OUR JUDICIAL OLIGARCHY: (FIFTH ARTICLE)
Roe, Gilbert E.
OUR JUDICIAL OLIGARCHY (FIFTH ARTICLE) Why the People Distrust the Courts By GILBERT E. ROE (Copyrighted 1911, The Robert M. La Follette Co.) STILL FRESH in the minds of all of us are the...
...The American Tobacco Company case came up from the United States Circuit Court of Appeals for the Southern District of New York...
...Now, at the outset, it is necessary to understand the full import of this conclusion...
...These considerations are, however, not for us...
...On the other hand, it may be that the protection of the public from the operations of combinations of capital—especially those possessing the element of oppression—requires some measure of governmental intervention...
...Justice McKenna, who took no part in the decision of the Joint Traffic case...
...The parties to it are presumed to intend the inevitable result of their acts, and neither their actual intent nor the reasonableness of the restraint imposed may withdraw it from the denunciation of the statute...
...On January 26, 1909, the Judiciary Committee reported the bill adversely...
...previous decisions of the United States Supreme Court above noticed, and it is said:(13) "Repeated discussion and consideration of the purpose and meaning of this act have established, by controlling authority, beyond debate in this tribunal, these pertinent rules for its interpretation and application to the facts of this case...
...occasions...
...The bill was first referred to the Committee on Interstate Commerce...
...6) Justices White, Gray and Shiras again dissented, and Mr...
...in 1897...
...Justice Lacombe said: (10) "Act July 2, 1890, c. 647, 26 Stat...
...Opinion delivered May 29, 1911...
...What does this mean...
...Roe, in his next article, will discuss some of the results certain to follow from the Standard Oil and American Tobacco Company decisions...
...The ease finally reached the Supreme Court of the United States in December, 1896, and was decided in March, 1897, and that Court held, five judges to four, that the Act in question was violated by the contract between the railroads, and gave judgment annulling the contract...
...8) January 7, 1910...
...The test of the legality of a contract or combination under this act is its direct and necessary effect upon competition in interstate or international commerce...
...Whether that will be the result or not we do not know and cannot predict...
...6) United States v. Joint Traffic Association, 171 U. S., 605, 578...
...The difficulty of meeting, by reasoning, a premise of this nature is frankly conceded, for, of course, where the fundamental proposition upon which the whole contention rests is that the act of Congress is unreasonable, it would seem conducive to no useful purpose to invoke reason as applicable to and as controlling the construction of a statute which is admitted to be beyond the pale of reason...
...3) Mr...
...It practically covers the field of Federal jurisdiction, and is in every respect a model law...
...Their opinions leave no doubt that they thoroughly understood the rule of law which the Supreme Court had announced in that case...
...To destroy or undermine it at the present juncture, when combinations are on the increase, and appear to be as oblivious as ever of the rights of the public, would be a calamity...
...209 (U...
...Congress had steadfastly refused to write into the law the little word "unreasonable"— and how much hinges on that one word!-but the Court, ignoring the plain intent of law makers, and reversing its own well-settled rule of law on this very statute, put that word into the Act...
...such a danger was thought to be imminent, and all felt that it must be met firmly and by such statutory regulations as would adequately protect the people against oppression and wrong...
...A contract may be in restraint of trade and still be valid at common law...
...It is not surprising, therefore, that the country was shocked when the long-delayed opinions were handed down, and it was pound that the court had adopted the (13) 173 Fed...
...The act is not limited to unreasonable restraints but embraces all direct restraints...
...Justice Field, who had previously dissented, having resigned, his place was taken by Mr...
...To amend the anti trust act, as suggested by this bill, would be to entirely emasculate it, and for all practical purposes render it nugatory as a remedial statute...
...1. EVERY contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal...
...The act may be termed revolutionary, because, before its passage, the courts had recognized a 'restraint of trade' which was held not to be unfair, but permissible, although it operated in some measure to restrict competition...
...Equally true is it that this court, in applying the statute, must follow the decisions of the Supreme Court...
...Some of such contracts have been held void and unenforceable in the courts by reason of their restraint being unreasonable, while others have been held valid because they were not of that nature...
...ably restrain, it is valid under the general law, the decision substantially, is that the act of Congress is a departure from the general principles of law, and by its terms destroys the right of individuals or corporations to enter into very many reasonable contracts...
...The report of the Trans-Missouri case shows a dissenting opinion delivered in that case, and that the opinion was concurred in by three other members of the Court.— It was after a full discussion of the questions involved and with the knowledge of the views entertained by the minority as expressed in the dissenting opinion, that the majority of the Court came to the conclusion it did...
...STILL FRESH in the minds of all of us are the Standard Oil and Tobacco Trust decisions of the United States Supreme Court...
...The mass of people are slower to realize the full significance of these decisions, but that realization is certain to be brought home to them soon...
...but the latter, through its control over the interpretation of the Constitution may in effect legislate without the consent of the other branches of the government, and even in opposition to them...
...The act as above construed prohibits every contract or combination in restraint of competition...
...Now the public, and especially the business public, ought to rid themselves of the idea that such a distinction is practicable or can be introduced into the statute...
...Of course, Congress could only legislate as to interstate commerce, that is, commerce which in some way involved acts or traffic in more than one state...
...It made unlawful ANY AND EVERY contract in restraint of trade, whether such contract prior to the passage of the Anti Trust statute would have been held void as in unreasonable restraint of trade, or whether it would have been held valid as not unreasonable in its restraint of trade...
...This quotation is taken from "The Spirit of American Government," by J. Allen Smith, Professor of Political Science in the University of Washington,—a book that should be studied by every person who wants to know more about the government under which he is living...
...You should not fail to read it.—Editor's Note...
...The principal conten(3) United States v. Trans-Missouri Freight Association, 166 U. S., 290, 374...
...or with foreign nations, is hereby declared illegal...
...The following quotation, from the majority opinion, (5) is also illuminating: "Contracts in restraint of trade have been known and spoken of for hundreds of years both in England and in this country, and the term includes all kinds of those contracts which in fact restrain or may restrain trade...
...The defense of reasonable restraint would be made in every case, and there would be as many different rules of reasonableness as cases, courts and juries...
...Although valid, it is nevertheless a contract in restraint of trade and would be so described either at common law or elsewhere...
...These two cases, decided in March, 1897, and October, 1898, respectively, left no doubt as to the intrepretation of the Anti-Trust Statute...
...They have also been quick to take advantage of them...
...It may be that the present anti-trust statute should be amended and made applicable only to those combinations which unreasonably restrain trade—that it should draw a line between those combinations which work for good and those which work for evil...
...the Supreme Court amended it and put it into execution in an entirely different way...
...The unlawful combinations, at which the statute was aimed were quick to perceive the significance of these decisions...
...But this proposition, I submit, is tantamount to an assertion that the act of Congress is itself unreasonable...
...disputed and are set forth by Mr...
...1901, p. 3200), in its first section, declares to be illegal 'every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations.' That declaration, ambiguous when enacted, is, as the writer conceives, no longer open to construction in the inferior federal courts...
...6440 designed among other things to effect the above mentioned purpose...
...What is its effect upon our institutions of government...
...of the learned lower Courts wherein these cases were considered...
...He makes very clear their significance...
...Opinion delivered May 16, 1911...
...United States v. American Tobacco Company, et al...
...It has been proposed, however, that the word 'reasonable' should be made a part of the statute, and then that it should be left to the court to say what is a reasonable restraint of trade, what is a reasonable suppression of competition, what is a reasonable monopoly...
...The arguments which have been addressed to us against the inclusion of all contracts in restraint of trade, as provided for by the language of the act, have been based upon the alleged presumption that Congress, notwithstanding the language of the act, could not have intended to embrace all contracts, but only such contracts as were in unreasonable restraint of trade...
...Congress wrote the Anti-Tru»t law in one way...
...later it was transferred to the Judiciary Committee of the Senate...
...That impolicy is not so clear, nor are the reasons for the exception so potent as to permit us to interpolate an exception into the language of the act, and thus materially alter its meaning and effect...
...11) 164 Fed...
...Every person who shall make any such contract or engage In any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and on conviction thereof, shall be punished by fine not exceeding $5,000...
...This we cannot and ought not to do...
...In our country, however, much the larger part of commerce is interstate, so that the regulation of interstate commerce in a large measure, regulates the entire subject...
...There have heretofore been in effect two arguments of precisely the same questions now before the Court, and the same arguments were addressed to us on both those (5) 166 U. S. 328...
...Justice White makes this very clear in his dissenting opinion...
...I venture to think that this is to put into the hands of the court a power impossible to exercise on any consistent principle which will insure the uniformity of decision essential to good judgment...
...It must be constantly borne in mind that the cases dealt with on this branch of the discussion, are those decided by the most eminent courts of last resort in the country, and whatever vices appear in the construction of statute by these courts, are multiplied many times in the decisions of inferior courts...
...With the above opinion of Mr...
...construction of the statute so often rejected and condemned by every department of the government...
...Justice Coxe said: (11) "The anti-trust act embraces and declares to be illegal every contract combination or conspiracy, in whatever form, of whatever nature and whoever may be the parties to it, which directly or necessarily operates in restraint of interstate or international trade or commerce...
...Justice White likewise was, that the statute above quoted should be read as though the word "unreasonable" or "undue" had been inserted before the word "restraint," thus making the statute read: "Every contract, combination in the form of trust or otherwise er conspiracy in unreasonable or undue restraint of trade or commerce among the several states or foreign nations is hereby declared to be illegal...
...Justice Peckham, writing for the majority of the Court said: "As a result of this review of the situation, we find two very widely divergent views of the effects which might be expected to result from declaring illegal all contracts in restraint of trade, etc...
...It is not amiss, before examining the decisions of the Supreme Court itself in these cases to glance at the decisions (i) :Senate Report 8'48, p.10...
...Criminal prosecutions would not lie and civil remedies would labor under the greatest doubt and uncertainty...
...a commercial transaction entirely within a state would be subject to the laws of that state, and not to the larws of the United States...
...tion on the part of the railroads in that case was, and the principal contention in the opinion of Mr...
...The issue thus made as to the proper construction ef this statute between the majority and minority of the court is clear...
...They point with force to certain notorious trusts as having grown into power through criminal methods by the Use of illegal rebates and plain cheating, and by various acts utterly violative of business honesty and morality, and urge the establishment of some legal line of separation by which 'criminal trusts' of this kind can be punished, and they, on the other hand, be permitted under the law to carry on their business...
...S. Comp...
...p. 711...
...Finally, after various other applications had failed, on April first, 1908, Senator Warner introduced Senate Bid No...
...Rule of Law Had Become Well Settled IT WAS in this well settled state of the law that the Standard Oil and Tobacco Trust cases were presented to the Supreme Court of the United States in May, 1911...
...IF the act ought to read as contended for by defendants, Congress is the body to amend it and not this court, by a process of judicial legis-legislation wholly unjustifiable...
...This union of sovereign legislative authority and ordinary judicial functions in the same independent body is a significant and dangerous innovation in government...
...But these are all legislative, and not judicial, questions...
...7) In that report it is said: "The anti trust act makes it a criminal offense to violate the law, and provides a punishment both by fine and imprisonment...
...Then what will THEY do about it...
...one side predicting financial disaster and ruin to competing railroads, including thereby the ruin of shareholders, the destruction of immensely valuable properties, and the consequent prejudice to the public interest...
...Mr...
...Taft Expresses Alarm PRESIDENT TAFT, in a special message to Congress said: (8) "Many people conducting great businesses have cherished a hope and belief that in some way or other a line may be drawn between 'good trusts' and 'bad trusts,' and that it is possible by amendment to the anti-trust law to make a distinction under which good combinations may be permitted to organize, suppress competition, control prices, and do it all legally if only they do not abuse the power by taking too great profit out of the business...
...If the necessary effect of a contract, combination, or conspiracy is to stifle, or directly and substantially to restrict, free competition in commerce among the states, or with foreign nations, it is a contract, combination, or conspiracy in restraint of that trade, and it violates this law...
...Certainly under the present anti-trust law no such distinction exists...
...The act as it exists is clear, comprehensive, certain and highly remedial...
...affirmed without opinion, 89 Fed...
...It is to thrust upon the courts a burden that they have no precedents to enable them to carry, and to give them a power approaching the arbitrary, the abuse of which might involve our whole judicial system in disaster...
...3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States, or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Colmbia...
...When the Standard Oil Case was before the United States Circuit Court of Appeals, in 1909, the question of the construction of the Anti-Trust act was considered in the light of the (9) United States v. Joint Traffic Association, 76 Fed...
...The Joint Traffic Association case above referred to also originated in that court and had been decided in favor of a construction of the statute substantially the same as that contended for by the minority members of the Supreme Court when the case finally reached that tribunal on appeal...
...Supreme Court Rejects the Word "Unreasonable" SHORTLY AFTER the Anti-Trust Act of 1890 was passed, the United States brought an action to declare void as contrary to the act, a contract, made between a large number of railroads, intended to secure uniform classification of rates and to prevent secret cutting of rates, and for other purposes therein stated...
...What Congress Puts Into the Anti-Trust Act In 1890 Congress passed what is known as the Anti-Trust Act...
...This act provides: "Every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the several states or foreign nations is hereby declared to be illegal...
...Justice Harlan, Mr...
...Roe discusses these decisions in the following article...
...Congress can legislate only with the consent of the Federal Judiciary...
...12) id...
...By the simple use of the term 'contract in restraint of trade,' all contracts of that nature, whether valid or otherwise, would be included, and not alone that kind of contract which was invalid and unenforceable as being in unreasonable restraint of trade...
...Every person who shall make any such contract or engaga in any such combination or conspiracy shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court...
...9) When the American Tobacco Company case, therefore, came before the same Court, in November, 1908, the members of the Court were mindful of their reversal in the Joint Traffic case...
...What one court or jury might deem unreasonable another court or jury might deem reasonable...
...Justice Peckham, Chief Justice Fuller, Mr...
...It may be that the evils in the existing situation should be left to the remedies afforded by the laws of trade...
...2. Every person who shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several states, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a fine not exceeding $5,000., or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court...
...And while the same technical objection does not apply to civil prosecutions, the injection of the rule of reasonableness or unreasonableness would lead to the greatest variableness and uncertainty in the inforcement of the law...
...Under the guise of an independent judiciary, we have in reality an independent legislature, or rather an independent legislative and judicial body combined...
...26 Stat...
...Justice Brown concurred...
...Mr...
...Disregarding various dicta and following the several propositions which have been approved by successive majorities of the Supreme Court, this language is to be construed as prohibiting any contract or combination whose direct effect is to prevent the free play of competition, and thus tend to deprive the country of the services of any number of independent dealers however small...
...Justice Noyes said: (12) "In so far as combinations result from the operation of economic principles, it may be doubtful whether they should be stayed at all by legislation...
...1) I shall close what I have to say on the subject of Judicial Legislation by an examination of these cases...
...But these are all clearly borne in mind that this court has nothing to do with the wisdom, justice, or expediency of the statute...
...When, therefore, the body of an act pronounces as illegal every contract or combination in restraint of trade or commerce among the several states etc., the plain and ordinary meaning of such language is not limited to that kind of contract alone which is in unreasonable restraint of trade, but all contracts are included in such language and no exception or limitation can be added without placing in the act that which has been omitted by Congress...
...As it is conceded that the contract does not unreasonably restrain trade, and that if it does not so unreason(4) 166 U. S., 344...
...In the Joint Traffic case, decided in 1898, the Court was asked to reconsider its decision in the Trans-Missouri case, decided...
...Justice White wrote a long and vigorous dissenting opinion, but he was then in the MINORITY...
...Justice Harlan, in his opinion in the Standard Oil Case, as follows: "All who recall the condition of the country in 1890 will remember that there was everywhere among the people generally a deep feeling of unrest...
...WHILE THESE ARTICLES were in preparation, two cases were decided by the Supreme Court of the United States, which well illustrate the subject here discussed...
...Justice Brewer and Mr...
...Our Supreme Court thus has what virtually amounts to the power to enact as well as the power to annul...
...In other words, we are asked to read into the act by way of judicial legislation an exception that is not placed there by the lawmaking branch of the Government, and this is to be done upon the theory that the impolicy of such legislation is so clear that it cannot be supposed Congress intended the natural import of the language it used...
...As thus construed the statute is revolutionary...
...To inject into the act the question of whether an agreement or combination is reasonable or unreasonable would render the act as a criminal or penal statute indefinite and uncertain, and hence, to that extent, utterly nugatory and void, and would practically amount to a repeal of that part of the act...
...It may be that the policy evidenced by the passage of the act itself will, if carried out, result in disaster to the roads and in a failure to secure the advantages sought from such legislation...
...After most elaborate arguments, however, the theory of construction which involved interpolating into the statute the word "unreasonable" or its equivalent word "undue" was rejected...
...2) The reasons which led to the passage of this Act are un(1) Standard Oil Company of New Jersey, et al, Appellants v. United States...
...2) Sec...
...The entire act, so far as material, is given in the margin...
...It was necessary to the determination of this case, to decide whether the word "unreasonable" could be read into the statute, for it was not found that the contract condemned was in unreasonable restraint of trade...
...In these decisions are to be found the most amazing examples of judicial legislation...
...209 c. 657...
...Upon this point the opinion of the majority of the Court in the Joint Traffic Case, says: (p.573) "Finally we are asked to reconsider the question decided in the Trans-Missouri case, and to retrace the steps taken therein, —The Court is asked to reconsider a question but just decided after a careful investigation of the matter: involved...
...He says: (4) "The theory upon which the contract is held to be illegal is that even though it be reasonable, and hence valid, under the general principles of law, it is yet void, because it conflicts with the act of Congress already referred to...
...or by imprisonment not exceeding one year, or by both said punishments In the discretion of the court...
...A Dangerous Innovation" HERE IS what a student of our governmental institutions has to say about "the tendency toward judicial legislation: "Through the sole right to exercise this power (to interpret the Constitution) our Federal Judiciary has become in reality the controlling branch of our government...
...Under these circumstances we are, therefore, asked to hold that the act of Congress excepts contracts which are not in unreasonable restraint of trade, and which only keep rates up to a reasonable price, notwithstanding the language of the act makes no such exception...
...Those interested in having the word "unreasonable" or "undue" read into the Anti Trust statute, after these decisions, turned their attention to Congress and applied as unsuccessfully to Congress as they had to the Courts to procure the aboVe suggested modification of the statute...
...Soon after the decision, a petition for a rehearing of the case was made supported by a printed argument in its favor and pressed with an earnestness and vigor and at a length which were certainly commensurate with the importance of the case...
...A Shock to the Country FROM THE FOREGOING review of the authorities, it conclusively appears that when the appeals' of the Standard Oil Company and the American Tobacco Company were decided in the Supreme Court, in May, 1911, that Court had three times decided against the construction of the Anti-Trust Statute contended for by those companies, the inferior federal courts had followed and adopted the ruling of the Supreme Court, the Congress of the United States and the President of the United States had said that the construction of the statute declared by the Supreme Court in its majority opinions above noted was sound and wholesome and that the construction contended for by the companies would have made the statute "nugatory" and might, so said the President, "involve our whole judicial system in disaster...
...Supreme Court Again Refuses to Restrict the Law AYEAR OR SO AFTER the Freight Association, or Trans-Missouri, case above noted, another case arose, usually called the Joint Traffic Case, involving substantially the same sort of a contract between railroads as that involved in the Freight Association case, and was decided by the Supreme Court in the same way...
...while on the other side predictions equally earnest are made that no such mournful results will follow, and it is urged that there is a necessity, in order that the public interest may be fairly and justly protected, to allow free and open competition among railroads upon the subject of the rates for the transportation of persons and property...
...Interests Then Turn to Congress THE COURT further said that it had again listened to the same arguments in the case under consideration and again reached the same conclusion...
...the nation had been rid of human slavery—fortunately, as all now feel—but the conviction was universal that the country was in real danger from another kind of slavery sought to be fastened on the american people, namely, the slavery that would result from aggregations of capital in the hands of a few individuals and corporations controlling, for their own profit and advantage exclusively, the entire business of the country, including the production and sale of the necessaries of life...
...1020 (10) 164 Fed...
Vol. 3 • July 1911 • No. 28
