Take, for instance, the facts concerning the powder and explosive business, as found by the United States Circuit Court in the recently decided case to which I have already referred.

The record of the case now before us [said Judge Lanning] shows that from 1872 to 1902, a period of thirty years, the purpose of the trade associations had been to dominate the powder and explosives trade in the United States by fixing prices, not according to any law of supply and demand, for they arbitrarily limited the output of each member, but according to the will of their managers. It appears, further, that although these associations were not always strong enough to control absolutely the prices of explosives, their purpose to do so was never abandoned. Under the last of the trade association agreements the one dated July 1, 1896, and which was in force until June 30, 1904-the control of the combination was firmer than it had before been. Succeeding the death of Eugene du Pont in January, 1902, and the advent of Thomas Coleman du Pont and Pierre S. du Pont, the attempt was made to continue the restraint upon interstate commerce and the monopoly then existing, by vesting, in a few corporations, the title to the assets of all the corporations affiliated with the trade association, then dissolving the corporations whose assets had been so acquired, and binding the few corporations owning the operating plants in one holding company, which should be able to prescribe policies and control the business of all the subsidiaries without the uncertainties attendant upon a combination in the nature of a trade association. That attempt resulted in complete success.

For years, the Court said, trade agreements between all manufacturers of powder and explosives in the United States have been in existence. There were times when the parties to these agreements broke away from and disregarded them, but usually the fines and penalties imposed on the violators were effective to protect and effectuate them.

A large number of indictments recently found in the Southern District of New York, were based upon evidence of the continued existence during a number of years, and until a recent date, of pools, or associations of manufacturers of various kinds of wire, under which official and noncompetitive prices were fixed, determined, agreed upon, and maintained.

The fact seems to be, that the prices of many standard articles of consumption sold in the United States for a number of years past have not been fixed at all by the operation of the laws of supply and demand, or by unrestrained competition, but by associations of the producers, without the participation of the consumer or the general public —that is, without those who have had to pay the bill having any voice in fixing the price. In this view, it is certainly not unreasonable that the purchasing public should desire to have some part in determining the price it is to pay-in like manner as has been recognized to be just with respect to the cost of transportation.

If there could be any assurance that the free play of competition would be assured, and the

natural price resulting from the unrestrained operation of supply and demand maintained, then no governmental supervision of business-beyond occasional prosecutions for violations of the Sherman Law-would be necessary. But the habits formed through years of following a system are not easily shaken off, and the artificial forms of organizations made necessary by the conflicting laws of many States with those of the nation will always present a border land of doubt, which will furnish, on the one hand, opportunities for those who wish to violate the law to do so with some show of justification; and on the other, to perplex those who are sincerely desirous of keeping the law, but by reason of the complexity and conflict of different State laws find it difficult to do so without seeming to run counter to the anti-trust law. The supervision of a Federal commission might supply a satisfactory method of reaching this difficulty.

In theory, it would seem that such a commission should have some power over prices; but the practical difficulties in the way of exercising such power so as not to inflict a greater evil than that it is intended to cure, are so great as perhaps to be insurmountable. It would be well-nigh impossible to fix a maximum price which would not be, on the one hand unjust to the small producer, and on the other hand unduly to increase the profit of the large producer. For the large producer, with an adequate supply of raw material, and the economies

and efficiencies only possible with a large capital and extensive organization, can always afford to sell at prices which would be ruinous to the small producer.

These problems go to the very root of the continued prosperity of our people. They can only be solved by a careful consideration free from any partisan bias. I have not attempted to express a conclusion, but merely to state the elements of a problem which, if wisely determined, will "scatter plenty o'er a smiling land," and if unwisely dealt with, may paralyze the hand of industry that maketh rich-not with the unequal wealth of monopoly, but with the distributed wealth which brings national prosperity and continued peace.

II

X

RESULTS OF THE TRUST DISSOLUTION

THE

SUITS

HE trust question; that is the question of the proper relation of the Government to large business organizations, is a great economic question which should not be made the football of politics. The men who united in framing the Sherman Anti-trust Law were Democrats as well as Republicans. In the final debate in the Senate, one of the clearest statements of the need and purpose of that legislation, was made by Senator George, a Democratic Senator from Mississippi.

Since President Taft came into office, eleven (11) final decrees have been entered in equity suits brought by the Government under the Sherman Law to prevent and restrain violations of the act; two (2) large combinations of competitive concerns have been voluntarily dissolved, following criminal prosecutions of individuals concerned in them; and in one other instance, a temporary

From an Address before the Finance Forum, West Side Young Men's Christian Association, New York, Nov. 13, 1912.