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MR. NEWELL: Mr. President: I understand that I am the only member of that committee present, and I have a report that I will submit.

Report read as follows:

Your committee to whom were referred the applications of John C. Farwell, George L. Douglas and Charles P. Abbey, to be admitted as members of this Association, would respectfully report that they have examined the matters so referred to them and recommend that said applications be granted, and that said John C. Farwell, George L. Douglas and Charles P. Abbey be admitted as members of this Association.

JUDGE TULEY: I move that the report be adopted.
MR. SHERMAN: Seconded.
Which motion was carried.

VICE PRESIDENT Wood: The next in order is an address, “Trusts and their Legal Status,” by Edwin Burritt Smith. The Chair will recognize Mr. Smith who will now address you.

The address will be found in Part II.

MR. MOSES: I am not unmindful of the great importance of this subject, and as Chairman of the Law Reform Committee I said the other day that a special committee should be appointed to take this particular subject, so difficult in its bearings, into consideration in order that the Legislature when it meets again may have the measure before it—the proper measure. In stating this I am not unmindful of the depressing fact that it is the State of Illinois which alone, thus far has placed upon the statute books a law permitting all the gas companies of Chicago to concentrate, and we have today in the city of Chicago one of the worst trusts suffered by the people and not a step has been taken at the past session of the Legislature to undo the work which was done two years ago. In my capacity as a citizen of this State, as a member of the Civic Federation I traveled down to Springfield, Illinois, with Mr. Eastman, a member of this bar and also a member of the gas committee of the Civic Federation and we pleaded and pleaded with our present Attorney General to look


into this question, we furnished him briefs on the subject. He took the matter under consideration and he finally wrote to me a reply which I have never published to the people of the State of Illinois, but do so now, that he believed that the gas legislation of 1897 was constitutional, therefore the hands of the people of Illinois have been tied by the action of the Attorney General. Two years ago an effort was made by some citizens of the State to take away the great power of the Attorney General in moving in these matters, but it failed of its purpose. Now I say this because all the discussion in Illinois upon this subject is out of place as long as we permit our own Legislature to pass monopolistic laws. In 1895 by that great act the judicial history regarding trusts was revolutionized. No man can complain of the judicial department of Illinois for they did their duty faithfully in the gas trust cases. I believe it was Judge Tuley who dealt with this subject, and they abided by that decision, but they came up in some other way and finally got the people of the State of Illinois to say that that monopoly was all right, and we are paying for dollar gas by legislative sanction. Now let us be honest to ourselves; all these talks upon the subject are out of place in the State of Illinois until the people move upon the next Legislature and say that this act must be repealed. It is useless to discuss these matters as moot questions. The press of Illinois has failed in its duty in this regard. As a citizen of this State I called upon one of the editors of one of the great papers of Chicago and asked him to publish an article upon this subject and he said he could not do it. Let us be honest in this matter; if we are going to fight, fight the battle manfully and go to the core of the wrong of the thing. This battle is coming on, if it is not fought out in the courts it is going to be the political shibboleth of the parties. Let the people whose names I have mentioned give reasons for their actions. I maintain as a lawyer, that it requires very little ability to say that the gas act of 1897 is unconstitutional under the magnificent constitution


which we possess. If the people will be true to themselves the courts will be true to the people. I have never joined in the cry against the courts, that indiscriminate denunciation of the courts, whether it be the Supreme Court of the United States or our State courts. Many people have denounced the Supreme Court of the United States that it had monopolistic tendencies, but as shown in the late railroad traffic case has it not undertaken to do justice to the people? Our last legislative session passed by without ever saying a word upon the subject. You have a trust law upon the statute books, and two years ago that same combination of influence was able to minimize the effect of that trust law and you have never had one prosecution under it. In truth the people of Illinois have not been true to themselves, and all these ills will befall them justly until they become true to themselves.

MR. LESSING ROSENTHAL: I suppose that I am not in sympathy with the majority of the persons who are here, possibly not in sympathy with a majority of many persons who have expressed themselves on the subject, in saying that my own views are much at variance with those views that are usually expressed. My own views are entirely at variance with the views just expressed by the gentleman who preceded me. I believe that there is nothing wrong whatever about the gas trust law in so far as it affects the consolidation of those corporations. Prof. Henry C. Adams, the statistician of the Inter-State Commerce Commission, and one of the leading economists of the country, now professor at Ann Arbor, long ago stated, and it has been repeated again and again by leading economists, that where it is in the interest of men to com. bine no law in the world can make them compete. Now that has been amply proven and demonstrated by our experience within the last few years. The trouble with us is that we have sought to introduce competition into fields where competition can not properly exist. Take the gas trust as an illustration. Gas is almost as much a necessity as water now. The water is

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furnished to the people by the city; we allow gas to be furnished by private individuals. Now the furnishing of water is a monopoly in this city, but the benefits of it are entirely conserved to the city. The same might be done with respect to gas. Suppose that we have a dozen competing companies in this city, have they not always made an effort to combine and has it not been shown again and again that by attempting to have competition in those fields there has been enormous waste of capital? Pipes have been laid in the same street, millions of dollars have been spent in placing conduits under our streets, and then the companies afterwards combined.

Now what we should endeavor to do is not to take the wrong course of attempting to infuse competition into that field, but to take the other course and attempt to conserve for the public the benefit of this monopoly. That may be done in several ways, by regulation of prices, by state supervision, or it may be done by the community itself taking hold of such enterprises as the gas industry, or the railroad industry. They are industries in which, when capital is once invested any additional outlay of capital produces dollars in geometrical ratio. These are distinctions which courts of late years and in former years have failed to recognize. Now I say the day must come when the courts can not be so conservative and must not be behind the men who have studied these questions; can not be behind what these men have begun to realize, that competition cannot exist in those fields, but we must have consolidation and combination and our efforts and aims should be to conserve to the public the benefits of this. I think some of our decisions, some of the decisions of this State, of our highest courts in this State can not be supported on principle. Of course they have become established but they do not seem to me to be in accord with the principles of the common law. I think that if the common law is carefully investigated it will be found that combinations in reasonable restraint of trade were never


unlawful, and many of our combinations have been that. Here a few years ago the Supreme Court pronounced unlawful the Stenographers' Association I have forgotten the name of the association at the present time—but that was simply an association to regulate prices between stenographers, and the result of it was simply that stenographers employed here in our courts and at other places would receive fair compensation for their work—charge a uniform price. Some of the evils of competition were done away with by that association. That was pronounced unlawful. I think there is no basis for any such decision in the common law. I could dwell at length on these propositions at the present time. These things have been pointed out in very learned articles by such men as Prof. Dwight. I might refer to Mr. Dodge, although he has been connected with the Standard Oil Company and it might not have the weight as such articles by Prof. Dwight and others have.

And this well known case referred to by Mr. Smith, the steamship company case.—to my mind that case is not a departure from the common law; it is a departure from some of the previous decisions, but it is a case that again recognizes the principle underlying the common law and recognizes the fact that such combinations as that have come to stay, and that the courts ought not to be attempting to wipe out those things. To my mind the law should neither attempt to foster these combinations nor attempt, on the other hand, to hamper them. For the present let us study these questions and see what the result would be.

We should be observant, I do say, and say it most emphatically, because it ought to be done, our corporation laws ought to be improved; we ought to prevent such matters as specula. tion in stock by the officers of the corporation. Take the case of the Whisky Trust, when the receivers were appointed, Joseph B. Gruenhutt was at that time found to be short 15,000 shares of the capital stock of the Distilling and Cattle Feeding

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