ÆäÀÌÁö À̹ÌÁö
PDF
ePub

Mr. FARRAR. That could have been the only object-either to put up the price of goods or to curtail the price of raw material. Otherwise they would not have wanted to stop by an agreement between them all.

Senator LIPPITT. You are familiar, perhaps, with the number of spindles there are in the world?

Mr. FARRAR. No, sir; I have never followed that.

Senator LIPPITT. I will say for your information that there are about 130,000,000. You are perhaps also familiar with the number of spindles there are in this country?

Mr. FARRAR. I never followed it.

Senator LIPPITT. Can I say for your information that there are about 28,000,000? And you are perhaps familiar with the number of spindles represented in the Arkwright Club?

Mr. FARRAR. I don't know, sir.

Senator LIPPITT. May I say for your information that there are in the neighborhood of 10?

Mr. FARRAR. Could not the Arkwright Club draw to it all the other 28,000,000 by combination?

Senator LIPPITT. It never has succeeded in doing it.

Mr. FARRAR. Was not the circular which the Arkwright Club sent out sent not only to persons who were owners of the spindles covered by your club, but to every spindle turner in this country?

Senator LIPPITT. I am not familiar with the operations of the officers of the Arkwright Club. I have never had anything to do with the management of the club in any way, but I think not.

I would like to ask you, further, if you do know how many spindles were actually stopped by any agreement?

Mr. FARRAR. I do not know whether the agreement which they made was consummated. I simply know of the circular which was issued and published in the newspapers right under the nose of the Government.

Senator LIPPITT. May I infer from your statement that you do not know of any occasion on which a large number of spindles were stopped in this country for the purpose of reducing the price of raw material?

Mr. FARRAR. Well, I won't say yes and I won't say no.

Senator LIPPITT. You said in the early part of your testimony that such a thing had been done. I was only trying to get your authority for that statement.

Mr. FARRAR. I only give what the newspapers say that there is an agreement between the manufacturers to shut down for so many weeks or such a length of time or to go on short time for so many days, and so on.

Senator LIPPITT. For the purpose of reducing the price of raw material?

Mr. FARRAR. That necessarily is the object of it-either that or to increase the price of the goods. It can not have any other purpose. They do not do it for fun. They do not do it for their health. They do it for some business reason, and the only two business reasons they can have are, first, to increase the price of goods and, second, to lower the price of the raw material.

[ocr errors]

Senator LIPPITT. What I was trying to get on paper in connection with your statement, that it was done for the purpose of reducing the price of the raw material, was to call attention to the fact that the very limited number of spindles that could possibly be controlled in that way, as compared with the total number in the world, which fixes the prices of the raw materials, would inevitably have practically no effect.

Mr. FARRAR. This country consumes about 5,000,000 bales of cotton. The average cotton crop of the South varies from--well, the biggest crop ever made was 13,875,000 bales. The combination of all the American spinners who spin from five bales of cotton up would have a very serious effect on the price.

Senator LIPPITT. But you have no statement or evidence of any such thing ever having been done?

Mr. FARRAR. Not the stoppage of all of them-not the combination of all of them.

Senator LIPPITT. Nor any very large part of them?

Mr. FARRAR. I know that the spinners of this country have held meeting after meeting for the purpose of curtailing the production, and that the newspapers have been filled with it.

Senator LIPPITT. I think that is all. I just wanted to have that matter on record.

The ACTING CHAIRMAN. Senator Pomerene, you may inquire.

Senator POMERENE. Judge, I take it that, in view of your position that the Congress ought to provide for some regulation of these corporations which are doing interstate business, you would also provide for some sort of a board or bureau to investigate and determine whether or not these corporations have complied with those provisions?

Mr. FARRAR. I think that it is only necessary to increase the powers of the Bureau of Corporations. I do not believe in any regulative force, because I do not believe that it is possible to regulate. I think the Congress ought to pass a statute and say: "Here is the law of your life"; and then provide for the right of visitation, and put this fundamental condition upon every State corporation that goes into interstate commerce: "You consent that the Government of the United States shall have the right of visitation." That is one of the conditions. Then, if you bound this board which will exercise that right of visitation at the proper time and under proper circumstances whenever there is any suspicion that any corporation is not obeying the law, come down on it like a nationalbank examiner comes down on a national bank; come down on it, examine it, and report to the Attorney General, and let him proceed if there has been any violation of law.

Senator POMERENE. May I ask then, inasmuch as you have suggested your willingness to draw a bill providing for this regulation, that you include in that also what the bureau provisions should be? Mr. FARRAR. I will do so with pleasure.

Senator POMERENE. I think it will aid the committee materially. I do not think I will take further time.

The ACTING CHAIRMAN. We are very much obliged to you, Mr. Farrar, for your appearance before the committee.

Mr. FARRAR. I am glad, sir, if I have been able to add a mite.

(Mr. Farrar was thereupon excused. The address of Judge Edgar H. Farrar before the American Bar Association, delivered at Boston, Mass., Aug. 30, 1911, is as follows:)

ADDRESS OF THE PRESIDENT, EDGAR H. FARRAR. OF NEW ORLEANS, LA., BEFORE THE AMERICAN BAR ASSOCIATION, DELIVERED AT BOSTON, MASS., AUGUST 30, 1911.

Gentlemen of the American Bar Association, since your last annual meeting the Sixty-first Congress of the United States held its second regular session, and the Sixty-second Congress was sitting in extra session when this report was written. It adjourned after the first draft of this address was in print. The regular session has produced less than a dozen statutes of general importance. The most noteworthy of these is the new judicial code which abolishes the circuit courts, concentrates the nisi prius jurisdiction in the district courts, and revises, amends, and reenacts the statutes pertaining to the judiciary of the United States. A paper on this legislation by a learned ex-justice of the Supreme Court of the United States is part of the program of this meeting. Another of these statutes provides for the purchase or erection in foreign countries of embassy, legation, and consular buildings at a maximum cost of $150,000 each, so that hereafter the representatives abroad of the Nation. will be housed in a manner that comports with the dignity and power of the American people.

In another statute the honor and dignity of the Nation is upheld in a humbler sphere at home by making it a misdemeanor for the proprietor or manager of any theater or place of public amusement to make any discrimination against any person lawfully wearing the uniform of the United States in any military or naval branch of its service. The scope of this statute of course is confined to the District of Columbia, the Territories, and the insular possessions of the United States. New York and Pennsylvania, at the last session of their legislatures, adopted a similar statute, and the other States will doubtless follow in their wake.

The extra session passed the Canadian reciprocity act, the apportionment bill, and a stringent statute requiring the publication of campaign contributions and expenses.

During a visit to Washington in February I took up with Chief Justice White the question of appointing a committee to revise the rules of practice in equity in the Federal courts and learned that the court had already considered the matter and had determined to appoint such a committee. Before adjournment the committee was announced by the court, consisting of the Chief Justice and Justices Lurton and Van Deventer. This committee has issued a circular letter requesting assistance and suggestions from the members of the bar, and it is to be hoped that this request will meet with a hearty response. The court has, under the statute, the fullest power to regulate the whole practice in equity; and we may therefore live in the just expectation that the labors of this committee of distinguished judges, aided by the whole bar, will result in giving the country a system that will respond to the demand for reform in that important branch of legal procedure.

Forty-one States, two Territories, and three insular possessions have had legislative sessions this year, and in some of the States these sessions have been unusually prolonged. In Tennessee the session was interrupted by a legislative strike. Thirty-four members, enough to break the quorum, left the State and remained for a considerable time outside of her boundaries. The Legislature of New York is now in recess, and the Legislatures of Connecticut and Georgia are still in session.

As a result of all this legislative activity more than 9,000 statutes have been added to the aggregate of the laws of our country. Most of them are local, trivial, and formal. Those of them of general interest are set forth in the appendix. As an illustration of the manner in which all of this legislative activity is regarded, one of the vice presidents, in making to me his report for his State, says, "Thank the Lord our legislature did not meet this year." However, there is one strident note of a new radicalism sounded in some of this legislation, which must not be passed unnoticed in an assemblage of lawyers. It comes from a Territory seeking to become a State, and was immediately taken up by the great State of California. I refer to the recall

of judges by popular vote. Arizona has put into her constitution a clause permitting the unseating of a judge by a vote of the people, and the legislature of California has proposed to the people of that State an amendment to her constitution containing a similar provision. The period of transmission of this virus from a Territory to a State has been short. Whether the disease will progress further is to be seen.

It is difficult for one brought up in the traditions of our free American Republic to find language properly to characterize this radical intrusion. If the judicairy of this country were in any material part corrupt, or if there were in our system of laws no effective means to remove corrupt or ignorant judges; or if the means provided had been appealed to in vain and could not be made operative, then there might be some excuse for a revolutionary measure of this character. But none of these things is true. The constitutions of the States provide the most ample machinery for the removal of judges, either by address out of office or by impeachment. This power is put in the hands of the legislative branch of the Government, which derives its mandate at short intervals immediately from the people; and yet how seldom in the history of the Federal Government, and how seldom in the history of the 46 States of this Union, in spite of all the bitterness that enters into our politics has the exercise of this power been invoked. Is not this record of itself a tribute to the American judiciary? Of course, from time to time there arise examples of the Homeric Thersites who attempt to besmirch the ermine worn by the greatest judges and the greatest courts. Without exception, however, their winged words have had but a short flight. The proposed measure would furnish a perpetual audience to men of this kind, and, worst of all, an audience with power to act. It is an assualt on the citadel of law and order. It is an attempt to destroy the independence of the judiciary, without which true liberty-the liberty which is regulated by law, enforced with reason and deliberation-can not exist, and to substitute the opinion and the passions of the mob. It drags down the Goddess and sets the hydraheaded Demos on the throne of justice, and enables the ignorant suffragan to ostracise a judicial Aristides, because he is tired of hearing his judgments called just.

It will not be amiss to quote here the words of Chief Justice Marshall, spoken in the Virginia constitutional convention in 1829. He said: "The judicial department comes home in its effects to every man's fireside. It passes on his property, his reputation, his life, his all. Is it not to the last degree important that a judge should be rendered perfectly and completely independent, with nothing to control him but God and his conscience? I have always thought from my earliest youth till now that the greatest scourge an angry heaven ever infliced upon an ungrateful and a sinning people was an ignorant, a corrupt, or a dependent judiciary." The wise and brave words uttered by President Taft in his veto of the bill admitting Arizona into the Union will pass into the political classics of our country, and, if reason has not gone from the minds of the people, will act as a complete antidote to this new social poison.

It is more than probable that this proposed legislation is one of the symptoms of the political, social, and economic unrest that pervades the whole Nation. The burning question that now agitates the minds of the American people is how to control the corporations; how to break up those great aggregations which seem to be almost as powerful as the Government itself, and how to prevent their formation in the future. These ends are sought both by radicals and conservatives. The radicals, of course, propose to destroy things generally, regardless of consequences, and one of them gnashes his teeth in the July North American Review because the Supreme Court of the United States extended the time within which the hundreds of millions of capital invested in the Standard Oil Co. could be withdrawn without destruction from a combination condemned by the court. The conservatives read the signs of the times, realize the danger of the growing excitement among the masses of the people, and are seeking an exit from the situation that will conserve political liberty and industrial prosperity.

The stock corporation is now an absolutely essential piece of machinery in commerce; without it the great affairs of modern times would not have been undertaken, and if undertaken would not have been accomplished. The outlet afforded by this means to the investment of private capital in great enterprises affected with a public interest, such as railroads, canals, insurance companies, etc., is regarded by some publicists as holding an intimate relation with our democratic system. Otherwise the necessities of society, subserved by these

great enterprises, would have been ministered to by the State, and we should have had long ago in this country a state socialism or collectivism that does not comport with the American idea of individual liberty. In this connection the American Publicist, Ezra Seaman, said in 1864 that the great railroad and canal companies were the only means of preventing governmental occupation of these important enterprises, and that, consequently, they ought to be regarded as bulwarks of liberty against the encroachments of arbitrary power and as security against revolution and anarchy.

A distinguished political economist has said that on the day when the transferable share of stock was invented there began a real economic revolution. It was this device which gave liquidity to capital, and hence promoted the circulation of values, one of the greatest acknowledged causes of the increase of wealth. When this device was united to the conception of the civil law of a corpus societatis, a legal entity, a fictitious person, created by authority of the sovereign power, having its own existence, its own property, its own rights, powers, and responsibilities, absolutely distinct from and independent of the existence, rights, powers, and responsibilities of any or of all of its constituent members, there began the modern conception of a business corporation. The conception is completed by the addition of the limited liability of the stockholders.

The Italian tax farmers of the sixteenth century were the first to use the stock company with transferable shares. An analogous system had been in use as early as the fourteenth century in respect to partnerships in commendam and to the division of the interests in such partnerships in equal and transferable shares.

The charter of the East India Co., in 1600, appears to be the first approach to this form of corporate organization used in England.

Two years later the Dutch India Co. was created by Holland on the same basis; and shortly afterwards similar corporations were organized in France. It is to be noted that the stock corporation in those days was used only for the exploitation of great colonial enterprises, and the corporations created for these purposes were in the nature of public corporations. Two generations later, in 1664, maritime insurance companies were organized in France, and in 1694 the Bank of England obtained its first charter. Corporate development received a great shock in both England and France in the first quarter of the eighteenth century by the almost simultaneous growth and simultaneous bursting of the South Sea bubble in England and Law's Mississippi bubble in France. In England, during the South Sea excitement, there grew up a large number of unauthorized and what, from their objects and purposes, may be called fraudulent voluntary joint stock companies. This led to the prohibitory act of 1720, vulgarly known as the "bubble act," and although only a few corporations for business purposes had been created, or, as we should rather say, in view of their lack of authority, had been attempted to be created, by the colonial governments in America prior to 1741, in that year the provisions of the act of 1720 were extended to the American colonies. The effect of this act was to prevent legally all corporate development in the colonies until after the revolution, and practically until after the adoption of the Constitution. The large commercial enterprises of colonial times were prosecuted by voluntary associations organized as stock companies, resembling in many respects the commandæ originating in the Middle Ages.

Prior to 1850, the general statement holds true that the governments of the great commercial nations were chary of granting corporate privileges for commercial purposes. These grants were usually conferred upon banks, insurance companies, railroads, canals, water-supply companies, gas companies, bridge, and turnpike companies. There were a few mining and manufacturing companies. The general free incorporation law in England dates from 1856, in France from 1863, and in Germany from 1870. At that time, 1850, there were no general incorporation laws for purely private purposes in a large majority of the States then forming the American Union.

This reserve in regard to grants of corporate life and power was doubtless due to a prejudice, widespread among the people, against the creation of such artificial persons in commerce. Whether there was an instinctive dread of such organizations or whether this prejudice grew out of the fact that to the great trading companies organized in the sixteenth and seventeenth centuries were usually given monopolies or special and exclusive privileges which were abhorred by the public, is difficult now to determine. As early as 1688 the people of Massachusetts protested against the granting by the Crown of a

29657-VOL 2-12-7

« ÀÌÀü°è¼Ó »