Page images
PDF
EPUB

requiring the publication of tariffs and by prohibiting secret departures from such tariffs, and forbidding rebates, preferences, and all other forms of undue discrimination. To this extent and for these purposes the statute is remedial, and is, therefore, entitled to receive that interpretation which reasonably accomplishes the great public purpose which it was enacted to subserve.”

This rule of construction is applicable also to the Sherman Act, in view of the decisions of the Supreme Court in the Northern Securities case, the Addyston Pipe case, the Montague case, and in the Johnson case, * all brought under the Sherman Act except the last named. In the authority first cited the court went to the merits of the controversy, disregarding entirely technical objections. It revealed the heart of the conspiracy charged, and declared that the holding company was created to take over the stock of the competing lines of railway comprised in the merger, thus creating a monopoly, which extinguished competition in the transportation of persons and property from the Great Lakes to the Pacific ocean, and that the holding company was a mere device to cover the unlawful combination. It was a scheme by which the parties sought to do by indirection that which was directly and expressly forbidden. The court considered the Sherman Act a remedial statute, in applying the remedy which it was designed to secure. It considered the real nature of the transaction which resulted in the merger and inquired into the purposes sought to be accomplished thereby. The same thing can be said of the Addyston Pipe case and the Montague case.

In the Johnson case the court construed the Safety Appliance Law, approved March 2, 1893, which was enacted to promote the safety of employees and travelers upon railroads. The carrier claimed that it was a penal statute and must be strictly construed. The Supreme Court refused to adopt this view. On this point, the court, by Chief Justice

1 Northern Securities Co. v. United States, 193 U. S. 197. 2 Addyston Pipe Co. v. United States, 175 U. S. 211. 3 Montague v. Lowry, 193 U. S. 35. 4 Johnson v. Southern Pacific R. R. Co., 196 U. S. 1.

CHESAPEAKE AND ONl10 CASE.

xxxiii

FULLER, reversing the Circuit Court of Appeals, said that the object of the Legislature in enacting the law was to protect the lives and limbs of employees and passengers. The legislative intent was to promote the public welfare and secure safety. The evil sought to be remedied was the risk arising from the necessity of going between cars in coupling and uncoupling them; and that while with respect to suits to recover the penalties and forfeitures provided by the act, it might be construed as penal, yet where it was invoked to secure the remedy, it was a remedial statute. “The design to give relief,” said the chief justice, “ was more dominant than to inflict punishment.”

The value of this rule of construction is apparent, in view of the cases in which the shipper has been defeated in the attempt to secure the benefits which the law was designed to secure to him. The ruling of the lower courts, in some cases, was based upon a narrow and technical construction of the statute. The shipper was defeated and thrown out of court upon technicalities, and the merits of his case were lost sight of in order to promote some technical rule which could not fairly be said to have misled any one. Notably in the Rice case, brought by merchants to recover damages under the Sherman Act, and the case of the Penn Refining Company,2. brought by shippers to recover damages sustained by the act of the carrier in granting rebates in violation of section 2 of the Commerce Act.

Had the construction been given to this remedial legislation, which the Supreme Court indicated should be given to it, in the cases above referred to, a different result might possibly have been reached in those cases, and also in the Harp case, and the Oman case, where the shipper sought to compel the carrier to carry, and afford him the same use of tracks, cars, and terminal facilities which it was claimed were employed by other shippers similarly situated.

1 Rice v. Standard Oil Co., 134 Fed. Rep. 464. 2 Western New York R. R. Co. v. Penn. Refining Co., 137 Fed. Rep. 343. 3 Harp v. Choctaw R. R. Co., 125 Fed. Rep. 445. 4 Oman v. Bedford-Bowling Green Stone Co., 134 Fed. Rep. 64.

THE TOBACCO TRUST CASES. Of equal importance is the decision of the Supreme Court in the Tobacco Trust cases, and its bearing upon the efficiency of anti-trust legislation cannot be overestimated. Credit for the results achieved in this most important litigation is especially due to Mr. Henry W. Taft, special counsel for the government, whose ability and learning in the conduct of the proceeding materially contributed toward securing a construction as to the limitation and scope of the Fourth and Fifth Amendments to the Constitution, involving questions decided by the Supreme Court for the first time in its history.

“The decisions in the Hale and McAllister cases,” says Mr. Tart,1 “ have placed in the hands of the government a potent weapon to compel obedience to the law. How it shall be used will largely depend upon the attitude of the trusts themselves. A just and wise enforcement of the commerce laws did not require an immediate resort to criminal remedies; and circumstances may still exist where the policy of the law may be effectively carried out by means of injunctive relief. The commerce laws deal with a regulation of interstate trade entirely new a generation ago. Business dealings which had before been regarded as justifiable, both in morals and law, became in a day mala prohibiia. Multitudes of transactions which had not been, in their general effect, injurious to trade, were declared to be illegal, not because they were intrinsically immoral or even, under ordinary conditions, in violation of wise economic principles, but because they enabled powerful corporations, by an aggregation of an immense amount of capital, to oppress and ultiinately to exterminate the less powerful. It was a serious matter to prohibit by law methods of business which had prevailed for many years; and the immediate and drastic enforcement of such a law, a reasonable public opinion would neither have demanded nor tolerated. It has taken years to establish the principles upon which it must be determined what constitutes a combination in restraint of interstate

1 Article in Columbia Law Review, June, 1906.

TOBACCO TRUST CASES.

XXXV

trade which is prohibited by the commerce acts. But they are now so far settled that little excuse will hereafter be afforded to a person or corporation for pleading ignorance of them; and there can be no complaint of hardship if, for violations of the law in clear cases, criminal penalties should be vigorously imposed.”

The Supreme Court, in the cases referred to, disposed of the notion that a corporation could enter into conspiracies in restraint of trade and commerce, in violation of the express provisions of an act of Congress, and then escape the penalty for its acts by refusing, when subpænaed, to give any evidence upon which a conviction could be based. In other words, it was claimed that the Fifth Amendment threw about the criminal conduct of corporations an almost impenetrable veil, for if the agents and servants of the corporation could refuse, under subpæna, to answer questions before the grand jury, both they and the corporation would escape punishment, and the law seeking to punish them would become a dead letter. Furthermore, evidence of criminal conspiracy is sometimes clearly revealed in the books of the corporation; and in order to withhold the evidence they contained, the tobacco corporations invoked the aid of the Fourth Amendment, which forbids unreasonable searches and seizures. Had this contention prevailed, corporations engaged in criminal conspiracies in violation of the Commerce Act or the Sherman Act, or any other law which Congress might pass, would, probably, be able to nullify them. No indictment, as a rule, could be found for the crimes which Congress sought to punish, and no convictions could be had even if indictments were found.

In addition to these important principles the court also decided that a grand jury had power, without making a specific charge against any particular person, to conduct an inquisitorial proceeding, examining witnesses, and demanding the production of documentary evidence, with a view to determine whether there has been a violation of law, and, if so, who committed it. The power of the grand jury upon such an investigation is, of course, greatly aided by the immunity provisions contained in the statutes, which, while they render immune the officer or employees of a corporation, do not permit such officer or employee to assert the privilege against incrimination in behalf of the corporation or of any fellow officer or employee.

The decision in the Tobacco Trust cases has overthrown the contention of the corporations, that no law can reach them because their conduct is rendered immune by the Fourth and Fifth Amendments. The Supreme Court has said that the Fifth Amendment does not extend to a corporation at all, and that, while the unreasonable search and seizure prohibited in the Fourth Amendment applies to search and seizure without warrant of law and in the absence of a subpæna or other lawful mandate, a Federal court has power, in any proceeding authorized by law to issue its subpæna or appropriate writ, commanding a corporation or an individual or an officer or agent of the corporation, to appear before a grand jury or before a petit jury and produce its books for inspection, and that books produced in obedience to such legal mandate are not unlawfully seized or searched within the meaning of the Fourth Amendment.

The result is that the Sherman Act and the Commerce Act are enforceable. Counsel will be compelled to resort to some new device to defeat them. They cannot be evaded by invoking, as a refuge the Fourth and Fifth Amendments to the Constitution.

EMPLOYER'S LIABILITY BILL. The first session of the Fifty-ninth Congress has made longer strides in the field of economic legislation than that of any Congress in history. The Interstate Commerce Act: and the Sherman Act were aimed at monopolies and trusts, having for their object the establishment through diverse forms of discrimination, of exclusive commercialism, and exclusive commercialism may be said to be economic anarchy. The Commerce Act affected carriers in their relations toward shippers and consumers, and also in their relations toward the communities, cities, and towns, through which the public

« PreviousContinue »