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čhan individuals, then the insertion, in line 19, after the word "criminal,” the phrase“ brought by the United States and.”

Now, as sections 15, 17, and 18 now stand, it is made a very easy matter for anyone who wishes to hold up a corporation for the purpose of blackmail or to injure them as competitors, to obtain some real damage of trifling amount, and to enter suit and compel the attendance of witnesses anywhere in the Union, and to any extent whatever. The costs of this sort of thing, of course, amount up very heavily, and if it were not for this situation of blackmailing that I speak of I doubt if anyone would object to the provisions. But taking the testimony by interrogatories should be substituted for the compulsory production of witnesses. I think thus a step forward would be made even if you would not go so far as to limit your suits to the Federal Government.

The last comment I have is in regard to section 19, “ That whenever a corporation violates any of the provisions of this act, the offense shall be deemed to be also that of the individual directors, officers, and agents of such corporation authorizing or ordering any of such prohibited acts,” etc.

Now, the act that is most frequently prohibited throughout this section is the act of doing interstate business. The corporation shall not do an interstate business if it does certain other things. Take the agent of a corporation located in some distant western State who sends an article of merchandise through the mails, across a State line. In doing so he is authorizing an act of interstate commerce. His punishment for such an offense, or rather his potential punishment, is a fine of $5,000 and imprisonment not exceeding one year. In order to protect the agent, it seems to me that two words, the word “knowingly" inserted twice, would accomplish the desired result.

In line 24, particularly, after the word “corporation," insert the word “knowingly," so as to make it read," and agents of such corporation knowingly authorizing or ordering any of such prohibited acts,” etc.

In line 21 I suggest after the word “corporation ” insert the word “ knowingly," so as to make it read " That whenever a corporation knowingly violates any of the provisions of this act,” etc.

That is all I have, gentlemen. Thank you.

Senator BRANDEGEE. How could they authorize or order it unknowingly?

Mr. CHAMBERLAIN. The agent?

Senator BRANDEGEE. No; the directors and officers. The corporation does not act in any way except through its directors and officers, does it?

Mr. CHAMBERLAIN. No; I think not.

Senator BRANDEGEE. Now, if they authorize the act, and if it is a violation of the law, they ought to go out of business.

Mr. CHAMBERLAIN. If they knowingly authorize it.

Senator BRANDEGEE. How can they authorize and order it unknowingly? They issue an order or they vote?

Mr. CHAMBERLAIN. Maybe I did not understand your first question. An agent may authorize an act of interstate commerce without knowing at the time he is doing it the corporation is prohibited from doing that.

Senator BRANDEGEE. I am only mentioning it as to the directors and officers. You make the word“ knowingly” apply to all three.

Mr. CHAMBERLAIN. Well, I can see in the case of the directors and officers the case may be exactly the same as in the case of the agent. For instance, a director may go on a board, who is also a director of another board, that might be construed to be doing a competitive business, and that fact might not be known to the directorate any more than to the agent in a far Western State.

Senator BRANDEGEE. If you think that nobody can be punished unless you can prove he knew that the two corporations were in competition or in a competitive business, there would be very few people fined under this act.

Mr. CHAMBERLAIN. I think the insertion of the first “knowingly is less important than the second. I will admit that that might not accomplish the point I am endeavoring to make. I think the result would be partly accomplished probably by the second “knowingly.”

Senator BRANDEGEE. Under the criminal provisions of the antitrust act, there are lots of people the courts are holding guilty of entering into contracts in restraint of trade. If you have got to say that they knew when they were making the contract that they were entering into a contract in restraint of trade, you would not be able to convict anyone.

Mr. CHAMBERLAIN. There is too much burden of proof.
Senator BRANDEGEE. They deny it, and it is pretty hard to prove it.
Mr. Chairman, have we any more witnesses this afternoon?
The CHAIRMAN. No; we have no more.

We are very much obliged to you, Mr. Chamberlain, for appearing here.

Mr. CHAMBERLAIN. I thank you for allowing me to appear.

The CHAIRMAN. You have all your amendments incorporated in one of these bills?

Mr. CHAMBERLAIN. Yes; I gave it to the stenographer this morning

The CHAIRMAN. The stenographer will see to it that the bill as amended by you is incorporated in the record.

We will take an adjournment at this time.
Whereupon, at 4.05 o'clock p. m., the hearing was adjourned.

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FRIDAY, MAY 15, 1914.

COMMITTEE ON INTERSTATE COMMERCE,

UNITED STATES SENATE,

Washington, D.O. The committee met at 10.30 o'clock a. m.

Present: Senators Newlands (chairman), Pomerene, Robinson, Saulsbury, Gore, Cummins, and Townsend.

STATEMENT OF THOMAS B. HARLAN, GENERAL COUNSEL ST.

LOUIS, ROCKY MOUNTAIN & PACIFIC CO.

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The CHAIRMAN. Give your name, residence, and occupation, please.

Mr. HARLAN. My name is Thomas B. Harlan; residence, St. Louis, Mo.; profession, lawyer; and I am general counsel and a director of the St. Louis, Rocky Mountain & Pacific Co. Mr. Van Houten, who is with me, is president of that company.

Let me say in advance that I very much appreciate this opportunity to lay before the committee a concrete proposition, one that in our judgment offends no public policy, but which means a great deal to us, which we believe, if the committee understands, they will not oppose, but which is affected by Senate bill 4160, and particularly by sections 9 and 10.

The St. Louis, Rocky Mountain & Pacific Co. is a corporation under the laws of the State of New Mexico. At the time this corporation was organized, in 1905, New Mexico was a Territory, but the corporate laws have not substantially changed since that time. The St. Louis, Rocky Mountain & Pacific Co. owns a large body of coal land in northern New Mexico. We border on the Colorado line, and the property is in what is known as the Trinidad-Raton coal field.

To develop the property which at that time was for the most part away from the main line of the Atchison, Topeka & Santa Fe Railroad—the trunk line through that country—it was necessary to build a railroad of our own. Under the laws of New Mexico we had to have a separate corporation to operate a railroad. In other words, as the law stood then, and as it stands now, a railroad corporation must be separate and distinct from a manufacturing or mining corporation. To meet that situation we organized a subsidiary company, known as the St. Louis, Rocky Mountain & Pacific Railway Co., which company financed and built the railroad known as the St. Louis, Rocky Mountain & Pacific Railway Co.

I present a map of New Mexico, and indicate to you the Colorado line, the location of Trinidad, the main line of the Atchison, Topeka & Santa Fe coming over the mountains, going through tunnels at the top of the grade. The location of Raton will be seen. Our coal. property lies south of the Colorado line, for the most part west of the Atchison, Topeka & Santa Fe, though some of the property extends to the east. This railroad connects with the Colorado & Southern at a point called Des Moines, and extends almost at right angles, crossing the Santa Fe about 6 miles below Raton, and extending thence westward along the edge of the coal property, to Ute Park, a mountain park in the Rocky Mountains.

We have a branch line that runs from the main line about where it crosses the Santa Fe near Raton. That road was financed in 1905.

The stocks and bonds of the railway company were
The CHAIRMAN. How long is this road?

Mr. Harlan. The main line of the road is 106 miles, and then its sidings and terminals bring the total mileage up to about 120 miles.

The stocks and bonds of this railway company were put under the mortgage of the St. Louis, Rocky Mountain & Pacific Co.--that is, all of the stocks and bonds of the railway company are owned by the coal company, and put up as collateral with the trustee of the mortage of the coal company.

As I say, when we organized the company, and as conditions stood at that time, this railroad was an absolute necessity to the development of this large coal property.

In 1906 the Hepburn Act was passed, which in its prohibitive clauses, interpreting them generally, prevented a railroad from owning a mining company. We were the reverse of that condition, so - that we were not actually within the letter of the IIepburn Act. But as regulations increased under the Interstate Commerce acts, we, as shippers and producers of coal, were more and more protected in our transportation, this railroad became less of a necessity, and realizing that we might at some time be confronted with an amendment of the Hepburn bill which would apply to our situation, that would force a divorcement of these properties, and, coupled with the further fact that this railroad was never a profitable investment so far as we were concerned-it never earned its interest—we had an opportunity, a little over a year ago, to sell this railroad to the Atchison, Topeka & Santa Fe. One of the first questions that came up for serious consideration, after the preliminary negotiations, was whether or not the Atchison could acquire this property without violating the Sherman antitrust law.

That question arose in this way. There is no actual competition of any business originating on the rails within the terminals of the St. Louis, Rocky Mountain & Pacific Railway and on the rails of the Atchison. But by reason of the connection of the St. Louis, Rocky Mountain & Pacific Railway with the Colorado & Southern Railroad, which, as well as the Atchison, entered Denver, there is a route from Denver and connecting points into Raton, N. Mex., by way of the Santa Fe, and there is another route by way of the Colorado & Southern and the St. Louis, Rock Mountain & Pacific, so that building a route in that way there is a little competition, at one point only; that is, at Raton, N. Mex.

Senator POMERENE. Where do you market your coal?

Mr. HARLAN. The coal is marketed quite extensively. We ship into Oklahoma, into Kansas, some into Nebraska, Texas a great deal, New Mexico, Arizona, and Old Mexico, and occasionally some coal

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