the post office, and we believe that more than equal severity and skill should be expected of the Department of Justice in enforcing the law against those men than would be expected in the enforcement of the law against the man who robbed the post office or counterfeited the coin, because they do more damage. Every citizen of the United States has suffered almost incalculable injury in the aggregate from the operation of these conspiracies known as trusts, and the injury has been so great that no remedy is too drastic at the present time, and yet the Attorney General, in a late case, has said that he thought some of the civil remedies were too drastic to be applied to a concern that was conducting business in so extreme a manner and which justified such stern language as the Supreme Court used against the tobacco people. It seems to me that no civil remedy is too drastic to use against men who were as guilty as they

were.

Senator POMERENE. My questions were inspired by the suggestions which were made here awhile ago by one of the Senators who did not want to be put in the attitude of criticizing the Department of Justice. I want to be put on record as saying that I regard its course in its failure to enforce those provisions as most reprehensible. Mr. MARTIN. Well, we are living in hopes that the Attorney Gencral will get more active in respect to the criminal clause of it. Senator POMERENE. So am I.

Senator NEWLANDS. I had not in view at all the criminal side of the law. I was referring simply to civil prosecutions.

Senator POMERENE. It has been reasonably diligent in that respect. Referring now to the Standard Oil Co., I have not seen the provisions of the decree which has been entered

Senator CUMMINS. That decree has not been entered.
Senator ToWNSEND. It is the Tobacco Trust.

Senator POMERENE. Well, the Tobacco Trust. Are you able to advise us whether or not the affairs of the component parts of the American Tobacco Co. Trust will be administered by the same officials who have managed and conducted the affairs of the American Tobacco Co. prior to the entering of the decree?

Mr. MARTIN. I believe that the provision is that the officials shall be separate, but that is all immaterial; it is not of great importance because of the fact that the common-stock holders will, in all probability, as far as we can see from the plan, be the controlling power in all three of the companies, and taking even the 27 guilty commonstock holders who were condemned by the Supreme Court of the United States, there would be enough of them to divide up as separate directors of these three companies and acquire absolute control if they saw fit. There is nothing in the record to show how much of the preferred stock has now been given voting power that these same common-stock holders own. Our belief, based on what we think is good evidence, is that the common-stock holders, who are the conspirators who erected the Tobacco Trust conspiracy in violation of the law and operated it, and whose attorneys, and who themselves originated and invented this plan-that the Circuit Court of New York accepted-certainly did not invent a plan to hang themselves. They invented the plan, we are absolutely confident from what we know of their record and characteristics, so as to perpetuate their

control, and we believe that there ought to be a very thorough exposure of the real facts in regard to that matter before that decree is completed and made effective; and we appeal now to the Senate and to the Congress as a whole to aid in turning the light on that subject, because it is a very dangerous precedent that may be established if something is not done to show what the facts are.

Senator POMERENE. Assuming that the decree of the court dissolves this trust and sanctions a reorganization into the several component parts as now contemplated, and afterwards there should be a connivance between the officials of these several component parts in the way of a "gentleman's agreement," or something of that character, in your judgment would it be easier or more difficult to obtain conviction under indictments for violation of the criminal provisions of the Sherman antitrust law?

Mr. MARTIN. Well, that is a question that I do not know that I could answer offhand, but we fear that there might be added difficulties.

Senator POMERENE. Can there be any doubt about that?

Mr. MARTIN. Although the Attorney General assured Mr. Schulteis, our counsel, and myself, when we called on him day before yesterday, that he felt very confident that relief would be given by this decree, and it would be easier to rectify the troubles in the future, and that the control slipped through the hands of the common-stock holders, we are unable yet to accept that view of the situation, because we do not get any facts that warrant us in believing it. I, however, do not desire to condemn the opinion of the Attorney General. Undoubtedly he is familiar with the terms of the decree, which I am not. It may be that the decree is a Christmas stocking, and there are some good prices for the people in the decree when it comes out. I hope so. He seemed to speak with great confidence that there were. I hope that I shall be greatly disappointed. Until it does come out we are still in doubt.

Senator POMERENE. The Supreme Court, in substance, found in passing upon the American Tobacco case that that corporation had notoriously violated the Sherman antitrust law ever since the date of its first existence and continuously. Do you know any reason under the statutes why the Department of Justice should be devoting itself to an effort to help this trust which has so violated this lawgetting its house in order-rather than to enforce the criminal provisions of the statute, when it has been found by the highest court in the land that that statute has been thus violated?

Mr. MARTIN. Our opinion was, and our earnest desire was, that the Attorney General and the Department of Justice should proceed at once, and with criminal proceedings pass upon the facts already in their possession, and on the opinion of the Supreme Court they would at once proceed with criminal prosecution and at once apply the drastic remedies of the civil section. I do not believe it was the intention of the framers of the antitrust law, and our counsel advised that they do not believe it was the intention of the framers of the antitrust law, that the Department of Justice should assist in reconstructing a new trust or two or three new trusts out of the remains of the old one. Our belief is, and we are advised by counsel that the plain intent of the law was, that when a trust was condemned it

should then be deprived of all of the instrumentalities and would be made invalid, and all the papers, documents, contracts, stocks and bonds, and everything else which represented the conspiracy would become invalid, and they should be left in possession of the physical properties except what was taken from them in fines or seized in transit, and they should be left with their property to do business in accordance with the terms of the law, and if they did not do business in the future in accordance with the law they did it at the peril of summary proceedings in the way of contempt proceedings on the part of the Department of Justice and also other remedies that might be invoked; that instead of the Government bothering itself with the business of constructing a business organization these men should be left with the freedom to go on with their business in accordance with law, and if they did not do it they acted at their own peril.

Senator POMERENE. Now, I want to take up another branch of this matter. In your testimony, both in chief and in cross-examination, you have spoken with special reference to the Sherman antitrust law. As I understand it, the primary purpose of this inquiry was to consider Senator Newlands's bill with reference to the formation of a commission whose duty it would be to regulate industrial corporations engaged in interstate traffic, similar to the control the Interstate Commerce Commission has over railroads. What is your judgment as to the feasibility of legislation of that character?

Mr. MARTIN. I believe it is impracticable and impossible to give effect to. I do not believe that it is humanly possible, mentally possible, morally possible, or governmentally possible for a commission to do the things that I will not say are exclusively in the bill proposed by the Senator from Nevada, but that are embodied in most of the propositions for an industrial commission to regulate the interstate industrial corporations, the same as the Interstate Commerce Commission does with railroads, because the great essential thing is that the Interstate Commerce Commission regulates the prices or charges for transportation. It has regulative control over that. You can not confer that on a commission in regard to the prices of commodities. I would not say that I do not believe it is constitutional, but I have my doubts about it. I believe that it is absolutely impracticable, and a commission without that power would be of no force or effect.

The Commissioner of Corporations, as I stated in my first statement to the committee, was created under the Bureau of Corporations law. It was one that originated with ex-Congressman Phillips, of Pennsylvania, and myself, and we intended with that law to create a department and a commissioner of corporations who should have the power to supervise the operations of the interstate-commerce corporations and concerns, with a view to exposing their operations to the knowledge of the public, of Congress, and of the Department of Justice at least; that he should have powers equivalent to those of a bank examiner or a comptroller of currency over national banks; that if the commissioner of corporations suspected, as he might well do, that the Standard Oil Trust or the Steel Trust was violating the law he would have a right to go down, under the authority of the United States Government, to their offices and say, "Gentlemen, open up. What are you doing? Are you violating the laws of the United States? Let us see your books and your contracts and your railroad rebates, advise others of all these things,"

and in that way he would be able to quickly and readily expose to the public eye the secret conspiracies on which the trusts are built. He would be able to put before Congress the data upon which they may legislate further, if necessary. He would be a very valuable assistant to the restoration of free and fair competition and to the destruction of monopolies simply because he would uncover the facts, and then the executive officers and courts could do whatever was necessary to put an end to this practice already condemned by law.

That was our idea in that matter. The law was not regarded as complete, and we desire and we hope that the present Congress will improve it in that direction, and I think in that way I perhaps meet the views of the Senator from Iowa.

That is one of the things we are in favor of, but it would be additional legislation, regulative of commerce and of commodities, without directly amending the antitrust law. It would be of great assistance to the efficiency of the law without directly amending it and involving a new interpretation by the courts.

Now, there is one amendment to that Bureau of Corporations law that I overlooked, and I beg the indulgence of the committee if I suggest that we believe that this ought to be done at once by Congress. The Bureau of Corporations law ought to be amended so that the commissioner will make all of his reports to Congress as well as to the President. That was in the former bill as we had it originally drawn, and it was dropped out by some legerdemain-I do not know how.

We believe, and I have the right to say, that there was streng influence brought to bear. The trusts were very much opposed to the creation of that commission and the provision that the Commissioner of Corporations should report both to Congress and to the President as to the facts that he got. It was dropped out and he was directed to report only to the President. The press of the country hailed the bureau when it was first created as a bureau of publicity. There was more demand for publicity than a tax on corporations and trusts, and that was what we wanted to make it—a bureau of publicity, but it had not been in existence a month before every newspaper man in the country was making a howl that it was a bureau of secrecy; that you could get less information from the Bureau of Corporations than from any bureau of the Government, and that is literally true and has been ever since. The commissioner even defied the committee of Congress last summer in refusing to give information, and yet they paid hundreds of thousands of dollars to get that information on matters of importance, and pressing importance. I think that is a thing that ought to be rectified at once. I think this committee should recommend, and the Senate and House should adopt an amendment providing that the commissioner should make all of his reports at once to Congress as well as to the President, and every bit of information should be just as accessible to Congress as to the President.

Senator POMERENE. You expressed a doubt as to the authority of the Government to control the prices, and I recognize that that is a grave question. Suppose that it should develop that there is a given industrial combination whose primary purpose in combining was to advance and control the prices of their output. What objection would there be, in the event of a combination of that kind, to

provide by statute that after that combination, then the price of the commodities of that combination should be subject to governmental control?

Mr. MARTIN. I should object to that. I do not believe it is any province of the Government to fix the price of commodities under any circumstances.

Senator POMERENE. Ordinarily, I agree with you.

Mr. MARTIN. It is a step, and a very great step, toward socialism, which I am utterly and absolutely opposed to. I believe in individualism. I believe in the largest liberties to the individual, in commerce as well as in anything else, if it is done with equal liberty, and the great objection that we have to the trusts is that they arrogate to themselves special privileges which were formerly the common right of all.

Senator POMERENE. That thought was suggested to me in a talk with a Congressman from Ohio some days ago, and I wanted your views on it. I think that is all I care to ask, Mr. Chairman.

The CHAIRMAN. Mr. Townsend, you may inquire.

Senator TOWNSEND. Mr. Martin, as I understand it, you are in favor of competition?

Mr. MARTIN. Yes, sir.

Senator TOWNSEND. Are you also in favor of the production of goods at the lowest price possible; in other words, do you believe that all of the possible economies of manufacture or production should be employed if they could be?

Mr. MARTIN. In everything except if some manufacturer conceives the idea that the enslavement of his laborers would assist in economizing. I would oppose that. Some of them have that mistaken notion that they can. I do not believe that they can.

Senator POMERENE. We will make that exception. Outside of that, do you believe that all of these economies should be employed? Do you agree with the gentleman from Minnesota that the large monopolist has the advantage over his competitor by reason of the fact that he can produce more cheaply even at the same wage?

Mr. MARTIN. If you mean by a larger manufacturer one of the great trusts, I do not believe they can manufacture cheaper than a competitor. I am sure that the Steel Corporation can not manufacture steel and pay dividends on their watered stock of $6 a ton, and I am sure the Standard Oil Trust can not manufacture oil as cheap as the independent. It is the inherent vice of all the great trusts that they are so burdened with the machinery of their organization and their great mass of watered stock and other expenditures that are not proper to the economical production and distribution of wealth that they are handicapped. The only way they succeed is by criminal collusion with the railroads, banks, and other quasi public instrumentalities in which they usurp to themselves parts of the sovereignty of the Government to aid in crushing the competitors. Senator ToWNSEND. So that the independent competitor does not suffer except because of certain privileges or advantages which the competitors receive from public-service corporations, etc.!

Mr. MARTIN. Exactly.

Senator TOWNSEND. Now, you propose to reach that in one of these bills, as I understand it here, a bill introduced by Mr. Stanley! Mr. MARTIN. Yes, sir.