SUPREME COURT STRIKES LABOR A BODY BLOW
Supreme Court Strikes Labor A Body Blow THIRTY YEARS ago Congress enacted the Sherman Anti-Trust Law. This great statute was the work of the ablest lawyers and statesmen of that generation....
...This section of the Clay-t Act was passed to prohibit this very practice...
...That no restraining order or injunction shall be granted by any court of the United States, or a judge or the judges thereof, in any case between an employer and employees, or between employers and employees, or between employees, or between persons employed and persons seeking employment, involving, or growing out of, a dispute concerning terms or conditions of employment, unless necessary to prevent irreparable injury to property, or to a property right, of the party making the application, for which injury there is no adequate remedy at law, and such property or property right must be described with particularity in the application, which must be in writing and sworn to by the applicant or by his agent or attorney...
...When the cost of maintenance is advanced three-quarters of a billion dollars in one year on the item of repair work on engines and cars alone, the public must pay this enormous sum in rates, and an additional 40 millions on the inflated "aggregate value" for the roads will charge the exorbitant outlay of funds to capital account...
...The method adopted by the majority to accomplish this object is the familiar one of reading into the statute language which it does not contain...
...The most scathing indictment of judicial processes by which this result has been reached will be found in the dissenting opinions of the able jurists, who while in the minority, have in forcible language voiced their protest against the unconstitutional action of the judges constituting the majority...
...And today it can be said that the courts by usurpation of legislative power have weakened and practically destroyed the effectiveness of that great statute...
...Congress passed the Esch-Cummins law, guaranty clause and all...
...Three members of the Supreme Court dissented: Mr...
...Justice Brandeis, Mr...
...The great trusts and combinations at which this legislation was aimed have openly flouted it, and with the aid of the federal courts have turned it to their own advantage...
...Less than one month ago, a bill was framed in the interest of the railroads "suspending for one year the operation of Section 10 of the Clayton Act...
...For over and above President and Congress and Courts, and greater than all is the sovereign power of the people...
...Esch and Mr...
...that it was not the intent of Congress to prohibit only unreasonable restraints of trade but all restraints of trade...
...Justice Holmes, and Mr...
...The opinion of the court overrules two lower courts in this case, both of which decided in favor of the workmen...
...But notwithstanding this authoritative action by the Judiciary Committee of the Senate, the Supreme Court of the United States on the 14th day of May, 1911, wrote into the statute by judicial construction the word "unreasonable...
...The friends of the bill scornfully replied that the methods of Hill and Harri-man had died with their masters, and it was glibly asserted that the last chapter in the shameful book of railroad graft had long since been written...
...Before the bill had been signed, the Machinists' International Union and Progressives in the Senate and House informed the President that the bill legalized the criminal "repair" contracts of the railroads by suspending Section 10 of the Clayton Act, and the President wisely vetoed the bill...
...namely, the efforts of the masses of the people to organize for their own protection against monopoly...
...The manifest purpose of that section was to exempt farmers' organizations and other labor organizations from those general provisions of the anti-trust laws which the courts had held futile to curb the industrial trusts, but very effective to destroy organizations of Workmen...
...The railroads are letting their repair work to "outside" supply companies and shops which are owned by the same New York bankers who own the railroads...
...I have proposed an amendment to the ton Act which will meet the Supreme Court decision of January...
...The public must pay every dollar of the expenses, on top of the profit, in rates, and rates will rise with rising cost of maintenance...
...How plain and simple is the language...
...Nor is this all...
...The litigation involving the Steel Trust, the Standard Oil, the Packers, and the other great trusts and combinations, has shown the futility of attempting to curb monopoly in the face of adverse rulings from the court putting at nought the expressed will of the Congress...
...More than this, they have from- time to time struck down the additional statutes enacted by Congress to strengthen and supplement the Anti-Trust Law...
...As stated by Judge Stewart, the provisions of the law "are as broad, sweeping and explicit as the English language can make them...
...For six years it has been the accepted opinion in this country, held by bench and bar, that the plain purpose of Co...
...From reliable information now on file at Washington, it is estimated that these repairs have been made for months back, and are now being made, at four times the cost for which identical repairs were made in the railroads' shops...
...Apologists for the Esch-Cummins Law pointed reassuringly to Section 422 of the law...
...or from doing any act or thing which might lawfully be done in the absence of such dispute by any party thereto...
...But with the Esch-Cummins Law on the books, the public has a vital interest in these criminally lavish expenditures, because the public pays the bill...
...Cummins introduced the bill in the House and Senate...
...By the majority decision, section 20 of the Clayton Act is destroyed and labor organizations are placed at the mercy of every employer and combination of employers who may seek injunctions from the federal courts...
...or from ceasing to patronize or to employ any party to such dispute, or from recommending, advising, or persuading others by peaceful and lawful means so to do...
...More Graft Under Esch-Cummins Law ON January 3, the Interstate Commerce Commission at Washington ordered an investigation which promises to reveal conditions of graft and dishonesty under the operation of the Esch-Cummins Law justifying the worst fears of the opponents of that iniquitous measure...
...It was proposed that farmers' organizations should be destroyed by the same method...
...By charging themselves extortionate prices to be paid by the public, they not only fill their own coffers, but raise the cost of maintenance and then boost the rates the public must pay in order to maintain the level of railroad profit at the 5 1/2 per cent fixed by the Esch-Cummins Law...
...or from peaceably assembling in a lawful manner, and for lawful purposes...
...As said by Judge Stewart of Vermont, a distinguished jurist and statesman, in closing the debate in the House of Representatives when the law was enacted in 1890: "The provisions of this trust bill are as broad, sweeping and explicit as the English language can make them, to express the power of Congress on this subject under the Constitution of the United States...
...Whenever and wherever they fail they will be so changed by constitutional methods as to make them effective to serve the purpose for which they were created...
...or from paying or giving to, or withholding from, any person engaged in such dispute, any strike benefits or other moneys or things of value...
...But it is by no means the whole story...
...It does not go so far in protecting or as a similar provision in the English Trades' Dispute Act of 1906 which has been ac-quiesced in ever since that date by the coarts of England...
...Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 20 of the act approved October 15, 1914, entitled, "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," be and the same hereby is amended so as to read as follows: "Sec...
...Guided by the minds of skillful lawyers on and off the bench, this legislation was diverted entirely from its purpose and turned into a weapon to destroy that which it was designed to protect...
...The Interstate Commerce Commission obeyed the law by advancing rates one-third to raise the 1500 millions needed to pay the guaranteed return...
...Could any combination of words make plainer the meaning of Congress...
...Following the enactment of this law, the trusts, through the ablest counsel they could employ, sought in every case tried under this statute to secure from the courts a judicial construction declaring it to have been the intent of Congress to prohibit only such trusts and combinations as unreasonably restrain trade...
...What has happened since the law went into effect March 1, and the railroads were returned to the "honest, efficient and economical management" of their Wall Street owners, challenges belief...
...They reduced the work in their own shops, throwing more than 30,000 union workmen out of employment in the face of approaching winter, and sent hundreds of their locomotives and thousands of their freight cars to the favored "outside" shops for repairs...
...During the first decade of the twentieth century, the attorneys of Wall Street were successful in obtaining rulings from the courts applying the anti-trust laws to labor unions...
...When we arrived at a point where the courts of this country nullify, by the exercise of legislative power, a statute framed to protect the people from monopoly, and apply it to destroy the very organizations which the statute is designed to protect, it is time that we inquire how far we have departed from the plan of the founders of the Government...
...It is alleged that the increased cost of repairing all freight cars and locomotives alone in the "outside" shops will, if continued, approach 750 millions of dollars a year...
...Sherman, Edmunds, Hoar, Turpie, Taylor, Culberson, Stewart, and the eminent statesmen associated with them, after profound study and deliberation, gave to the American people this perfected law for their protection against the grinding oppression of industrial and commercial monopoly...
...Statutes and Courts and Constitutions and all the complex details of government are but instruments created by the citizen for the orderly execution of his will...
...And the men who voted for the bill returned to their constituents boldly proclaiming that the Esch-Cum-mins Law was "the most progressive law ever passed by any state or Congress...
...Justice Clark...
...When the Cummins bill was before Congress, I warned the Senate that by guaranteeing a net profit to the roads out of the people's pockets, Congress was putting a premium on extravagance and fraud...
...In the meantime these powerful interests sought by every argument and inducement to secure from Congress an amendment of the law by inserting the word "unreasonable" before the word "restraint," in the provisions of the law above quoted...
...In the absence of members opposed to the bill, the measure slipr~i through the Senate without debate and was passed by the House, Congressman Esch having charge the bill, before members were aware of its true significance...
...To meet this situation, Congress, in 1914, enacted the Clayton Act, section 20 of which specifically exempted organizations of workmen and farmers from prosecution under the antitrust laws, by the use of injunctions...
...By discharging 30,000 union men employed in the railroad shops, and confining the repair work to the "outside" shops, where workmen must surrender their union cards at the employment desk, the Morgan interests are pursuing their campaign to smash the unions, at the public's expense...
...This act of the Supreme Court was a deadly blow to the Sherman Anti-Trust Law...
...and that to amend the law by inserting the word "unreasonable" before the word "restraint" would utterly destroy its value as a protection against monopoly...
...The practices outlined above are to be the subject of inquiry by the Interstate Commerce Commission...
...Section 422 of the law guarantees the roads a profit of at least 5 1/2 Per cent, AFTER ALL EXPENSES ARE PAID...
...J. P. Morgan and Company, the Guaranty Trust, the First National Bank, the National City Bank, and, the other financial units in the Wall Street Combine, which control more than 300 railroad directorships, control also 54 directorships among the repair and construction companies ! Thus the bankers of Wall street, who control and manipulate the railroads turn the repair and construction business of the roads over to their own rep construction companies, at an enormous profit to the railroads...
...I am simply asking that we should put section 20 of the Clayton Act back where it was before it was nullified by certain lawyers of a certain school of economic thought who happen to be sitting on the Supreme Court Bench...
...And no restraining order or injunction SHALL BE GRANTED BY ANY COURT OF THE UNITED STATES, OR A JUDGE OR JUDGES THEREOF, which shall prohibit any person or persons, whether singly or in concert, WHETHER PARTIES TO THE DISPUTE OR NOT, from terminating any relation of employment, or from ceasing to perform any work or labor, or from recommending, advising, or persuading ANY OTHER PERSONS, WHOMSOEVER, by peaceful means so to do...
...But on January 3, 1921, the Supreme Court of the United States returned an opinion in the case of the Duplex Printing Company, against Emil J. Deering, acting for the International Association of Machinists, which destroys the effect of section 20 of the Clayton Act, and again makes the labor unions the target for prosecution under the anti-trust laws...
...This will continue even after the reorganization of the railroad companies, because it guarantees a fixed net income without in any way limiting expenditures...
...In the minority report which I filed with the Senate from the Committee on Interstate and Foreign Commerce, appeared the following: "If these roads are returned to the owners under this bill, they go back with the certainty that they will buy their engines, cars, and equipment from themselves through inside "supply companies" at graft prices and huge rake-offs to railway officials, for which the public will pay in extortionate and ever-increasing transportation charges...
...gress declared in the Clayton Act had been accomplished and that organizations of workmen were safe against attack under the terms of a law which had never been intended to apply to them...
...or from attending at any place where any such person or persons may lawfully be, for the purpose of peacefully obtaining or communicating information, or from peacefully persuading any person to work or to abstain from working...
...No sooner had the government relinquished control than the private owners began to organize, and make contracts with existing repair and construction companies, in which they held a substantial interest...
...The substantial effect of the de-cision is to prevent workmen from com-bining in a refusal to handle the products of an antagonist in a trade dispute...
...I am not proposing by this bill that we should be as fair to labor as the British Government and en-act as liberal a statute as that passed by Parliament...
...This is one angle of the repair scandal...
...And now the Senate Committee on Interstate Commerce is engaged in an attempt to so frame a bill that it will hamstring section 10 of the Clayton Act and at the same time escape, if possible, another Presidential veto...
...A BILL TO AMEND the act of October 15, 1914, entitled, "An Act to supplement existing laws against unlawful restraint and monopolies, and for other purposes...
...The warnings raised in Congress against the inevitable results of giving the railroads assurance of a fixed profit AFTER ALL EXPENSES HAD BEEN PAID, fell on deaf ears...
...Abraham Lincoln said the final word upon this subject in a speech at Cincinnati, Ohio, September 17, 1859: "The people of these United States are the rightful masters of both the Congress and the Courts, not to overthrow the Constitution, but to overthrow the men who pervert the Constitution...
...The Sherman Anti-Trust Law provides that: "Every contract, combination in the form of a trust or otherwise, or conspiracy in restraint of trade or commerce among the several states or nations, is hereby declared to be illegal...
...There is danger that the officials of the roads will organize construction companies and corporations for selling supplies and equipment to the roads and kindred operations, and in that way loot the roads of fabulous sums by excessive charges...
...nor shall any of the acts specified in this paragraph be considered or held to be violations of any law of the United States...
...We shall make little progress in freeing ourselves from the monopoly control of the economic life of this nation until our courts cease assuming legislative authority to reverse by judicial construction the plain meaning of the laws enacted by Congress...
...It provided, in substance, that the roads should be allowed to charge rates high enough to pay a dividend of 5 1/2 to 6 per cent on their "aggregate value," "under HONEST, EFFICIENT AND ECONOMICAL MANAGEMENT and REASONABLE EXPENDITURES for maintenance of way, structures and equipment...
...If an ordinary business should waste its resources in this profligate fashion, it would speedily go bankrupt and the public would shed no tears for its passing...
...Through the Judiciary Committee of the United States Senate, it was officially declared that it was the intention of Congress to declare every contract in restraint of trade unlawful...
...Congress refused to so amend the law...
...Again and again in more recent years the federal courts have rendered decisions, the cumulative effect of which has been to completely undermine this great statute...
...In the meantime the public is making a vigorous protest against further mutilation of the Clayton Act and Progressives in the Senate and House are preparing to contest legislation legalizing a continuance this graft under the Esch-Cummins Act...
...During the debate on the Cummins bill, I ventured the following prediction: "This bill puts a premium on extravagance and the squandering of the money collected from the people...
Vol. 13 • January 1921 • No. 1
