---

The temporary injunction granted by Judge Grosscup, of the United States Circuit Court, in Chicago last week against the combination of packing-houses known as the Beef Trust, will renew popular faith in the vitality of the Sherman Anti-Trust Law in the hands of an administration bent upon enforcing its provisions. Since the decision of the Supreme Court, in the suit brought for the dissolution of the Sugar Trust, that the act did not reach such a combination of manufacturers — as its provisions were directed only against monopolies in inter-State trade — the opinion has widely prevailed that the Sherman Act was valueless except against combinations of inter-State railroads and other carriers. The text of the Sugar Trust decision, however, did not warrant so pessimistic a conclusion, as the Court merely affirmed that the Sugar Trust's purchase of competing refineries in different States bore no direct relation to inter-State commerce, and therefore could not be prevented "in the mode attempted." Later decisions of the Federal Courts, in the bases of combinations controlling the sale in different States of cast-iron pipes (Addyston Pipe and Steel Company) and of coal (Coal Dealers' Association of California), have affirmed that such combinations come within the scope of the Sherman Act, and are in violation of its provisions. Judge Grosscup's decision last week, in a case far more important than either of these just mentioned, puts in striking terms the wide range of business transactions which cannot be restrained by a combination without violating the Sherman Act. In the eye of the law, said Judge Grosscup —

commerce is not restricted to specific acts of sale or exchange. It includes the intercourse, all the initiatory and intervening acts, instrumentalities, and dealings, which directly bring about the sale or exchange. Thus, though the sale or exchange is a commercial act, so also is the solicitation of the drummer … [lacuna in text] … commerce, thus broadly defined, is between parties dealing from different States, to be effected so far as the immediate act of exchange goes by transportation from State to State, it is "commerce between the States," within the meaning of the Constitution and the statute known as the Sherman Act.

Turning from the general principle thus lucidly stated to the combination of the packing-houses, the Court finds that both in the purchasing of cattle and in the sale of meat the houses engage in inter-State commerce. Inasmuch, therefore, as they are indicted for requiring their purchasing agents not to bid against each other, for bidding up, through their agents, the price of live stock for a few days to induce large shipments and then ceasing from bids when the shipments arrive, for agreeing upon prices, cartage charges, and the like, and for making agreements with transportation companies for discriminating rates, Judge Grosscup holds that their combination is within the reach of the Sherman Anti-Trust Law, and must be enjoined pending a trial as to the truth of the averments in the indictment.

---

JUDGE GROSSCUP'S ADDRESS

Judge Grosscup, who rendered this decision, has recently delivered before the students of the University of Michigan an address which seems to us to constitute both a new and a valuable contribution to the solution of our industrial problem. This address is so compact that it is difficult to give anything more than a hint as to its suggestion, which is what we here attempt to do: — A process of industrial consolidation is going on, in which the control of industry is rapidly narrowing, and the mass of the people are coming to be lookers-on or participants in industries in which they have no proprietorship. At the same time the people are growing in wealth — that is, in financial ability to have a share in the proprietorship. This is shown by a comparison of the growth of population, the growth of general wealth, and the growth of bank deposits. For example, from 1880 to 1890 the growth of population was about 20 per cent., the growth of general wealth about 25 per cent., the growth of bank deposits about 73 per cent. Again, from 1890 to 1900 the growth of population was about 20 per cent., of the general wealth about 23 per cent. "Can any one explain this disproportion of the growth of uninvested capital — a disproportion beginning with activity in consolidation, and rising rapidly as consolidation increased — except upon the inference that the people, having little confidence in existing trust organization, have been thus cut out from ownership in the industries of the country?… Showing as they do that the people at large are with drawing from ownership in the industries of the country, they point to a time in the near future, if the present methods of consolidation go on, when, barring the shopkeeper, the farmer, and the owner of city real estate, and barring the man who is willing to take chances upon an unknown venture, there will be but comparatively few proprietors among the run of citizens who ordinarily would be interested in the country's industries." It is true that these bank deposits furnish most of the capital upon which modern consolidation depends. But this does not give the people control of the industries. They are simply lenders of the capital on which the industries are carried on, and they get no other interest in the country's advancing prosperity except the interest on their deposits, which is less than was ever paid before. These facts are giving rise to widespread and increasing discontent among men of moderate capital, a feeling that somehow they have been deprived of their fair share in the rewards of industrial enterprise, and a growing inclination toward some form of Socialism, involving to a greater or less extent public ownership of most if not all means of production and distribution — a scheme which, in Judge Grosscup's opinion, is opposed to the fundamental and underlying conception of American life, and the secret of its real prosperity, the principle that "the man is everything, the State only an instrument for his protection and advancement." Thus "the separation of labor from proprietorship — the separate mobilization of these two forces as enemies instead of their commingling in common interest — is the most unrepublican and menacing fact that now confronts the American people." For if consolidation leading to monopoly is destructive of the Republic, in one way, Socialism, or the public ownership and the political organization of industry, is destructive in another. Socialism would "merge business into politics, and transfer industrial leadership from the men who think to the men who can pull wires and play the demagogue."

---

THE REMEDY

The remedy for these perils, according to Judge Grosscup, lies, not in the destruction of our industries, not in the arresting of their development, not in the transfer of industrial activities to the State, making them a political function, but in a process which will — to coin a word — "people-ize" the industries. This can be done by bringing the industries under such Government supervision and control as will make them safe subjects for public investment. "I believe that once corporate organization and management is then cleared of thimblerigging and pitfalls, so that the fortunes of an enterprise will be bound up, not in an overstrained organization, but solely in the vicissitudes of the business itself, the American people will be found ready to take up again their share in the proprietorship of the country." This belief is founded on the following considerations: It is instinctive with the American people to acquire property. It was this instinct, as much as the desire for civil and religious liberty, that brought our fathers across the ocean, and has made their sons pioneers in building up the West. The instinct is "innate, persistent, unconquerable." The people have the means which would enable them to become the proprietors of the great industries. In the savings bank alone are accumulated nearly three billions of dollars. "This means that there is now, in the hands of the people, uninvested capital nearly sufficient to buy out, at the valuations of 1890, the existing manufactories, or the existing railroads, or one-half of the farm property of the country. It constitutes nearly one dollar in ten of all the dollars that measure the country's entire wealth; and what is more, it is available at any moment to enable the people at large to re-enter the proprietorship of the country." The owners of this capital are not afraid to invest. The fact that they have deposited this money in the savings banks shows not only that they possess the capital, but that they have faith in corporations to safeguard and to return interest on the capital. They have faith in these corporations because they are under government regulation and subject to government supervision — that is, the rights and interests of the people in them are adequately protected. All that is necessary, therefore, to transfer these deposits or a considerable proportion of them from the banks to the industrial corporations, and so transfer the control of the industrial corporations from the few capitalists to the great mass of the people who are the lenders, is to secure a recognized, uniform basis for corporate organization, a guarantee that the stock and bonds represent the real value of the corporation assets, not a fictitious value put upon them, and a provision for governmental visitation, through some proper department, so that it can guard the interests of stockholders, as they are now guarded in the National banks. The legislation already enacted by Congress is not adequate for this purpose, though it may be regarded as a movement in this direction. It is not necessary for us here, in reporting Judge Grosscup's address, to do more than add in the simplest phraseology our hearty indorsement. The churches, the schools, the government — that is, the religious, the educational, and the political institutions of the United States — are democratic in their structure. All the people are alike interested in them, all the people share in their control. What is necessary for the solution of our industrial problem is that all the people should have an interest and should share in the control of our industrial organizations. The method which Judge Grosscup has indicated seems to us far more hopeful of right results, and it is far more in accordance with the American spirit, than that State Socialism which finds its chiefest exponents in Germany.

---