing you from ownership in stockyards and your distribution system? Mr. BORDERS. I will answer that just as the Attorney General did yesterday. The Government had got in this case, under this consent decree, a great deal more than it could have gotten under any contested decree. Now, answering your question directly, I do not think the court could have entered that decree; it could only have been entered by consent. Mr. VOIGT. That brings me to this question. Do you think that a court can enter a judgment or decree for which no law whatever exists? Mr. BORDERS. I certainly do; yes, sir. Mr. VOIGT. Well, now, does not a court derive all of its power from the law? Mr. BORDERS. Yes. But this decree is based upon the consent of the parties, and if you and I have a case in court we can go far beyond the pleadings, and you and I can go beyond what the court can do. We can make any agreement we please, just as the Supreme Court of the United States decided in the Ketcham case, that the Attorney General read. Mr. VOIGT. The question I want to ask you is: "Can the packers and the Attorney General confer jurisdiction?” Mr. BORDERS. Never in the world. Mr. VOIGT (continuing). Confer jurisdiction- Mr. VOIGT (continuing). On the part of the court which it does not possess? Mr. BORDERS. Never. The first thing we learn in studying law is that jurisdiction can not be conferred; but, of course, that does not touch this question. Mr. VOIGT. If you were to examine the judgment of a court and somebody who knows something about it, the first thing you would inquire would be this: "Under what terms of law did the court make this judgment?" Mr. BORDERS. If you will let me read the authority, if you have not studied this question, I think you will see it so that it will not be necessary to ask these questions. Mr. CANDLER. Let me suggest this: If you want to prevent people from doing anything there are two processes by which ot may be done. One by writs, and the other by prohibition? Mr. BORDERS. Yes, sir. Mr. CANDLER. Now, then, you do not have to always find a specific statute making a thing unlawful written by the legislative body of the Government or the State, to authorize you to prohibit the doing of a certain thing. The Attorney General of the United States, representing the Government, as stated-the Government is the people therefore he represents all the people? Mr. BORDERS. Yes. Mr. CANDLER. If the Attorney General determines that the statutes forbids certain things, and that then the general public policy of the Government forbids certain things or the general welfare of the people, or the public welfare, that would be an injury to all the people, could he not in a decree, following the unwritten law, which is the common law of the land handed down to us for generations, which forbids anything being done to the general injury of all the people would not that have been prohibited, too? Mr. BORDERS. I think so. Mr. CANDLER. Was it not the theory of this decree that certain things which were consented to, which are prohibited, were to the injury of the people, and therefore it has a right to be corrected? Mr. BORDERS. I think so. Mr. VOIGT. Mr. Borders, let me ask you this question: You stated this afternoon that you did not think Congress could pass any law divorcing you from these side lines or other enterprises because if Congress attempted such a thing the law would be unconstitutional? Mr. BORDERS. Yes, sir. Mr. VOIGT. Do I quote you correctly? Mr. BORDERS. Yes, sir. Mr. VOIGT. Now, how is it possible for the court here by a decree, to do what, in effect, is an unconstitutional thing? Mr. BORDERS. You fail to distinguish, evidently, between the judgment of the court where there is a clear distinction between the parties consenting to submit to the court a matter for adjudication and the parties themselves settling the thing and asking the court to enter it as a judgment. Now, the theory upon which a consent judgment or decree of the parties is enforced is entirely different from the theory of a judgment that results from the adjudication of the court itself. Mr. VOIGT. Can you cite a case where the court signed a decree for which there was no foundation in law? Mr. BORDERS. I do not say that there is no foundation in law. Simply because there is no statute on the subject does not necessarily mean that there is no foundation in law for it. I say that you and I can agree in a settlement of a lawsuit far beyond the powers or jurisdiction of the court and we can make a settlement that the Court has no authority to enter. Let me read to you the authorities on that. In the case of Clark v. Turnbull (47 New Jersey Law, 265; 54 American State Reports, 157): The law favors the compromise and settlement of controversies and litigations, and where a promise is made on the compromise of a doubtful claim, the compromise is a good consideration for the undertaking and the promise is binding. * * * But where legal proceedings have been instituted, an agreement in its compromise is good and valid regardless of the validity of the plaintiff's demand, and whether the suit could have been prosecuted to a successful issue or not. Citing a lot of authorities. Mr. VOIGT. That is a proposition of law on compromising a doubtful claim. Mr. BORDERS. Of course, the leading case on this is the Ketcham case that the Attorney General read, in the Supreme Court of the United States. In the case of Schmidt v. Oregon Gold Mining Co. (52 American State Reports, 759), I am not going to attempt to read all of these |