of election or appointment of Senators | McDermott (Dem.) of the Fourth under the Seventeenth Amendment District of Illinois. McDermott, the and extending direct-primary laws to the nomination of candidates for the Senate (S. 2860) received the President's approval on June 4 (Public, No. 111). It provides that the procedure for the nomination of candidates and the election of Senators shall be carried out as nearly as possible in accordance with the laws governing the nomination and election of Representatives-at-Large, or, where there is no provision for Representatives-at-Large, of the governor of the

state.

committee found, knowing Mulhall's connection with the National Association of Manufacturers, had accepted loans from him, had induced him to assist in the collection of campaign funds, and had been instrumental in placing at his disposal a room in the basement of the Capitol; more important still, McDermott had solicited and accepted loans from Washington pawnbrokers and liquor dealers interested in legislation pending before Congress. While the committee was unable to say that he had been corrupted in his votes, they found that McDermott had been "guilty of acts of grave impropriety, unbecoming the dignity of the distinguished position he occupies."

The Lobby Inquiry. The committee of the House appointed on July 9, 1913, to investigate the alleged activities of a lobby maintained at Washington by the National Association of Manufacturers (A. Y. B., 1913, Mr. MacDonald (Mich.), while p. 25) reported on Dec. 9, 1913 (H. agreeing with the findings of the comReport No. 113, 63d Cong., 2d sess.). mittee, submitted a supplementary The report defined a lobby as "a per- report urging reforms in legislative son or body of persons seeking to in- methods to rehabilitate Congress in fluence legislation by Congress in any popular regard and to diminish the manner whatsoever." It found that power of the lobby to defeat or prelobbies had been maintained at Wash- vent remedial legislation. He offered ington by the National Association of for immediate action two resolutions Manufacturers, the National Council directing the House to determine for Industrial Defense, the National whether certain officers and agents of Tariff Commission Association, the the National Association of Manufac American Federation of Labor, and turers had been guilty of practices local associations of liquor dealers rendering them liable to prosecution and money lenders. Of these, the for contempt (H. Res. 341), and committee found, only the lobbies of whether McDermott had been guilty the National Association of Manufac- of misconduct rendering him unworturers and the National Council for thy of a seat in the House and liable Industrial Defense were guilty of pre- to expulsion (H. Res. 342). A subventing or seeking to prevent legisla- committee of the Committee on the tion by improper means. The report Judiciary to which the report and the denounced as "improper, disreputable McDonald resolutions were referred and dishonest" the formation of tem- recommended on March 17 the adopporary associations under the auspices tion of two resolutions condemning and with the funds of the National the activities of certain officers and Association of Manufacturers through agents of the National Association of the agency of Michael M. Mulhall, the Manufacturers and affirming the cenauthor of the charges against the As- sure of McDermott implied in the resociation. As to Mulhall's credibility, port. The Committee on the Judithe committee found that, although ciary on April 7 rejected the first res some of his statements on important olution as being beyond the scope of matters were on his own admission the authority of the House. It deuntrue, in others he was fully corrob- cided also against the expulsion of orated by officers of the associations McDermott but agreed to report a which employed him. The report ex-resolution of censure. Rather than onerated all the members of the House face the public condemnation of Conof Representatives implicated by Mul- gress, McDermott resigned on July 21. hall's allegations of improper influ- He was reëlected to the Sixty-fourth ence with the exception of James T. Congress on Nov. 3.

THE TRUST PROGRAMME

The President's Message on Trust | have been financed and their own disLegislation.-President Wilson deliv- tinctive interests subordinated to the ered his deferred message on trust interests of the men who financed legislation, the third and last of the them and of other business entermajor items of the Democratic pro- prises which those men wished to programme in joint session of the two mote," the country is ready to accept houses of Congress on Jan. 20. In regard to monopolies and the various means by which they have been organ-power to superintend and regulate the ized and maintained, he said, opinion "seems to be coming to a clear and almost universal agreement" in anticipation of Government action (A. Y. B., 1913, p. 56).

What we are proposing to do, therefore, is, happily, not to hamper or interfere with business as enlightened business men prefer to do it, or in any sense to put it under the ban. The antagonism between business and government is over. We are now about to give expression to the best business judgment of America, to what we know to be the business conscience and honor of the land. The Government and business men are ready to meet each other half way in a common effort to square business methods with both public opinion and the law. The best-informed men of the business world condemn the methods and processes and consequences of monopoly, as we condemn them, and the instinctive judgment of the vast majority of business men everywhere goes with them. We shall now be their spokesmen. That is the strength of our position and the sure prophecy of what will ensue when our reasonable work is

done.

The programme "which opinion deliberately sanctions and for which business men wait" is founded on the conviction that "private monopoly is indefensible and intolerable."

It includes, in the first place, laws which will effectually prohibit and prevent such interlockings of the directorates of great corporations-banks and railroads, industrial, commercial and public-service bodies-as in effect result in making those who borrow and those who lend practically one and the same, those who sell and those who buy but the same persons trading with one another under different names and in different combinations, and those who affect to compete in fact partners and masters of some whole field of business.

a law which will confer upon the Interstate Commerce Commission the financial operations by which the railroads are henceforth to be supplied with the money they need for their proper development, to meet the rapidly growing requirements of the country for increased and improved facilities of transportation.

The business men of the country desire not only that "the menace of legal process in these matters be made explicit and intelligible," but also that "the advice, the definite guidance and information which can be supplied by an administrative body, an interstate commerce commission," be placed at their disposal. The country demands such a commission, not as an agency for making terms with monopoly or for assuming control or direction of business in any way, but as

an indispensable instrument of information and publicity, as a clearing house for the facts by which both the public mind and the managers of great business undertakings should be guided and as an instrumentality for doing justice to business where the processes of the courts or the natural forces of correc tion outside the courts are inadequate to adjust the remedy to the wrong in a way that will meet all the equities and circumstances of the case.

In the second place, recognizing "the great harm and injustice which has been done to many, if not all, of To promote the self-correction of the great railroad systems of the business and to disturb as little as country by the way in which they possible its legitimate course,

penalties and punishments should fall, not upon business itself, to its confusion and interruption, but upon the individuals who use the instrumentalities of business to do things which public policy and sound business practice condemn. Every act of business is done at the command or upon the initiative of some ascertainable person or group of persons. These should be held individually responsible, and the punishment should fall upon them, not upon the business organization of which they make illegal use.

Two other questions demand thoughtful and practical treatment. The first is the interlocking of corporate enterprises, not by identity of directorates, but by the ownership of the greater part of the corporate stock by one person or a group of persons intimately related in interest.

ever, was not carried out with the ease and celerity of the President's anticipation. Its reduction to statutory form for submission to Congress was in itself a long and difficult There was no lack of maprocess.

terial bearing the official party stamp. The famous "seven sisters" laws of New Jersey (A. Y. B., 1913, pp. 13, 344) represented the considered judgment of the President on the prevention of intrastate monopoly. A Democratic bill to create an interstate trade commission was introduced by Senator Newlands on Feb. 27, 1913, with the report of the Cummins committee on the amendment of the Sherman Act (A. Y. B., 1913, p. 7). Two bills designed to prevent the concentration of corporate capital were submitted in 1913 with the report of the of the alleged money trust (A. Y. B., Pujo committee on the investigation 1913, p. 6). But the immediate prospect of comprehensive revision of the anti-trust laws brought to light a flood of bills, expressive of innumerable shades of individual opinion fixed in the long agitation of the trust question, which their authors were prepared to defend as true solutions of the problem. Thus, while the inThe other question is the relief of fluence of the President still domiprivate litigants injured "in one un-nated the party councils, the need of fair way or another by the many dis- adjustment and compromise within lodging and exterminating forces of the majority in Congress was enforced combination." by the very nature of the President's proposals.

We agreed, I take it, that holding companies should be prohibited, what of the controlling private owner but ship of individuals or actually coöperative groups of individuals? Shall the private owners of capital stock be suffered to be themselves, in effect, holding companies? . . Shall we require the owners of stock, when their voting powers in several companies which ought to be independent of one another would tion in which of them they will exercise their right to vote?

constitute actual control, to make elec

I hope that we shall agree in giving private individuals who claim to have been

injured by these processes the right to found their suits for redress upon the facts and judgments proved and entered in suits by the Government where the Government has, upon its own initiative, sued the combinations complained of and won its suit, and that the statute of limitations shall be suffered to run against such litigants only from the

date of the conclusion of the Government's action.

The Democratic members of the

House Committee on the Judiciary, under the chairmanship of Mr. Clayton (Ala.), whom the President had selected as his chief lieutenant in the House (A. Y. B., 1913, p. 25), began early in December, 1913, the formulation of a definite programme. In consultation with the President it was agreed that the objects of the proThese projects of reform, the Presi- posed legislation should be the prohident concluded, are not new things; bition of interlocking directorates, they are "old, now familiar, and must the definition of the various forms be undertaken if we are to square of monopoly and "unreasonable" reour laws with the thought and de-straint of trade, and the establishsire of the country." In enacting ment of an interstate trade commisthem, "we are now about to write the additional articles of our constitution of peace, the peace that is honor and freedom and prosperity."

Preparation of Trust Legislation.— The Administration programme, how

sion. Mr. Clayton undertook the preparation of the necessary bills, and shortly after the reassembly of Congress on Jan. 12 submitted to the President the draft of four measures which were adopted as the basis of

the Administration programme. It prohibiting unfair competition by was agreed meanwhile, as the Presi- means of price discrimination, disdent's message indicated, that Mr. counts, rebates, or exclusive agreeClayton's original programme should ments, and extending to individuals be extended to include the regulation injured by violations of the Sherman of the security issues of common car- Act the right to bring suits in equity riers. The bill for this purpose was against corporations finally adjudged left for subsequent preparation, but guilty of these violations in suits it was intimated that the Administra- prosecuted by the Government. The tion measure would be based on a bill Adamson bill prohibited the interlock(H. R. 9575) introduced on Dec. 1, ing of directorates of naturally com1913, by Mr. Adamson (Ga.), chair-peting common carriers, and extended man of the House Committee on In- the powers of the Interstate Comterstate and Foreign Commerce.

merce Commission to the regulation of the issue, retirement and expenditure of the proceeds of stock and bond issues of carriers engaged in interstate commerce.

The Administration Measures. While the four Clayton bills were published with the sanction of the Administration on Jan. 21, the day following the delivery of the President's trust message, only the first was actually introduced in Congress. The President agreed that the bills should be considered tentative, subject to free discussion, and open to revision. This final elaboration of all the trust measures, according to the President's original plan, should have been entrusted to Mr. Clayton and his Democratic colleagues in the House Committee on the Judiciary. But the

The Five Brothers.-The Clayton bill for the creation of an interstate trade commission, following closely the lines of Senator Newland's bill (S. 5485, 62d Cong., 3d sess.) for this purpose (see supra), proposed the transfer of the organization, appropriations and powers of the Bureau of Corporations to a commission of five members, which should be further endowed with inquisitorial powers over all corporations engaged in interstate or foreign commerce except common carriers; authorized to act in an advisory capacity to the Attorney-General and the courts in suits under the Sherman Act; and directed to assist the Government in preventing violations of the Act and to coöperate with the Attorney-General in terminating unlawful conditions by agreement. House adopted on Jan. 20 a motion The second Clayton bill prohibited, after two years from the date of passage of the act, interlocking of directorates between corporations manufacturing railroad supplies, conducting banks or trust companies or mining or selling coal, and railroad or other public-service corporations engaged in interstate business, and also between banks or trust companies operating under the Federal Reserve Act between banks or trust companies within and banking institutions outside the Federal reserve system. The third of the Clayton bills defined in specific terms the unlawful practices implied in the words "contract," "combination in the form of trust or otherwise," "conspiracy in restraint of trade or commerce," and "monopolize," as used in the Sherman Act and its amendments. Mr. Clayton's fourth bill, dealing with the subject of trade relations, proposed to supplement the Sherman Act with five new sections,

offered by Mr. Underwood to refer that part of the President's message relating to the establishment of an interstate trade commission to the Committee on Interstate and Foreign Commerce, leaving the balance of the message to the Committee on the Judiciary. Thus Mr. Clayton's bill for the creation of a trade commission was taken out of his jurisdiction. Introduced 'n the House on Jan. 22 (H. R. 12120), it was referred to Mr. Adamson's Committee, by whom it was used as the basis of the Covington bill later introduced as an Administration measure.

At the President's behest the two committees undertook to receive and consider the views of interested persons on the "Five Brothers" to the fullest extent consistent with prompt enactment by Congress. The Committee on Interstate and Foreign Commerce began on Jan. 30 a series of hearings on the bill to create an inter

state trade commission, which led | bitions of the Sherman Act were sufpromptly to the abandonment of the ficient to prevent interlocking of diClayton measure. A careful exami-rectorates to any extent likely to be nation exposed certain inconsisten- injurious to commerce; while the cies, contradictions, and grants of amendment of the Act as contemplatpowers of search and seizure of doubt-ed in the definitions and trade-relaful constitutionality. Radicals of all tions bills, adding nothing to its parties contended for a grant to the strength, entailed grave danger of improposed commission of powers over pairing its efficacy in the hands of all corporations analogous to those the courts. President Wilson was exercised over common carriers by the persuaded by the arguments of SenInterstate Commerce Commission. But ator Newlands, Mr. Underwood, and Attorney-General McReynolds op- others, of the peril of undertaking to posed the powers conferred by the define specific violations of the SherClayton bill as a possible source of man Act by legislation which might conflict with the Department of Jus- be construed to exempt all violations tice in the enforcement of the anti- not specifically described. He was trust laws; Mr. Adamson and a ma- convinced also that the broad prohijority of his Committee, favoring a bitions of the interlocking directorgradual development of the functions ates bill might interfere in many of the trade commission, opposed an ways with legitimate enterprises. On initial grant of the broad powers pro- March 5 the President agreed with posed by Mr. Clayton; and the Presi- Mr. Clayton on extensive modification dent was persuaded that the powers of the three bills, approving at the already possessed by the Bureau of same time an extension of the proCorporations, if properly organized, gramme to include legislation for the were sufficient, at least temporarily, regulation of holding companies. for the purposes of the commission. The Committee on Interstate and Foreign Commerce continued its hearings until Feb. 20, but on the 16th Mr. Adamson committed the preparation of a new measure to a sub-committee of five Democrats and three Republicans under the chairmanship of J. Harry Covington (Md.). Their modifications of the Clayton draft were embodied in a bill (H. R. 14631) introduced in the House by Mr. Covington on March 14. After some revision in the Committee on Interstate and Foreign Commerce and final approval by the President and the Attorney-General, the Covington bill was reintroduced as an Administration measure on April 13 (H. R. 15613). The remainder of Mr. Clayton's programme was likewise transformed by conservative influences. In the hearings begun by the Committee on the Judiciary on Jan. 29, business and financial interests offered objections to the radical provisions of the bills to prohibit interlocking directorates, to define the Sherman Act, and to regulate trade relations, which found strong support in Congress. Senator Newlands, chairman of the Senate Committee on Interstate and Foreign Commerce, maintained that the prohi

Three days later, revoking an essential recommendation of his trust message, the President agreed to the abandonment of the bill defining the Sherman Act and the substitution of legislation designed to fix and punish individual responsibility for specific acts in violation of existing law. The revised programme Mr. Clayton then proceeded to consolidate in a single measure. Meanwhile the Committee was besieged by the influences which inserted the clause exempting labor organizations and agricultural associations from prosecution under the Sherman Act in the Sundry Civil Appropriation bill of 1913 (A. Y. B., 1913, pp. 4, 23). To fulfill a pledge of the Democratic platform of 1912, for which legislation was already before the House in two bills introduced by Mr. Clayton and favorably reported during the first session of the Sixtythird Congress, the President consented to the incorporation of provi sions limiting the issuance of restraining orders in labor disputes and prescribing trial by jury in contempt proceedings. For some weeks Mr. Clayton's Committee withstood the demand of union labor for legislative recognition of a privileged status under the anti-trust laws conferred by