CHAPTER V.

LABOR AND CAPITAL-THEIR RELATION TO EACH OTHER—

THE TRUSTS

The Republican party had its origin in the demand that labor should be free and not slave. It has been the friend of labor throughout its existence. It has enacted more legislation for the benefit of the wageearner than any other party that ever had control of the government. Its great doctrine since the civil war has been protection to the labor of this country against the pauper labor of other lands. It has by protective legislation maintained a higher scale of wages in this country than has ever prevailed in any other country. It has followed the doctrine that the prosperity of the country depended on the prosperity, intelligence and independence of the wage-earner, and it has written that doctrine in hundreds of pages of the statutes.

While defending and advocating the cause of labor, the Republican party has not believed in the destruction of all organization of capital because in this age of combination for the building of railroads and other great enterprises for the common benefit of the people, the corporation was the only form of organization which could provide the capital to carry forward the work. The organization of labor and the organization of capital have run along parallel lines and both have had the protection of the Republican party. To-day they stand as the two great influences in this country as in every other civilized country. But the greater the growth and development of each the nearer have they come to agreement upon scientific wage scales and agreements as to business management.

Notwithstanding the apparent benefits from combinations of capital, in increased wages and cheapened products, the Republican party has from the beginning of trust organizations sought a way to control them and prohibit combinations and conspiracies for the restraint of trade. President Harrison took hold of this question with vigor in his first annual message to the 51st Congress in December, 1889, urging the attention of that Congress to the consideration of the question how far the restraint of trusts is matter for Federal jurisdiction. 'Acting upon President Harrison's recommendations the 51st Congress, Republican in

both House and Senate, enacted the Sherman anti-trust law which was signed by the President. This law declared illegal every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, and it provided penalties. This action taken by a Republican President and a Republican Congress clearly indicated the policy of the Republican party in attempting to restrain capital from forming combinations or trusts in restraint of trade. That the act was not equal to the purpose was not the fault of Congress or the administrative officers. President Cleveland in discussing the same subject in his last annual message to Congress in December, 1896, testified to this by saying that while the insufficiencies of the existing laws should be remedied by further legislation, if it could be done, the fact must be recognized that all Federal legislation on this subject must fall short of its purpose because of inherent obstacles and also because of the complex character of our governmental system, which, while making the Federal authority supreme within its sphere, has carefully limited that sphere by metes and bounds that cannot be transgressed. Mr. Cleveland added: "The decision of our highest court on this precise question renders it quite doubtful whether the evils of trusts and monopolies can be adequately treated through Federal action unless they seek directly and purposely to include in their objects transportation or intercourse between States or between the United States, and foreign countries."

९

This confession of President Cleveland at the close of his administration was the more significant because of his attitude in the beginning of that term when he thought that destruction of the protective system would destroy the trusts. The trust flourished and developed under the Democratic administration and under the Wilson tariff as they had under a Republican administration and the McKinley law. The Wilson free trade law severely crippled all ordinary business and threw labor out of employment, but it did not harm or hinder the trusts which continued to pay their usual dividends to stockholders. This was a good demonstration of the fact that the trusts were not fostered by a protective tariff, nor injured by free trade. It was this condition which was met by the present Republican administration. The tariff could not af fect the trusts, but President McKinley and the Republican Congress believed that ordinary and legitimate business could be revived by a return to the protective system, and the first act of the Republican party on

its return to power was to enact the Dingley tariff law. The party had pledged itself to do this and by doing it the wheels of industry were again started and labor employed. Then came the war with Spain, during which Congress devoted its energies to equipping the government for war, and then settling the results of the war.

But with those questions out of the way and domestic affairs again presented for action, President McKinley in his last annual message earnestly recommended some further legislation amending and making effective the anti-trust laws. The House addressed its efforts to this work and not only passed a stringent amendment to the Sherman act, but the Republican managers also presented a constitutional amendment which failed of the necessary two-thirds vote because the Democrats voted almost solidly against it.

The Democrats denounce the trusts as "hydra-headed monsters" and "octopusses." Their warfare on trusts has been like their warfare on the "Robber Tariff Barons," a war of denunciation, not a practical warfare for their regulation or their suppression. The legislation on this subject belongs solely to the Republican party. William McKinley as Chairman of the Committee on Platform in the National Republican Convention of 1888, presented the first anti-trust resolution adopted as an article of political faith. That resolution adopted by the Republican National Convention of 1888 was as follows:

"We declare our opposition to all combinations of capital organized in trusts or otherwise to control arbitrarily the conditions of trade. among our citizens; and we recommend to Congress and the State Legislatures, in their respective jurisdictions, such legislation as will prevent the execution of all schemes to oppress the people by undue charges on their supplies, or by unjust rates for the transportation of their products to market. We approve the legislation by Congress to prevent alike unjust burdens and unfair discrimination between the States."

That resolution, written in 1888, is still a part of the Republican doctrine. It needed no reiteration in 1892 and 1896 because Republicans were striving to carry it into effect in Congress, in the State Legislatures and in the courts.

President Harrison took his stand on this plank in his first annual message to Congress, December 3, 1889. He said:

"Earnest attention should be given by Congress to a consideration.

of the question how far the restraint of these combinations of capital commonly called "trusts" is a matter of Federal jurisdiction. When organized, as they often are, to crush out all healthy competition and to monopolize the production for sale of an article of commerce and general necessity, they are dangerous conspiracies against the public good, and should be made the subject of prohibitory and even penal legislation."

The first bill introduced in the Senate of the Fifty-first Congress was that which became the "anti-trust law" by John Sherman of Ohio. It was passed and became a law on July 2, 1890. It was carefully drawn and carefully considered by the able lawyers in both Houses of Congress, and it was believed that it would be effective. Throughout the consideration of the bill the members of the Democratic party criticised, obstructed and ridiculed it at every stage of its progress. The motives of the author were impugned and the Democrats declared their opposi tion to it and promised effective anti-trust legislation when they should come into power. But notwithstanding their opposition to the Sherman bill, they all voted for it, and when they came into power they forgot their pledges and rested on the Republican anti-trust legislation. In 1900 history is simply repeating itself. A Republican Congress has sought to amend the Sherman act to make it more effective, and also to amend the Constitution so as to give Congress greater powers. The Democrats excused their opposition to both these efforts in Congress by denunciation of trusts in their platform and on the stump and in the press.

President McKinley has not forgotten the Republican platform he wrote twelve years ago. Two years ago he recommended and Congress created an Industrial Commission to investigate this and kindred questions. The report of that Commission, not yet completed, will be an exhaustive discussion of this question, with the testimony of trust magnates, capitalists, business men, and labor leaders. But President McKinley did not wait for the result of this investigation. In his last an nual message to Congress he said:

"It is universally conceded that combinations which engross or control the market of any particular kind of merchandise or commodity necessary to the general community, by suppressing natural and ordinary competition, whereby prices are unduly enhanced to the general consumer, are obnoxious not only to the common law but also to the

public welfare. There must be a remedy for the evils involved in such organizations. If the present law can be extended more certainly to control or check these monopolies or trusts, it should be done without delay. Whatever power Congress possesses over this most important subject should be promptly ascertained and asserted."

The first session of the Fifty-sixth Congress was a busy one with great questions before it. One of these was legislation to regulate and control the trusts.

Two measures were proposed by the Republicans. The first was an amendment to the Constitution. This was as follows:

ARTICLE XVI.

Section 1. All powers conferred by this article shall extend to the several States, the Territories, the District of Columbia, and all territory under the sovereignty and subject to the jurisdiction of the United States.

Sec. 2. Congress shall have power to define, regulate, control, prohibit, or dissolve trusts, monopolies, or combinations, whether existing in the form of a corporation or otherwise.

The several States may continue to exercise such power in any manner not in conflict with the laws of the United States.

Sec. 3. Congress shall have power to enforce the provisions of this article by appropriate legislation.

The other measure was a bill to amend the Sherman Anti-Trust Law to make it more effective than it has proven in the last ten years. The Sherman Law, passed July 2, 1890, was entitled "An act to prohibit trade and commerce against unlawful restraints and monopolies." The law contains eight sections.

Section 1 declares to be illegal "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States or with foreign nations." A penalty of not exceeding $5,000, or imprisonment of not exceeding one year, is fixed for the violation of this section.

Section 2 fixes a similar penalty for "every person who shall monopolize or attempt to monopolize or combine or conspire with any person or persons to monopolize any part of the trade or commerce among the several States or with foreign nations."