§ 17. The trust issues in 1912. The campaign of 1912 presented in an interesting manner the three policies above outlined. The Republican party, led by President Taft, stood for the policy of monopoly prosecuted; its program was the vigorous enforcement of the Sherman law. The Progressive party, led by Mr. Roosevelt, stood in the main for the policy of "monopoly accepted and regulated"; its program called for minimizing prosecution and for retaining trusts under a system of regulation. The Democratic party, led by Mr. Wilson, stood for the policy of competition maintained and regulated, and the problem was to find means to strengthen and regularize the forces of competition.

In practice these programs doubtless are less divergent than they appear. All alike proposed the retention of the Sherman law. The two proposals to go further were presented as mutually exclusive alternatives, whereas they necessarily must supplement each other in some degree. The Progressives did not expect all industries to become monopolies, and the Democrats tacitly conceded to monopoly accepted the large field of transportation and local utilities it already had occupied. But there was a real difference in the angle of approach and a real difference in emphasis. The Democratic program (though somewhat unclearly) showed greater distrust of monopoly and greater faith in the possibilities of creating fair conditions of competition (which never had fully prevailed) in which efficiency would be able to prove its merits and monopoly would work its own undoing. It is more logical for the country to give this policy an adequate trial before adopting irrevocably the policy of general industrial monopoly. In either case, competition actual or potential is the fundamental principle by which prices have to be regulated. Where competition is enforced it is by applying some general rules that create a general market price instead of discriminatory prices, but the fixing of the price is left to the competitors. Where monopoly is accepted prices must be fixed with reference to an estimated competitive standard, that which under hypothetically free conditions would just suffice to attract and retain private enterprise and capital.

§ 18. Anti-trust legislation of 1914. The anti-trust legislation of 1914, passed by the Democratic party to carry out its program, is embodied in two acts: the Clayton Act and the Federal Trade Commission Act. The Clayton Act forbids discrimination where the effect may be to lessen competition or tend to create a monopoly, and lays down new rules for determining fair prices. It permits due allowance to be made for differences in the cost of selling or transportation, but a difference is not required in such cases. It forbids contracts to prevent dealers from handling other brands. It forbids corporate ownership of stock in a competing corporation, forbids interlocking directorates in large banks and in other competing corporations, with capital, surplus, and undivided profits aggregating more than $1,000,000. The Federal Trade Commission Act provided an agency with administrative and quasi-judicial functions to deal with unfair practices, displacing the Bureau of Corporations, established in 1903. In addition to its administrative provisions for investigation, reports, and readjustment of the business of companies upon request of the courts, the act declares that "unfair methods of competition in commerce" are unlawful, and both empowers and directs the Commission to prevent their use (banks and common carriers subject to other acts being excepted).

§ 19. Guiding principles of the new policy. The Commission in March, 1915, began its work. Only two years later, and for the next three years, it was called upon to give a large part of its efforts to aiding other governmental agencies in their war-time and post-bellum work, especially in cost-fixing investigations, and could not adequately perform its original task. At the end of six years, many of the evils which the Commission was designed to correct still prevailed.

The price advances within that period had been so swift and bewildering that they obscured all distinctions of normal demand, normal supply, fair price, war profiteering, and monopoly. For example, investigations in 1921 in New York and other cities revealed incredible monopolistic practices in the building industries, by labor and capital alike.

But for all this it cannot be doubted that a new and potent agency for creating higher business standards has been brought into existence. The new legislation drew the attention of the country to the development of a better commercial morality. Many business men wrote to the Commission commending the purposes of the law, and offering their cooperation to eradicate long standing practices which they deplored. The Commission admirably declared that it was seeking "to understand and make allowance for the difficulty of the problem, to see both sides of every case, to protect men in the furtherance of legitimate self-interest by all reasonable and normal methods, and at the same time to keep the channels of competition free and open to all, so that a man with small capital may engage in competition with powerful rivals, assured that he may operate his business free from harassment and intimidation and be given a fair opportunity to work out his business problems with such industry, efficiency, and intelligence as he may possess."

§ 20. Some early fruits. Through the investigations of its economic division the Commission has collected a stupendous mass of detailed information on the conditions and the trade practices in many of the leading industries of the country, throwing the light of publicity into many a dark corner of commercial abuses.

The legal division of the Commission at the end of its first five years had received almost exactly two thousand applications for complaints (for unfair practices and violation of the Clayton Act), upon which it had made inquiries and dismissed about one half without publicity. The number of these had increased each year, more than one third having been in the last year. The Commission had in more than six hundred of these cases issued formal complaints, of which more were in the last year than in the previous four years.

In taking up these complaints the names of the complaining parties are not disclosed. The Commission's work is primarily to protect the public interest and not merely to intervene in "contests between individuals in relation to their private rights." On this theory, the Commission may and does institute proceedings "on its own motion without charges being made to it or upon application of parties not directly affected by the practices complained of." This present policy in respect to monopoly stands out in striking contrast to the theory of the private litigant and the injured party as embodied in the preceding law and practice. It still remains to be seen whether, in the near future, it will be possible to scotch the snake of monopoly and give to the "common man" the chance to live and work according to fair rules of the game in business enterprise.

References

Bolen, G. L., Plain facts as to the trusts and the tariff. 1902.

N. Y. Brown, W. J., The prevention and control of monopolies. N. Y.

Dutton. 1915. Clark, J. B., The problem of monopoly. N. Y. Lemcke. 1904. Clark, J. B., and J. M., The trust problem. Doubleday. .4th ed.

1917. Davies, J. E., Trust laws and unfair competition. U. S. Bur. of Corporations. 1916. Ely, R. T., Monopolies and trusts. N. Y. Macmillan. 1900. Grunsky, C. E., Public utility rate fixing. Journal of electricity technical book shop. 1918. Jenks, J. W., The trust problem. Rev. ed. N. Y. Doubleday. 1917. Kinley, David, The renewed extension of government control of. economic life. A. E. Rev., 4 (no. 1, supp.) : 3-17. 1914. LeRossignol, J. E., Monopolies past and present. N. Y. Crowell.

1900. Orth, 8. P., (Ed.), Readings on the relation of government to property and industry. Bost. Ginn. 1915. Ripley, W. Z., (Ed.), Trusts, pools and corporations. Ed. Bost.

Ginn. 1916. Turberville and Howe, Great Britain in the latest age - from laissez faire to state control. New York. Dutton. 1921. United States Industrial Commission, Report. 1898-1901. 19 vols. Wyman, Bruce, Control of the market. N. Y. Moffat. 1911.