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The Changing Order 
 
 Essays on Government, Monopoly, and 
 
 Education, Written during a Period 
 
 of Readjustment 
 
 By 
 George W. Wickersham 
 
 Sometime Attorney-General of the United States 
 
 G. P. Putnam's Sons 
 
 New York and London 
 
 $be fmicketbocfter press 
 
 1914 
 
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 Copyright, 1914 
 
 BY 
 
 GEORGE W. WICKERSHAM 
 
 Ube fmfcfcerbocfcer Qvces, flew Ifforft 
 
PREFACE 
 
 THESE essays are bi-products of the writer's 
 work as head of the United States Depart- 
 ment of Justice during the four years from March 
 5, 1909, to March 5, 19 13. That period was 
 instinct with great problems. New conceptions of 
 the relation of government to industrial organiza- 
 tion were asserting themselves; new theories of 
 government finding expression. The old order 
 was changing. The epochal litigation between the 
 government and great industrial combinations 
 culminated in a series of decisions rendered in cases 
 argued during that period in the Federal Supreme 
 Court. By these decisions, the supremacy of law 
 and government over monopoly was established. 
 During the same period, the laws regulating 
 common carriers in interstate commerce were radi- 
 cally amended, and these laws, and great questions 
 arising out of them, also were brought to the 
 Supreme Court for construction and exposition. 
 The admission of the territories of New Mexico 
 and Arizona into the Union gave rise to the 
 discussion at the National Capitol of profound 
 modifications in constitutional government as it 
 had been theretofore understood and practised. 
 These changes were being embodied in new con- 
 stitutions of some of the western States. Their 
 
 »<0 
 
iv Preface 
 
 inclusion in the constitutions of the new States, 
 presented to the Congress for approval, compelled 
 a consideration of the meaning of the words 
 " republican form of government," as used in the 
 Constitution of the United States. 
 
 The following essays, which originally were pre- 
 pared for delivery as addresses on special occasions, 
 reflect the conflict of ideas involved in the discus- 
 sion of these questions — problems which go to the 
 very roots of civilized government. It is because 
 of the vital nature of the problems discussed, rather 
 than of any especial merit, literary or otherwise, in 
 the essays, that I venture to hope that what I have 
 written may be of more than ephemeral interest. 
 Constant requests for copies of some of these 
 papers have encouraged me to publish this collec- 
 tion. For while the old order indeed changeth, 
 yet I verily believe there are some fundamental 
 truths concerning government which have stood 
 the test of time, and which cannot be ignored 
 without unhappy consequence. What some of 
 those principles are, I have endeavored to show 
 in the following pages. 
 
 G. W. W. 
 
 New York, 
 April, 1 914. 
 
CONTENTS 
 
 CHAPTER PAGE 
 
 I. — The Progress of Law i 
 
 II. — The State and the Nation . . 17 
 
 III. — College Men and Public Questions 30 
 
 IV. — Palimpsests 38 
 
 V. — Business and the Law . . .53 
 
 VI. — Engineering and Culture . . 71 
 
 VII. — The Study of Law and the Work 
 
 of Lawyers .... 82 
 
 VIII. — Recent Interpretation of the 
 
 Sherman Act . . . .103 
 
 IX. — Further Regulation of Interstate 
 
 Commerce 143 
 
 X. — Results of the Trust Dissolution 
 
 Suits 162 
 
 XL — Federal Control of Stock and Bond 
 
 Issues by Interstate Carriers . 179 
 
 XII. — New States and Constitutions . 217 
 
 XIII. — The Theory of Constitutional 
 
 Government in 1787 and 19 12 . 269 
 
The Changing Order 
 
 i 
 
 THE PROGRESS OF LAW 1 
 
 IT is related by Herodotus that after the deposi- 
 tion of the usurper who seized the throne of 
 Cambyses, King of Persia, the three leaders of the 
 successful movement debated as to the form of a 
 permanent government for that country. Otanes, 
 who contended for a democracy, finding himself 
 in the minority, proposed to yield his preferences 
 to the other two, on condition that neither Megaby- 
 zus nor Darius should reign over him or any of 
 his posterity; which being assented to, he made 
 no further opposition to the establishment of a 
 monarchy, and the historian adds : 
 
 At the present period this is the only family in 
 Persia which retains its liberty, for all that is required 
 of them is not to transgress the laws of the country. 2 
 
 1 Address before the George Washington University, Wash- 
 ington, D. C, February 22, 19 10. 
 
 3 Herodotus, Beloe's translation, Book 3, p. 165. 
 
 1 
 
2 The Changing Order 
 
 This conception of liberty under law, usually 
 regarded as the product of northern independence 
 of character, and by many, as peculiarly an Anglo- 
 Saxon inheritance, thus appears to be of much 
 greater antiquity, and although often obscured, 
 sometimes for prolonged periods, it has ever re- 
 curred as the highest ideal of civilized human 
 society. 
 
 Herodotus does not explain to us in what respect 
 the liberty guaranteed to Otanes and his descen- 
 dants differed from that of the other inhabitants 
 of Persia, for, it will be observed, he considers that 
 the family of Otanes enjoyed liberty because all 
 that was required of them was that they should 
 not transgress the laws of the country; but as he 
 does state that the first act of Darius, after he was 
 proclaimed King, was to divide Persia into twenty 
 provinces, and to fix an amount of annual tribute 
 which each was to pay to him, it would seem that 
 the historian meant to indicate a distinction be- 
 tween government and law, and to imply that, 
 while subject to the law, the favored family was 
 relieved from the burdens of government. 
 
 Mr. James C. Carter, in his work on Law and 
 its Origin, maintains 
 
 that while Legislation is a command of the Sovereign, 
 the unwritten Law is not a command at all ; that it is 
 not a dictate of Force but an emanation from Order; 
 that it is that form of conduct which social action 
 necessarily exhibits, something which men can neither 
 enact nor repeal, and which advances and becomes 
 
The Progress of Law 3 
 
 perfect pari passu with the advance and improvement 
 of society. * 
 
 Mr. Carter was a profound student of the Eng- 
 lish common law, and a strong believer in the value 
 of customary or common law, as opposed to statute 
 law, considering that those customary rules of 
 conduct which are the result of the moral con- 
 sciousness and progressive thought of a people, af- 
 ford a better working basis for the government 
 of a civilized state, than do rules of conduct pre- 
 scribed by legislative authority. It is the function 
 of the judges, he says, 
 
 to watchfully observe the developing moral thought, 
 and catch the indications of improvement in customary 
 conduct, and enlarge and refine correspondingly the 
 legal rules. In this way, step by step, the great 
 fabrics of common law and equity law have been 
 built up without the aid of legislation, and the process 
 is still going on. 2 
 
 Yet he recognizes the necessity for the employ- 
 ment of legislative action, or what he calls "the 
 conscious agency of society," in the improvement 
 of the law in its application to the constantly 
 developing and increasingly complex forms of mod- 
 ern existence; insisting, however, that the sole 
 function both of law and of legislation is "to se- 
 cure to each individual the utmost liberty which 
 he can enjoy consistently with the preservation of 
 
 'Pp. 344-5. 'P. 329. 
 
4 The Changing Order 
 
 the like liberty to all others," and adding, that 
 every abridgment of liberty demands an excuse, 
 and that its only good excuse is the necessity of 
 preserving it. * 
 
 It is the acknowledged duty of all good citizens 
 to obey the law, be that law written or unwritten. 
 The unwritten law, representing, as it does, a 
 generally prevailing public conception of right 
 action, must necessarily command the readiest 
 obedience; statutory laws too frequently embody 
 the ill-considered views of a moment, the expres- 
 sion of a temporary emotion, or the successful 
 determination of a portion of the community to 
 impose their will upon the remainder. The sound 
 growth and development of the written law must 
 follow and make more specific and more readily 
 enforcible the principles of unwritten law, or it 
 becomes an instrument of dissatisfaction and even 
 of oppression. Yet no progress in the improve- 
 ment of laws is realized through either evasion of 
 or organized opposition to the laws of a self-govern- 
 ing people. As Washington said in his farewell 
 address : 
 
 The very idea of the power and the right of the 
 people to establish government presupposes the duty 
 of every individual to obey the established govern- 
 ment. 
 
 All obstructions to the execution of the laws, all 
 combinations and associations under whatever plaus- 
 ible character, with the real design to direct, control, 
 
 T P.337. 
 
The Progress of Law 5 
 
 counteract, or awe the regular deliberation and action 
 of the constituted authorities, are destructive of this 
 fundamental principle and of fatal tendency. . . . 
 
 However combinations or associations of the above 
 description may now and then answer popular ends, 
 they are likely in the course of time and things to 
 become potent engines by which cunning, ambitious, 
 and unprincipled men will be enabled to subvert the 
 power of the people, and to usurp for themselves the 
 reins of government, destroying afterwards the very 
 engines which have lifted them to unjust dominion. 1 
 
 The history of every civilized state presents 
 many points of resemblance with that of every 
 other. Primitive communities are bound together 
 more or less loosely, dependent upon the need of 
 union for common defense against some external 
 enemy. As civilization progresses, a necessity 
 arises for rules to govern the action of the indi- 
 viduals in the community toward each other, more 
 than to protect the group against the aggressions 
 of other groups ; and as communities become more 
 populous, and civilization more complex, rules of 
 conduct must needs be increasingly minute and 
 specific ; but the fundamental principle guiding all 
 successful civilization must be to preserve, in as 
 large a measure as is consistent with the welfare 
 of the whole, freedom of action in the individual. 
 In monarchical countries this freedom is menaced 
 more from the head of the state than from other 
 individuals in it. Under democratic governments, 
 
 1 Messages and Papers, vol. i., p. 218. 
 
6 The Changing Order 
 
 the individual requires more protection against 
 other individuals or groups of individuals ; yet the 
 abuse of monarchical power has often resulted in 
 the same injury to the welfare of individuals as 
 is occasioned by abuse of the power which, under 
 democratic institutions, individuals or groups of 
 individuals may acquire over other individuals or 
 groups. 
 
 Queen Elizabeth of England, between the six- 
 teenth and forty-third years of her reign, partly for 
 the purpose of raising revenue, and partly to re- 
 ward her favorites, granted a very large number of 
 patents, conferring upon their holders the exclusive 
 privilege or monopoly for designated periods of time, 
 to manufacture, sell, or deal in specified articles of 
 commerce. The injury to the community caused 
 by these special privileges became so great as 
 finally to produce a most remarkable and spon- 
 taneous outbreak both in and out of Parliament, 
 which led to a complete and absolute disavowal by 
 the Queen of any intention to afflict her subjects, 
 the cancellation of the greater part of these patents, 
 and the submission to the judgment of the courts 
 of law of the validity of the remainder. The 
 odious character of these monopolies in the view 
 of the English people of that day , is vividly depicted 
 in the debates of the time. The list of the objects 
 of the monopolies is truly appalling. They em- 
 braced the exclusive right to deal in such articles 
 as iron, powder, cards, leather, cloth, ashes, vin- 
 egar, sea coals, steel, brushes, saltpeter, and many 
 
The Progress of Law 7 
 
 others. One Dr. Bennet, during a discussion in 
 Parliament, is recorded as saying : 
 
 In respect of a grievance out of the City for which 
 I come, I think my self bound to speak that now 
 which I had not intended to speak before; I mean a 
 Monopoly of Salt. It is an old Proverb Sal sapit 
 omnia; Fire and Water are not more necessary. But 
 for other Monopolies of cards, (at which word Sir 
 Walter Raleigh blusht), Dice, Starch and the like, 
 they are (because Monopolies) I must confess very 
 hurtful, though not all alike hurtful. I know there is 
 a great difference in them; And I think if the abuses 
 in this Monopoly of Salt were particularized, this 
 would walk in the fore rank. 
 
 He was followed by another member who se- 
 verely criticized the monopoly in tin. This brought 
 Sir Walter Raleigh to his feet. He could have 
 contented himself with blushes concerning cards, 
 but the attack on the Tin Monopoly compelled 
 him to speak. The arguments he resorted to in 
 its defense have become familiar to later genera- 
 tions. 
 
 When the Tinn is taken out of the Mine, and melted 
 and refined [he said], then is every piece containing 
 one hundred weight sealed with the Duke's Seal. 
 Now I will tell you, that before the granting of my 
 Patent, whether Tinn were but of seventeen shillings 
 and so upward to fifty shillings a hundred, yet the 
 Poor Workmen never had above two shillings the 
 week, finding themselves: But since my Patent, 
 
8 The Changing Order 
 
 whosoever will work, may; and buy Tinn at what 
 price soever, they have four shillings a week truly 
 paid. There is no Poor that will work there, but may, 
 and have that wages. Notwithstanding, [he declared, 
 evidently perceiving that the argument fell upon deaf 
 ears] if all others may be repealed, I will give my 
 consent as freely to the cancelling of this, as any 
 Member of this House. 1 
 
 Elizabeth was no less shrewd than Raleigh in 
 understanding the temper of the time, and with a 
 clear perception that the public conscience was 
 against her, she disclaimed all purpose of afflicting 
 her subjects, declared she had acted upon bad 
 advice, and authorized her minister, Cecil, to 
 inform the House that 
 
 There are no Patents now of force, which shall not 
 presently be revoked; for what Patent soever is 
 granted, there shall be left to the overthrow of that 
 Patent, a Liberty agreeable to the Law. There is no 
 Patent if it be Malum in se, but the Queen was ill ap- 
 prised in her Grant. But all to the generality be 
 unacceptable. I take it, there is no Patent whereof 
 the Execution hath not been injurious. Would that 
 they had never been granted. I hope there shall 
 never be more. (All the House said Amen,) 2 
 
 Therefore, declared Cecil — 
 
 there shall be a Proclamation general throughout the 
 Realm to notify her Majesties resolution in this be- 
 
 1 D'Ewes, Journals of the Parliaments, pp. 645-6. 
 'Id., p. 652. 
 
The Progress of Law 9 
 
 half. And because you may eat your meat more 
 savourly than you have done, every man shall have 
 Salt as good cheap as he can either buy it or make it, 
 freely without danger of that Patent, which shall be 
 presently revoked. . . . And they that have weak 
 stomachs, for their satisfaction, shall have Vinegar 
 and Alegar, and the like set at liberty. Train Oyl shall 
 go the same way; Oyl of Blubber shall march in equal 
 rank; Brushes and Bottles endure the like Judgment. 
 . . . Those that desire to go sprucely in their Ruffs 
 may at less charge than accustomed obtain their wish ; 
 for the Patent for Starch, which hath so much been 
 prosecuted, shall now be repealed. 1 
 
 In the year following these debates, in the great 
 case of The Monopolies, it was held by the Court 
 of Queen's Bench that a patent granted by Queen 
 Elizabeth, to Ralph Bowes, Esq., conferring on 
 him the sole and exclusive right to make and sell 
 playing cards within the realm for a term of years, 
 was utterly void for two reasons: (1) that it was a 
 monopoly and against common law; (2) that it 
 was against divers acts of Parliament. It was 
 against common law because — 
 
 1. All trades, as well mechanical as others, which 
 prevent idleness (the bane of the commonwealth) 
 and exercise men and youth in labour, for the main- 
 tenance of themselves and their families, and for the 
 increase of their substance, to serve the Queen when 
 occasion shall require, are profitable for the common- 
 wealth, and therefore the grant to the plaintiff to 
 
 ^.652. 
 
io The Changing Order 
 
 have the sole making of them is against the common 
 law, and the benefit and liberty of the subject. 
 
 2. The sole trade of any mechanical artifice, or 
 any other monopoly, is not only a damage and preju- 
 dice to those who exercise the same trade, but also to 
 all other subjects, for the end of all these monopolies 
 is for the private gain of the patentees ; and although 
 provisions and cautions are added to moderate them, 
 yet ... it is mere folly to think that there is any 
 measure in mischief or wickedness: and, therefore, 
 there are three inseparable incidents to every mon- 
 opoly against the commonwealth, sc. i. That the 
 price of the same commodity will be raised, for he 
 who has the sole selling of any commodity, may and 
 will make the price as he pleases. . . . The 2d in- 
 cident to a monopoly is, that after the monopoly is 
 granted, the commodity is not so good and merchant- 
 able as it was before ; for the patentee having the sole 
 trade, regards only his private benefit, and not the 
 common wealth. 3. It tends to the impoverish- 
 ment of divers artificers, and others, who before, by 
 the labor of their hands in their art or trade, had 
 maintained themselves and their families, who now 
 will of necessity be constrained to live in idleness 
 and beggary. . . . 
 
 3. The Queen was deceived in her grant; for the 
 Queen, as by the preamble appears, intended it to 
 be for the weal public, and it will be employed for the 
 private gain of the patentee, and for the prejudice of 
 the weal public; . . .* 
 
 The principles of this great decision have been 
 recognized as immutable in all later discussions 
 1 11 Coke's Reports, 84 b. 
 
The Progress of Law n 
 
 of the subject in the law of England or America. 
 All subsequent statutes against monopolies in 
 England and America depend for their reason on 
 the principles so clearly and so quaintly set forth 
 in this judgment. In the development of our 
 modern civilization, with our boundless natural 
 wealth and our unexampled facilities of transpor- 
 tation and communication, by individual effort 
 working through the machinery of compact 
 organization, the people of the United States 
 twenty years ago found themselves confronted 
 with conditions strongly resembling those which 
 aroused the people of England and their represen- 
 tatives in Parliament to the point of revolt against 
 even so beloved a sovereign as their Virgin Queen. 
 These conditions, however, unlike those of 1601, 
 were not wholly occasioned by sovereign grant, 
 although they were in large measure the result of 
 the abuses of grants by sovereign powers of cor- 
 porate existence and the facilities of corporate 
 organization. No such comprehensive control 
 over any one of the great industries which were 
 dominated by those large aggregations of capital 
 called " trusts' ' could have been attained but 
 through the exercise of powers granted by the 
 sovereign States ; and the condition, therefore, was 
 strongly analogous to that which arose in the reign 
 of Elizabeth. True, this form of control had not 
 yet resulted in that absolute power which the 
 patentees of Elizabeth possessed over the sale of 
 salt, vinegar, and the like. But mindful that 
 
12 The Changing Order 
 
 "Eternal vigilance is the price of liberty," and to 
 employ Webster's immortal phrase, "While actual 
 suffering was yet afar off." We, like our ancestors 
 of revolutionary days, raised our arms, by the 
 peaceful method of legislation, against a power 
 which we perceived rising cloud-like on our eco- 
 nomic horizon. We saw the rapid concentration 
 of power over our great industries in a few hands ; 
 a power which no free state can long suffer to 
 endure; the power of fixing prices at will, deter- 
 mining the amount of production, dictating the 
 terms on which thousands of our fellow-country- 
 men might pursue their means of livelihood; the 
 power to exclude or permit competition ; all the ele- 
 ments of those monopolies which so stirred the 
 generation of Englishmen from whom the Pilgrim 
 Fathers came. The problem was complicated by 
 the dual nature of our government. Concerted 
 action by the States was impracticable, it may be 
 said, impossible. Efforts at control by one State 
 were evaded, first by removing to another; then 
 by the device of holding corporations. Therefore 
 the evil could not be met merely through the de- 
 velopment and application of the unwritten law, 
 although its principles clearly established the un- 
 lawfulness of all monopolies. Some means had to 
 be found through the exercise of national power to 
 check the continued concentration of control of 
 the great industrial life of the country. 
 
 In this instance, as in so many others in our 
 national history, there was found in the simple but 
 
The Progress of Law 13 
 
 comprehensive charter of our national government 
 the basis for a solution of the problem, and the 
 prevention of the further growth of these great 
 abuses, by the exercise of what Mr. Carter called 
 1 ' the conscious agency of society ' ' speaking through 
 the national legislature. 
 
 In the power conferred upon the Congress to 
 regulate trade and commerce among the States 
 and with foreign nations, there was discovered a 
 weapon adequate to the need; and the simple, 
 comprehensive enactment that all contracts and 
 combinations in restraint of interstate or foreign 
 commerce should be unlawful, and that the Fed- 
 eral courts should be empowered to enjoin and 
 restrain violations of the act, placed in the hands 
 of the national judiciary the power to stem the 
 rising tide of monopoly. 
 
 The underlying principle in this legislation is 
 the preservation of the right of the individual 
 to carry on trade and commerce, free from undue 
 control and restraint on the part of great ag- 
 gregations of individuals or capital; in a word, 
 to protect the individual from the tyranny of a 
 group. 
 
 In the development of civilization, after four 
 hundred years, in a new world, the same menace 
 to free institutions had arisen which had recurred 
 from time to time in earlier civilizations; and by 
 the application of the principles of liberty, based 
 upon the fundamental conceptions expressed by 
 the ancient Persian and recorded by Herodotus, 
 
14 The Changing Order 
 
 there was found an effective bulwark for the 
 protection of a people from industrial slavery. 
 Well might Washington say as he did in his 
 farewell message: 
 
 To the efficacy and permanency of your union 
 a government for the whole is indispensable. . . . 
 Sensible of this momentous truth, you have improved 
 upon your first essay by the adoption of a Constitu- 
 tion of Government better calculated than your 
 former for an intimate union and for the efficacious 
 management of your common concerns. This Gov- 
 ernment, the offspring of your own choice, uninfluenced 
 and unawed, adopted upon full investigation and 
 mature deliberation, completely free in its principles, 
 in the distribution of its powers, uniting security with 
 energy, and containing within itself a provision for 
 its own amendment, has a just claim to your confi- 
 dence and your support. Respect for its authority, 
 compliance with its laws, acquiescence in its measures, 
 are duties enjoined by the fundamental maxims of true 
 liberty. 
 
 The need and the purpose of our Federal Con- 
 stitution never have been more comprehensively 
 and accurately stated than in Washington's dec- 
 laration in the paragraph just read: "for an in- 
 timate union and for the efficacious management 
 of your common concerns." 
 
 It is because of the increase in the number and 
 character of our common concerns that we are 
 turning more and more to the source of national 
 power for the principles which permit of its appli- 
 
The Progress of Law 15 
 
 cation to new evils as they arise, and to the ex- 
 tension of benefits and advantages which are of 
 common concern to all; not merely to a particular 
 State or locality. 
 
 The f ramers of the Constitution were thoroughly 
 imbued with the principles of the common law, 
 and they understood the language of the law. In 
 expressing the grant of power which they agreed 
 upon to the new Federal government, they were 
 possessed by no pedantic love of minute accuracy. 
 On the contrary, they employed the broadest 
 and most comprehensive language possible to 
 express the principles which they were formulat- 
 ing, thus leaving unfettered the application of those 
 principles to the manifold and changing phases 
 which future growth and development might make 
 essential to the preservation of the fundamental 
 object of the Union; to provide "for the efficacious 
 management* ' of "the common concerns" of the 
 whole country. 
 
 Very shrewdly were these great powers devolved 
 upon the national government. Hamilton an- 
 swered the objection that they would tend to 
 render the government of the Union too powerful 
 in the seventeenth paper in the Federalist. 
 
 Speaking of the principle embodied in the Con- 
 stitution of legislating for the individual citizens 
 rather than for the States, and adverting to the 
 objection that such principles would tend to make 
 the Union too powerful and enable it "to absorb 
 those residuary authorities which it might be 
 
16 The Changing Order 
 
 judged proper to leave with the States for local 
 purposes," he said: 
 
 Allowing the utmost latitude to the love of power 
 which any reasonable man can require, I confess I am 
 at a loss to discover what temptation the persons 
 entrusted with the administration of the general 
 government could ever feel to divest the states of the 
 authorities of that description. The regulation of 
 the mere domestic police of a state appears to me to 
 hold out slender allurements to ambition. 
 
 Hamilton's mind was ever imperial! 
 
 Commerce [he continued], finance, negotiation and 
 war seem to comprehend all the objects which have 
 charms for minds governed by that passion; and all 
 the powers necessary to those objects ought in the 
 first instance to be lodged in the national depository. 
 
 And so there they were lodged by the charter 
 of our indissoluble union; and to them, as our 
 need bids, we turn for the effective vehicles of the 
 progressive development of a great and free coun- 
 try; whose laws must be adequate to cope with 
 every problem which the restless ambition of man 
 can invent, to the end that this land may ever 
 display a signal example of 
 
 Liberty and Union 
 Now and forever 
 One and inseparable. 
 
II 
 
 THE STATE AND THE NATION x 
 
 THE administration of Federal justice is the 
 most vital agency of the national govern- 
 ment. The system of Federal government tinder 
 which a separate and distinct sovereignty erects its 
 agencies and expounds, administers, and enforces 
 its laws within the States, independently of those 
 of the States, also in theory sovereign, except 
 where and to the extent that they have voluntarily 
 parted with some attribute of sovereignty, is at 
 once the admiration and the despair of foreign 
 students of our institutions, and is often a source 
 of perplexity to ourselves. 
 
 The Constitution of the United States and laws 
 and treaties made pursuant to its authority are, 
 it is agreed, the supreme law of the land, anything 
 in the constitution or laws of any State to the 
 contrary notwithstanding. But ever since the 
 foundation of the Federal government a constant 
 pressure has developed, first one way, then an- 
 other; State against nation, nation against State, 
 
 1 The substance of an address delivered at the opening of a 
 new Federal building in Cleveland, Ohio, March 20, 191 1. 
 2 17 
 
1 8 The Changing Order 
 
 to magnify or minimize the powers granted to the 
 Federal government by the Constitution. 
 
 During the last decade or two there has been a 
 growing tendency in the States to call on the na- 
 tional government for many things which are 
 properly within the functions and duties of the 
 States, but which, through the extension of certain 
 powers granted to Congress, may be also brought 
 within the scope of Federal regulation. 
 
 This tendency has been so marked, that at times 
 the States seem to have abdicated an important 
 part of their ordinary police powers, and to have 
 sought to escape their natural responsibilities by 
 devolving them upon the general government. 
 
 The principles regulating the respective powers 
 of State and Federal government are clearly stated 
 by Mr. Justice Harlan in delivering the judgment 
 of the Supreme Court in a very recent case. 
 
 There are, he says, certain fundamental prin- 
 ciples which prior decisions, to which he refers in 
 his opinion, recognize, and — 
 
 which are not open to dispute. . . . Briefly stated, 
 those principles are: That the Government created 
 by the Federal Constitution is one of enumerated 
 powers, and can not, by any of its agencies, exercise 
 an authority not granted by that instrument, either 
 in express words or by necessary implication; that 
 a power may be implied when necessary to give effect 
 to a power expressly granted; that while the Consti- 
 tution of the United States and the laws enacted 
 in pursuance thereof, together with any treaties made 
 
The State and the Nation 19 
 
 under the authority of the United States, constitute 
 the supreme law of the land, a State of the Union may- 
 exercise all such governmental authority as is con- 
 sistent with its own constitution, and not in conflict 
 with the Federal Constitution; that such a power in 
 the State, generally referred to as its police power, is 
 not granted by or derived from the Federal Consti- 
 tution but exists independently of it, by reason of its 
 never having been surrendered by the State to the 
 General Government; that among the powers of the 
 State, not surrendered — which power therefore re- 
 mains with the State — is the power to so regulate the 
 relative rights and duties of all within its jurisdiction, 
 so as to guard the public morals, the public safety 
 and the public health, as well as to promote the pub- 
 lic convenience and the common good; and that it is 
 with the State to devise the means to be employed to 
 such ends, taking care always that the means devised 
 do not go beyond the necessities of the case, have 
 some real or substantial relation to the objects to be 
 accomplished, and are not inconsistent with its own 
 constitution or the Constitution of the United States. 1 
 
 That these principles have not been always 
 clearly perceived is illustrated by the history of 
 the State of Ohio — not to mention that of other 
 States. 
 
 In the Ordinance of July 13, 1787, providing 
 for the government of the northwestern territory, 
 certain articles were formulated as "articles of 
 compact between the original States and the people 
 and States in the said territory " for the purpose of 
 
 1 House v. Mayes (219 U. S., 270, 281). 
 
20 The Changing Order 
 
 "extending the fundamental principles of civil 
 and religious liberty, which form the basis wherein 
 these republics, their laws, and constitution are 
 erected; to fix and establish those principles as 
 the basis of all laws, constitutions, and govern- 
 ments which forever hereafter shall be formed in 
 the said territory." These articles, it was de- 
 clared, should " forever remain unalterable, unless 
 by common consent/' 
 
 These articles in effect embodied those funda- 
 mental principles of civil liberty which have been 
 the woof and fabric of Anglo-Saxon institutions 
 since they were first set forth in Magna Charta: 
 principles which were also embodied in the first 
 ten amendments to the Constitution of the United 
 States, adopted in November, 1791. 
 
 The Ordinance further provided that — 
 
 The navigable waters leading into the Mississippi 
 and St. Lawrence and the carrying places between 
 the same shall be common highways and forever free 
 as well to the inhabitants of the said territory as to 
 the citizens of the United States and those of any other 
 States that may be admitted into the confederacy, 
 without any tax, impost, or duty therefor. 
 
 Freedom of trade and commerce was a matter of 
 the utmost concern on the part of the great men 
 who framed this Ordinance and the Constitution 
 of the United States, and the Jay treaty of 1794 
 secured to the subjects of both Great Britain and 
 the United States the right — 
 
The State and the Nation 21 
 
 freely to pass and repass by land or inland navigation 
 into the respective territories and countries of the 
 two parties on the continent of America (the country 
 within the bounds of the Hudson Bay Co. only 
 excepted), and to navigate all the lakes, rivers, and 
 waters thereof, and freely to carry on trade and com- 
 merce with each other. 
 
 The Ordinance of 1787 also made provision for 
 the erection of States out of the territory to which 
 it applied, whenever any of such States should have 
 60,000 free inhabitants, provided the permanent 
 constitution and State government which should 
 be formed "shall be republican and in conformity 
 to the principles contained in these articles." 
 
 That portion of the articles which dealt with 
 the government of the territory, provided for the 
 appointment of a court to consist of three judges, 
 with common-law jurisdiction, and whose commis- 
 sions should continue in force during good be- 
 havior. Among the provisions which were declared 
 to be unalterable save by common consent was 
 that — 
 
 The inhabitants of said Territory shall always be 
 entitled to the benefits of the writ of habeas corpus 
 and of the trial by jury, of a proportionate represen- 
 tation of the people in the legislature, and of judicial 
 proceedings according to the course of the common 
 law. 
 
 The principles of government embodied in the 
 Federal Constitution, adopted in 1789, were a 
 
n The Changing Order 
 
 distribution of powers among three separate co- 
 ordinate branches — legislative, executive, and ju- 
 dicial. The legislative power was to be exercised 
 by representatives of the people, and senators re- 
 presenting the States, with the participation of the 
 President, to the extent of recommending legisla- 
 tion and exercising a qualified veto over measures 
 passed in Congress. The executive officers were 
 to be chosen for definite terms, and during such 
 terms were to be free from interference by either 
 of the other branches of government, save when 
 impeached for high crimes or misdemeanors; and 
 the judicial power was to be exercised by judges 
 holding office during good behavior and free from 
 interference or control by the other branches of 
 government. An independent judiciary was re- 
 garded by the framers of the Constitution as 
 absolutely essential to the success of the govern- 
 ment created by it. 
 
 Pursuant to the provisions of the Ordinance, a 
 constitution was adopted, and the State of Ohio 
 was admitted into the Union on March i, 
 1803. Those who prepared that constitution 
 had before them as models and guides the Ord- 
 inance for the government of the northwestern 
 territory, the Constitution of the United States, 
 and the Jay treaty. But they were unable 
 to grasp the wisdom embodied in those famous 
 documents. 
 
 Rufus King, in his sketch of the history of Ohio, 
 says of this constitution : 
 
The State and the Nation 23 
 
 It was framed by men of little experience in matters 
 of state, and under circumstances unfavorable to 
 much forecast. With such a model of simplicity and 
 strength before them as the national Constitution, 
 which had just been formed, the wonder is that some 
 of its ideas were not borrowed. It seems to have been 
 studiously disregarded, and Ohio, as well as some 
 States farther westward, which her emigrant sons, 
 with filial regard, induced to follow her example, has 
 suffered ever since from a weak form of government, 
 made up in haste and apparently in mortal dread of 
 Gov. St. Clair. . . . Briefly stated, it was a govern- 
 ment which had no executive, a half-starved, short- 
 lived judiciary, and a lopsided legislature. ■ 
 
 The student of American history must con- 
 stantly wonder at finding so often developed a 
 hostile attitude toward the judiciary. Disputes 
 which can only be settled by the arbitrament of 
 independent and incorruptible judges constantly 
 arise between citizens, between States, between a 
 State and the nation. The existence of a stand- 
 ing body of judges — men of learning and character, 
 withdrawn from the ordinary pursuits of business 
 life, and independent of all influences which might 
 warp their judgment and prevent them from 
 reaching decisions based only upon the fair and 
 unbiased consideration of the law as applied to the 
 evidence in the case — would seem to be of such obvi- 
 ous advantage to every member of the community 
 that no argument were needed to demonstrate it. 
 
 1 Ohio, by Rufus King. Houghton, Mifflin & Co., 1903. 
 
24 The Changing Order 
 
 Yet in the early history of Ohio, as in the later 
 history of some of our present States and Territories, 
 from time to time waves of feeling hostile to the 
 judicial establishment arose, generally originating 
 in the resentment of some class of the community 
 to judicial decisions preventing that particular 
 class from carrying out schemes for its own ad- 
 vantage, to the detriment of the rest of the com- 
 munity. 
 
 The latest manifestation of this spirit in consti- 
 tutional provisions for the recall of judges by 
 popular vote, is, in effect, the same as that which 
 was resorted to in Ohio in 1809, as a means of 
 punishing the Common- Pleas judges who had 
 ruled that an act of the Legislature granting to 
 justices of the peace jurisdiction to try suits for 
 any amount not exceeding $50 without a jury, was 
 a violation of the right of trial by jury secured 
 by the Seventh Amendment to the Constitution of 
 the United States, in all suits at common law where 
 the value in controversy shall exceed twenty 
 dollars. 
 
 Although this decision was affirmed by the 
 Supreme Court of the State, an effort was made to 
 impeach the judges who rendered it, and when 
 this failed, resort was had, as Rufus King states in 
 his history of Ohio, "toa more efficacious course" : 
 
 The term of office was seven years, and the term 
 of seven years since the State constitution went into 
 operation was just expiring. Most of the judges had 
 been chosen much later, either as new appointments 
 
The State and the Nation 25 
 
 or to fill vacancies. It was resolved by the majority 
 in both branches of the assembly that their terms of 
 office must all be limited by the original term of those 
 who had been first appointed. The three supreme 
 judges, three president judges of the common pleas, 
 all the associate judges of that court, more than a 
 hundred in number, and all the justices of the peace, 
 were discharged at a swoop. x 
 
 The history of Ohio furnishes no repetition of 
 such an attack on the independence of the judi- 
 ciary as this, but it was many years before the 
 courts recovered from the effects of this blow to 
 their independence. Not, indeed, until after the 
 decision by the Supreme Court of Ohio, in 1887, 
 that it was empowered and in duty bound to 
 declare a law invalid if not passed in due consti- 
 tutional form, did the judiciary of Ohio take the 
 place which that branch of the government must 
 occupy, in order that republican government as 
 it was understood by the framers of the Consti- 
 tution of the United States may be accomplished. 
 
 Ohio, in common with many of the other States, 
 had her experience in resisting the supremacy of 
 the Constitution of the United States and laws 
 and treaties made in pursuance of it. In 18 19 
 she undertook to impose a tax on each of the two 
 branches of the United States Bank, and Osborn, 
 the auditor of state, summarily took from one of 
 the branches a sum of money large enough to 
 cover the tax on both. He was advised by counsel 
 
 J Ohio f Rufus King, p. 314. 
 
26 The Changing Order 
 
 that as the State could not be sued by the nation 
 he was secure from Federal redress. 
 
 But the supremacy of the national government 
 was declared, and the insufficiency of Osborn's 
 defense demonstrated, in an opinion by Chief 
 Justice Marshall, which is one of the great land- 
 marks of constitutional law. The act of the 
 Legislature of Ohio under which Osborn proceeded, 
 was declared to be in conflict with the Federal 
 Constitution and therefore void; consequently 
 Osborn's act was not the act of the State; he was a 
 mere trespasser, and as such amenable to the pro- 
 cess of the Federal court. 1 
 
 Representative republican government is founded 
 upon a practical recognition of the fact that in 
 a busy, prosperous community the average citizen 
 can give but little time to the details of his gov- 
 ernment. He therefore joins with his fellow- 
 electors in selecting representatives to frame the 
 laws by which he is to be governed, and in choosing 
 the principal officers who are to execute them. His 
 life, liberty, and property are protected from un- 
 due invasion by either branch of the government 
 by means of constitutional restrictions upon their 
 powers; and by limiting the terms for which they 
 are chosen, there is required of representatives 
 and agents alike a periodical account of their 
 stewardship. This system secures freedom from 
 undue interference during the term of office, thus 
 affording a reasonable time to work out any given 
 
 1 Osborn v. U. S. Bank, 9 Wheat., 938. 
 
The State and the Nation 27 
 
 problem, and to submit it to the test of experience 
 before it is either approved or condemned. The 
 most beautiful work of the most skilled artisan 
 presents a crude and unlovely appearance, prom- 
 ising anything but perfection, at some stage of 
 its production, and if the capacity of its author 
 and the value of the work were determined at that 
 period, neither the artist nor the work could ever 
 win approval. 
 
 Abuses of power occur under all forms of govern- 
 ment. The representatives chosen to make laws 
 for State or nation have not always been faithful 
 to their trust. The greater importance of the 
 national legislature, upon which the eyes of the 
 nation are constantly turned, has, as a rule, pre- 
 served it from the corruption and the inefficiency 
 of many of the State legislatures. The history 
 of the latter has been too often a history of venality 
 and stupidity. But is the remedy to be found in 
 the overthrow of the whole system of representative 
 government? If the head of a large commercial 
 establishment should discover that his clerks and 
 officials had disobeyed his instructions, stolen his 
 money, and impaired his fortune, would he mend 
 the case by undertaking to do all their work him- 
 self, or by so hampering his new employees with 
 restrictions and penalties and threats of instant 
 dismissal for apparent offenses, that their only 
 certainty in not offending would lie in doing 
 nothing? Can public business be carried on by a 
 system based on distrust, any better than private 
 
28 The Changing Order 
 
 business can be successfully so conducted? Is not 
 the remedy to be found rather in greater care in 
 the selection of agents and the more rigid enforce- 
 ment of their responsibilities? Political and social 
 reformers alike are prone to advocate the over- 
 throw of a system rather than the more difficult 
 task of selecting fit agents to carry on government. 
 How can any man who gives the subject a 
 moment's reflection view with indifference any 
 interference with the dignity and independence 
 of the judiciary? What are judges but impartial 
 arbitrators, to whom any one may be compelled 
 at any moment to turn for protection of life, limb, 
 or property? What will become of that protection 
 if our system of government should subject him 
 to the despoiling rage of the mob, when he asserts 
 the supremacy of law in the face of unjust clamor? 
 Who will be secure in life or property, if judges only 
 can retain their places by consulting the passing 
 fever of the crowd, instead of the laws of the land? 
 A glib, cheap answer is made by the advocates 
 of the destruction of representative government 
 when objection is made to their schemes: "You 
 do not trust the people," they say. On the con- 
 trary, it is they who do not trust the people. 
 Their whole program is based on the assumption 
 that the people are unfit or unable to choose honest 
 and faithful representatives, and therefore that 
 those whom they do select must be fettered with 
 minute instructions, deprived of any freedom of 
 action, subject to recall, and to be cast out a 
 
The State and the Nation 29 
 
 once if they do not photograph into instant action 
 every passing wave of popular feeling which may 
 be worked up as a result of misinformation or 
 inflamed prejudice. Under such a system, the 
 people abandon all self-restraint and the necessity 
 of sober second thought, based on accurate infor- 
 mation and thorough discussion, before condemn- 
 ing their servants. It would seem an affront to 
 intelligent readers to suggest even the possibility 
 of such a change in the nature of our governments, 
 State or national, were it not that in some of 
 the Western States and Territories such theories 
 have already found expression in constitutions and 
 laws; and even in our Eastern States, there are 
 not lacking those who have seized upon those no- 
 tions as a gospel which is to bring salvation as 
 to a people sitting in darkness. 
 
 Indeed, these ideas seem to have gained such cur- 
 rencyin some partsof the country , that oneis tempted 
 to exclaim, in the language of James Russell Lowell : 
 
 Is this the country that we dreamed in youth, 
 When wisdom and not numbers should have weight, 
 Seed field of simpler manners, braver truth, 
 Where shams should cease to dominate 
 In household, church, and state? 
 
 But if we reflect on the history of our country, 
 we must realize that its people are "the heirs of 
 wise tradition's widening cautious rings," and that 
 in the long run they never yet, as a nation, have 
 proved unworthy of their birthright. 
 
Ill 
 
 COLLEGE MEN AND PUBLIC QUESTIONS 1 
 
 1 ASSUME that when you invited me to be your 
 guest this evening you expected me to talk to 
 you about the relations of college men to public 
 questions. As one busied in the tremendously im- 
 portant and equally absorbing business of govern- 
 ment, I am greatly interested in meeting you who 
 are coming out into the workaday world to assume 
 your share of the duty and the privilege of making 
 efficient the conduct of our public affairs, municipal, 
 State, and national. 
 
 To be truly efficient, a government must be 
 administered honestly and wisely. How these 
 results shall be accomplished, you and men like 
 you should in large measure determine. If you 
 do not play an important part in the solution of 
 this problem, then, whatever proficiency you may 
 have attained here in your studies, whatever 
 prowess you may have displayed in athletic sports, 
 you will have failed to realize the highest aim of 
 university education. 
 
 1 Address at the annual banquet of The Daily Princetonian, 
 Princeton, N. J. f May i, 191 1. 
 
 30 
 
College Men and Public Questions 31 
 
 I congratulate you on coming out into the world 
 at this particular time in its history. Within 
 your grasp is life, and life abundantly. In the 
 words of the Psalmist, your feet are planted in a 
 large room. The world is all before you, where to 
 choose. When your fathers were graduated at the 
 university thirty-odd years ago, the thoughts of the 
 people were centered principally upon industrial 
 and business activity. The railroads were open- 
 ing up the great western country for development ; 
 mining and manufacture were being stimulated 
 by new inventions and increased facilities of 
 transportation, leading to cheapened production 
 and improved product; and the rapid progress in 
 facilities of intercommunication of thought were 
 bringing the ends of the earth into closer touch 
 with each other. The surplus population of Eu- 
 rope poured into our country, and brawny arms 
 from many lands developed our mines and carried 
 on the work of our factories. Plenty was scat- 
 tered over a smiling land. The way was open 
 for every one. If the older communities were too 
 crowded, there was room for all in the great West. 
 Industry and enterprise and intelligence found 
 ample scope; wealth was garnered in many fields. 
 The power of cooperation and organization in the 
 conduct of business has been applied during the 
 past thirty years to an extent never before dreamed 
 of. Men learned then how far-reaching a control 
 over industry and commerce could be effected 
 through organization. Commercial empires were 
 
32 The Changing Order 
 
 formed. Great fortunes were amassed in the 
 hands of a few, but prosperity came also to many. 
 What wonder that materialism became rampant 
 and that the golden calf was erected for worship 
 in the market-places ! 
 
 But the vision of truth and justice has never 
 wholly failed before the eyes of the American 
 people, and in the full flush of their highest pros- 
 perity they heard the voice of the national con- 
 science reminding them that righteousness alone 
 exalteth a nation. In the period of their greatest 
 material progress, they paused to consider whether 
 their institutions were securing justice between 
 man and man. 
 
 The laws of State and nation alike during this 
 period of great industrial progress were molded 
 to facilitate the conduct of business on a colossal 
 scale. There was nothing more natural. They 
 met the needs of the hour. True, they went be- 
 yond those needs, and, in so doing, they aroused 
 the people to a recognition of the fact that they 
 had gone too far. In the triumphal progress of 
 expanding industry and accumulating wealth, the 
 rights of individuals and of classes of individuals 
 who had but an humble share in it were not always 
 considered. Here and there occasional peaks of 
 garnered riches rose high above the plain, and like 
 the robber barons of the Rhineland, great masters 
 of capital sat enthroned upon them. But their 
 very height lifted them up where all men could see 
 and begin to question how they came there, and 
 
College Men and Public Questions 33 
 
 whether it was for the common weal that such 
 inequalities of condition should exist. 
 
 So to-day, the great question confronting you 
 as you enter upon the drama of matured life is to 
 find the means of maintaining the true balance 
 between the freedom which the individual citizen 
 must enjoy in order that he may justly prosper, 
 and the protection of the mass of the people from 
 unjust discrimination in favor of the few. 
 
 In a country whose government is based on man- 
 hood suffrage, any abuse can continue only until 
 a majority of the people are convinced that it is 
 wrong. Then there is bound to be a change. But 
 whether or not the change proposed to remedy the 
 evil is a wise one and will not result merely in 
 jumping out of the frying-pan into the fire, depends 
 upon whether or not the remedy is sufficiently 
 discussed to be thoroughly understood. The 
 first popular impulse to right a wrong often results 
 in committing another wrong. It is in putting 
 clearly before the people the nature of civic ills, 
 and the character and effect of proposed reme- 
 dies, that men who have had the benefit of sys- 
 tematic university training may best justify their 
 advantages. 
 
 Public attention has been and now is focused 
 on these wrong tendencies. Recognizing the 
 existence of evils, two classes of remedies are pre- 
 sented. One class deals with forms of govern- 
 ment and new rules of conduct, another class 
 addresses itself to a consideration of the character 
 
34 The Changing Order 
 
 of the men who make our laws and carry on our 
 public affairs. It is characteristic of our race 
 that we are more prone, in the face of civic ills, 
 to the making of new laws than to securing a better 
 class of public servants. We pass laws very much 
 as the Chinese buy a paper prayer and hang it up 
 to placate their gods. A common expression on 
 many lips is "there ought to be a law about that." 
 We are in truth a law-ridden people; and this 
 tendency is encouraged and stimulated by those 
 who seek popular favor by pointing to easy reme- 
 dies for obvious ills. Not satisfied with the ever- 
 swelling volume of statute laws, we are now urged 
 to tinker with our constitutions. There is nothing 
 new in this kind of demagoguery. Mommsen, 
 writing of the Rome of Cato's time, says: 
 
 In reality these demagogues were the worst enemies 
 of reform. While the reformers insisted above all 
 things and in every direction on moral amendment, 
 demagogism preferred to insist on the limitations of 
 the powers of the government and the extension of 
 those of the burgesses. 
 
 So in our own day, there is much clamorous 
 advocacy of measures to limit the powers of those 
 charged with the administration of our highly 
 complicated government, and to increase the 
 direct intervention of the public in the conduct of 
 its operations. 
 
 The idea that a busy, prosperous, commercial 
 people will, or can, make or administer laws better 
 
College Men and Public Questions 35 
 
 than representatives chosen from among the people 
 for the purpose, is one that is almost as old as 
 recorded history, and all recorded history proves 
 its fallacy. But it is said that in the workings of 
 representative government, representatives do not 
 represent the people. I believe that to be a 
 superficial comment. Representatives have and, 
 being human, always will, from time to time fail 
 in their duty ; but in the long run, our representative 
 bodies must and do give expression to precisely 
 what the matured thought of the majority of the 
 people demands. They may not yield at once to 
 a spasmodic and artificially stimulated emotion 
 induced by one particular class of society for its 
 own ends as against all other classes. God forbid 
 that they should! But they are inevitably con- 
 trolled in the long run by the deliberate thought- 
 out will of the people. Impatient reformers, 
 desirous of securing the prestige of immediate 
 success in the advocacy of their nostrums, chafe 
 at delays. But you, who have had the advantage 
 of learning the lessons of the past, will, I am con- 
 fident, lend your influence to the maintenance of 
 a system of government which protects the legiti- 
 mate interests of a commercial people from de- 
 struction by the sudden gusts of popular passion. 
 You will carefully examine existing laws and 
 institutions before lending your aid to their 
 overthrow. No system of law can be devised 
 that automatically will work good. All laws must 
 be administered by human agencies. The best 
 
36 The Changing Order 
 
 human agencies can only be secured by attaching 
 confidence and honor and dignity to the office. A 
 few laws easily understood are of more value 
 than a thousand laws impossible of comprehen- 
 sion. Remember the advice that Don Quixote 
 gave to Sancho Panza for his guidance in the 
 government of the island of Barataria: 
 
 Make not many proclamations; but those thou 
 makest take care that they be good ones, and above 
 all that they be observed and carried out ; for procla- 
 mations that are not observed are the same as if they 
 did not exist; nay, they encourage the idea that the 
 prince who had the wisdom and authority to make 
 them had not the power to enforce them; and laws 
 that threaten and are not enforced come to be like 
 the log, the king of the frogs, that frightened them at 
 first, but that in time they despised and mounted 
 upon. 
 
 A people as numerous as ours cannot as a body 
 lay aside their business occupations and meet in 
 the market-places, like the Athenians, to debate 
 on matters of public concern, and to enact into 
 law or executive order the result of their delibera- 
 tions. Industry and commerce will long continue 
 to engross the attention of the majority. As 
 education continues to be widespread, it is to be 
 expected that the people will take, increasingly, 
 an active, intelligent interest in public affairs. 
 But the business of governing a highly complex 
 modern civilization, so as to ensure the best results 
 
College Men and Public Questions 37 
 
 to the greatest number, will always require the 
 absolute devotion and entire attention of a large 
 number of men. Temporary abuses may be cor- 
 rected, but continuously effective government 
 cannot be conducted through the spasmodic inter- 
 vention of popular uprisings. Nor can competent 
 men for the conduct of public affairs be secured 
 if they are to be commissioned as untrustworthy, 
 subjected to constant misrepresentation, and 
 liable to be turned out branded as unfaithful 
 servants at a moment's notice for temporarily 
 unpopular acts. 
 
IV 
 
 PALIMPSESTS 1 
 
 IN extending to me the invitation of your Club 
 to be its guest this evening, your President 
 neglected to furnish me with a definite statement 
 of the aims and objects of the Club, or the record 
 of its accomplishments, leaving me to infer from 
 the name you bear, the character of the interests 
 which unite you in this organization. I, therefore, 
 have been left to speculate as to whether or not 
 you devote your meetings to the study of paleo- 
 graphy, reading the photographic copies of famous 
 palimpsests which are now sent anywhere by the 
 great libraries of Europe for the convenience of 
 scholars in other lands, or if the name of your 
 Club is merely a figurative suggestion of broader 
 human interests, leading into fields of history and 
 philosophy, far beyond the mere deciphering of 
 ancient writings. 
 
 I have preferred to adopt the latter theory, and 
 to assume that your palimpsests are the leaves in 
 the great book of human history, which each genera- 
 
 1 Address before the Palimpsest Club, Omaha, Neb., Oct. 16, 
 1911. 
 
 38 
 
Palimpsests 39 
 
 tion seeks in part to read for its own edification, 
 and in part to wipe clear of the records of previous 
 ages, in order that it may write its own story upon 
 them. 
 
 The scribes of the early Christian centuries 
 sought to erase from the parchment and vellum, 
 which then were limited in quantity and costly 
 to procure, the earlier writings which they bore, 
 without thought or care that these discarded 
 records might be of infinitely more worth to 
 humanity than those for which they had to make 
 room. They sought to expunge the thrilling 
 tales of Troy's siege — that wide expanse "That 
 deep-brow' d Homer ruled as his demesne"; the 
 treatise on the Republic, which preserves to us a 
 knowledge of the political acumen of Rome's 
 greatest orator; early Greek versions of the Chris- 
 tian gospels and epistles; that work which has 
 made the name of Euclid synonymous with Mathe- 
 matics, and many other works of lasting value; 
 and they covered the pages, once glowing with 
 the immortal language of Homer, Cicero, John, 
 Luke, or Paul, with the dry-as-dust scribblings 
 of an Ephraem Syrus and a Severus of Antioch. 
 
 But great ideas, once recorded, seldom perish! 
 Eternal truths survive; and the destructive work 
 of these pedants failed in its purpose, for what 
 they wrote was forgotten, while from under the 
 overlay of tedious monastic dialectics and incom- 
 prehensible verbiage, the eager, thirsty students 
 of "the new learning" uncovered the records of 
 
40 The Changing Order 
 
 The glory that was Greece 
 
 And the grandeur that was Rome. 
 
 Their discoveries awakened the mind of Europe, 
 as the sunshine opens the flowers. In the words 
 of Symonds, the Renaissance wrought 
 
 the recovery of freedom for the human spirit after a 
 long period of bondage to oppressive ecclesiastical 
 and political orthodoxy — a return to the liberal and 
 practical conceptions of the world which the nations 
 of antiquity had enjoyed, but upon a new and enlarged 
 platform. 
 
 That rediscovery of the classic past restored the 
 confidence in their own faculties to men striving after 
 spiritual freedom, revealed the continuity of history 
 and the identity of human nature in spite of diverse 
 creeds and different customs; held up for emulation 
 master works of literature, philosophy and art; pro- 
 voked inquiry ; encouraged criticism ; shattered the nar- 
 row mental barriers imposed by mediaeval orthodoxy. 
 
 From these records of the splendid development 
 of the Greek and Roman intellect, and its keen 
 appreciation of what was most beautiful in nature 
 and most attainable in art, the modern European 
 mind was quickened into an activity whose impulse, 
 projected across four centuries, now stimulates 
 what is best and most vital in the thought of our 
 own time in our own country. 
 
 Emerson says: 
 
 The advancing man discovers how deep a property 
 he hath in all literature, in all fable, as well as in all 
 
Palimpsests 4 1 
 
 history. He finds that the poet was no odd fellow 
 who described strange and impossible situations, but 
 that universal man wrote by his pen a confession true 
 for one and true for all. His own secret biography he 
 finds in lines wonderfully intelligible to him, yet dotted 
 down before he was born. 
 
 It is only when we come to realize that the men 
 who in long-gone-by days "fought and sailed and 
 ruled and loved and made our world" were men 
 like us; that their joys and sorrows, their triumphs 
 and defeats, were such as we suffer and enjoy, and 
 that the record of their thoughts and actions is 
 but a chapter in our own history, musing upon 
 which we may take note of our own dangers, 
 find solutions for our own problems in this our 
 day and generation, and say, 
 
 The future I may face, now I have proved the past. 
 
 How extraordinarily modern and human and 
 real, for example, the Romans of the second century 
 become as we read the letter of Pliny the younger 
 to the Emperor Trajan, written while the former 
 was proconsul in Bithynia, in which he tells of a 
 fire that had broken out at Nicomedia, and con- 
 sumed not only several private houses, but also 
 two public buildings, the town house and the 
 temple of Isis, though they stood on opposite 
 sides of the street. He says: 
 
 The occasion of its spreading so far was partly owing 
 to the violence of the wind and partly to the indolence 
 
\2 The Changing Order 
 
 of the people. . . . The truth is, the city was not 
 provided either with engines, buckets, or any one 
 single instrument to extinguish fires. 
 
 He then unfolds to Trajan a plan to organize a 
 permanent fire company, consisting of one hundred 
 and fifty members. He says: 
 
 I will take care that the privileges granted them 
 shall not be extended to any other purpose. As this 
 incorporated body will consist of so small a number, 
 it will be easy enough to keep them under proper 
 regulation. 
 
 But Trajan put no faith in the abilities of even 
 so keen-minded and vigilant a governor as Pliny 
 to confine the activities of such a company within 
 its chartered powers. Public Service Commissions 
 had not yet been invented. He wrote in reply : 
 
 .... it is to be remembered that this sort of socie- 
 ties have greatly disturbed the peace of that province 
 in general, and of those cities in particular. Whatever 
 name we give them, and for whatever purposes they 
 may be founded, they will not fail to form themselves 
 into assemblies, however short their meetings may be. 
 It will therefore be safer to provide such machines as 
 are of service in extinguishing fires, enjoining the own- 
 ers of houses to assist upon such occasions, and if it 
 shall be necessary, to call in the help of the populace! 1 
 
 It would seem as if Trajan must have had a 
 prophetic vision of the famous Moyamensing hose- 
 
 1 Melmoth's Pliny \ vol. ii., pp. 620-22. 
 
Palimpsests 43 
 
 company of our American Philadelphia, and as if, 
 even in far-off Asia Minor, eighteen hundred years 
 ago, corporations were apt to exceed their char- 
 tered rights, and to reach out to exercise powers 
 not expressly granted to them — a tendency which 
 has been at times observed of incorporated bodies 
 in later days! 
 
 The fear of the tumult which Trajan seemed to 
 think incident to assemblies of members of the 
 corporation "however short their meetings may 
 be," was like the dread the rulers of France had of 
 the consequences of calling together the States- 
 General in 1789. Self-restraint in nations, as 
 well as in individuals, is the result of the exercise 
 of regulated freedom, of liberty under law. It is 
 not the product of centuries of tyranny. It can 
 only be acquired by practice. 
 
 But the study of our palimpsests suggests an- 
 other thought; and that is, that before we seek 
 to wipe out what has been written on the books of 
 human experience by those who have gone before 
 us, we should first carefully read, consider, and 
 make sure that what we propose to substitute is 
 really better than what we would destroy. There 
 is a certain presumption arising from age alone — 
 not an irrebuttable presumption, to be sure; but 
 institutions which have stood the test of an hun- 
 dred years or more are entitled to be considered 
 presumptively good for much longer, unless the 
 evidence is very clear that they have broken down 
 under the strain of new burdens which advancing 
 
44 The Changing Order 
 
 time has imposed upon them. When automobiles 
 came into general use, it was not thought neces- 
 sary to depress the roads and carry them by 
 tunnel under all intersecting streams; we merely 
 strengthened the bridges so they would bear 
 the increased weight. Growth by modification 
 and adaptation, rather than by staccato-like 
 inventions, is the safest progress for human 
 institutions. 
 
 Man is said to be the only animal that profits 
 by the experience of others. Sometimes it would 
 appear as if he were not entitled to this distinction. 
 
 Emerson says: 
 
 All history becomes subjective; in other words 
 there is no history, only biography. Every soul must 
 know the whole lesson for itself — must go over the 
 whole ground. What it does not see, what it does 
 not believe, it will not know. 
 
 But a wise generation will endeavor to avoid 
 repeating experiments which previous history has 
 demonstrated to be doomed to failure. The 
 meeting of the States-General in France in 1789 
 brought together a great body representative of 
 the different classes of the French people. They 
 were almost all inexperienced in the science of 
 government. They were wholly inexperienced in 
 legislation. Nearly two centuries had elapsed 
 since the representatives of the three estates of 
 the realm had met to discuss measures affect- 
 ing the nation. The delegates to the National 
 
Palimpsests 45 
 
 Assembly of 1789 were therefore at best mere 
 theorists. They were guided by philosophical 
 hypotheses, unaided by experience. They were all 
 too familiar with evils and abuses. They resorted 
 to philosophy and speculation — not history — for 
 remedies. They proposed to enact into law the 
 wildest Utopian dreams. They conceived of man 
 (that is, the abstract political man who was to be 
 the unit of control in the new state they dreamt 
 of) as possessed of the most exalted virtues, and 
 of a wisdom which sprang, like Minerva, full 
 armored from the head of Jove. Being endowed 
 by nature with virtue and wisdom, he needed but 
 the opportunity to decide, in order that he should 
 direct the state along the paths of justice to success 
 in protecting life and property at home, and in 
 sustaining the honor of the nation abroad. This 
 virtue was not found in the chosen representatives 
 of the people, but only in the individual when he 
 acted as an elector in exercising direct popular 
 sovereignty. Therefore, the nation must in its 
 aggregate capacity make its own laws, determine all 
 controversies, and initiate and control all actions 
 which the exigencies of national existence might 
 require. What the people willed at any moment 
 must become at once the rule of action for the 
 commonwealth. Representatives of the people 
 suffered a loss of virtue by being detached from 
 the mass to perform especial functions. At best, 
 they should serve only as a large committee to 
 suggest to the whole body of the people the prob- 
 
46 The Changing Order 
 
 lems which the people would then solve. They 
 must be under the direct control of the popular 
 will, or they would cease to be truly repre- 
 sentative of the people. There was no God but 
 Reason, and Rousseau and Tom Paine were his 
 prophets ! 
 
 And after they had hurried from one excess to 
 another, had killed their monarchs and every 
 leader who for a brief while stood forward as the 
 chief exponent of the prevailing theories — Robes- 
 pierre, Danton, Marat, Joubert — and an hundred 
 others of lesser note, and had demonstrated the 
 utter insecurity of life, liberty, and property under 
 such a system, a military absolutism was erected 
 on the ashes of unrestrained democracy. 
 
 Again, in 1848, after the revolution of July, the 
 poets and philosophers attempted to conduct the 
 government of France on the basis of unrestricted 
 and immediate control of the government by the 
 popular will. This time the experiment was of 
 shorter duration, and nearly twenty years of the 
 empire of Louis Napoleon followed. 
 
 But back in 1787, there gathered together in 
 America a body of men of different caliber. They 
 had won liberty, and they were resolved it should 
 not degenerate into license. They conceived of a 
 government which should be adequate to the 
 protection of life, liberty, and property at home, 
 and should command respect abroad. They took 
 the philosophical theories of the time and applied 
 to them the touchstone of history. They rejected 
 
Palimpsests 47 
 
 Jean Jacques Rousseau and Tom Paine, and 
 adopted the principles of Magna Charta, and the 
 Bill of Rights. Dealing with theories of govern- 
 ment on the basis of examining all things, holding 
 fast that was best, they refrained from adopting 
 those institutions which experience in the past had 
 demonstrated to be fraught with peril to freedom, 
 however attractive they might seem as abstract 
 philosophical theories. Without the demonstra- 
 tion which the experience of the French nation 
 was shortly to furnish, they distrusted the practica- 
 bility of the doctrines of Rousseau and the Ency- 
 clopedists. They found more useful and robust 
 suggestion in Montesquieu's famous Esprit des 
 Lois, They turned to the history of popular 
 government in the past — in Greece and in Rome — 
 and in their plan of a government which was to 
 secure the blessings of liberty to themselves and 
 their posterity, they carefully guarded against 
 those opportunities for self-destruction which had 
 proved the ruin of the republics and democracies 
 of the older world. 
 
 As one reads the inadequate record of their delib- 
 erations, one is filled with wonder and admiration 
 at the evidence of their thorough familiarity with 
 the history of governments in the past, and at 
 their prescience in respect of the future. They 
 were at pains to save their country from the dis- 
 asters which past history demonstrated had ever 
 attended upon popular forms of government. 
 They never lost sight of the fact that a people is 
 
48 The Changing Order 
 
 but an aggregation of individual men, and that if 
 a government by the people is to be successful 
 and lasting, it must contain within itself some 
 means of protecting the whole people from the 
 follies or weaknesses or ignorance of a minority 
 who, under the impulse of temporary emotion, 
 may draw to themselves enough support to ac- 
 complish what reflection and sober second thought 
 would demonstrate to be an injustice, but which 
 might be discovered too late to prevent irretriev- 
 able mischief. 
 
 So they devised a scheme of representative 
 republican government, with a distribution and 
 balance of powers, so adjusted that it can never 
 fail to respond to the real deliberate judgment of 
 the people, but which is strong enough to protect 
 the commonwealth from the effect of temporary 
 impulse, resulting from misinformation, passion, 
 or prejudice. They conceived of a government 
 which would be dignified and respected, in which 
 the whole people would be represented, and which 
 should be controlled and directed by the best 
 thought and highest ideals of the people. Their 
 experience in the colonial governments had taught 
 them the great advantage of establishing a govern- 
 ment on certain fundamental outlines contained 
 in a written constitution which should represent 
 the deliberate will of the whole people, and which 
 should limit and control the action of the repre- 
 sentatives of the people in making, interpreting, 
 and enforcing the laws. This constitution, they 
 
Palimpsests 49 
 
 provided, should be altered only by the affirmative 
 act of a real majority of the whole people. They 
 did not leave it to be the sport of a minority, 
 taking advantage of the apathy of the majority. 
 It was to be the settled government of all, until 
 a secure majority of all should affirmatively and 
 deliberately determine to change it. By these 
 means they secured for the nation the benefits 
 of that self-restraint which in nations, as in indi- 
 viduals, coupled with self-knowledge and self- 
 reverence, lends life to sovereign power. Their 
 government was a growth — a continuity of the in- 
 stitutions which the hardy, upright, self-respecting 
 men of the American Colonies had worked out for 
 the preservation of that liberty and independence 
 which to them was dearer than property or life. 
 
 It was the product of the best thought and the 
 highest statesmanship of the American people. 
 The civilized world has done homage to their 
 learning, their wisdom, and their practical common 
 sense. While the institutions established by the 
 Constitution of the United States thus far have 
 resisted the recrudescence of the theories of the 
 philosopher of Geneva, and his modern disciples 
 of Oregon and Oklahoma, they have been found 
 sufficiently elastic to adapt themselves to the 
 changing needs of a people whose numbers have 
 increased from three millions to ninety, and for 
 the government of a nation of forty-six States, and 
 possessions beyond the seas. The cardinal prin- 
 ciples of the government are simple: a nice balance 
 
50 The Changing Order 
 
 of powers, confidence in representatives who make, 
 judges who interpret, and administrators who 
 execute the law; freedom from interference for a 
 period adequate to enable them to demonstrate 
 the fidelity with which their tasks are discharged ; 
 and accountability to the people when this period 
 is passed. 
 
 But iconoclasts, such as arise in all ages, threaten 
 the overthrow of this system. Already their de- 
 structive work has been commenced in several 
 States. Opposition to them is sought to be dis- 
 credited by the cheap and ready cry that those 
 who oppose the proposed changes do not trust the 
 people. The sponge and the eraser of the eager 
 social reformer and the more eager demagogue 
 are set to work on the pages to which were ap- 
 pended the immortal names of Hamilton, Franklin, 
 Madison, and Washington. So vociferous are 
 these iconoclasts, and so apathetic the friends and 
 supporters of constitutional government, that one 
 is tempted to share the fears of Hamilton that it 
 may be 
 
 . . . forgotten that the vigor of government is 
 essential to the security of liberty; that in the con- 
 templation of a sound and well informed judgment, 
 their interest can never be separated; and that a 
 dangerous ambition more often lurks behind the 
 specious mask of zeal for the rights of the people than 
 under the forbidding appearance of zeal for the firm- 
 ness and efficiency of government. History will teach 
 us that the former has been found a much more cer- 
 
Palimpsests 51 
 
 tain road to the introduction of despotism than the 
 latter, and that of those men who have overturned the 
 liberties of republics, the greatest number have begun 
 their career by paying an obsequious court to the 
 people; commencing demagogues and ending tyrants. 
 
 To an American of to-day, the suggestion of an 
 individual tyrant accomplishing the overthrow of 
 liberty in this country seems grotesquely absurd 
 and impossible. But the overthrow of representa- 
 tive republican government of the type estab- 
 lished by the Constitution of the United States, 
 and by those of practically all the States of the 
 Union until a very recent date, eliminates entirely 
 the element of protection of the commonwealth 
 from the immediate and disastrous action of an 
 organized and aggressive minority; weakens 
 government, by making executive officers depend- 
 ent entirely upon momentary popular favor, and 
 results in the destruction of all security of property 
 and liberty, by creating a spineless and servile 
 judiciary. Even the worst individual tyrant has 
 limitations to his rapacity and his cruelty. But 
 an unrestrained populace, stimulated by strong 
 emotion, knows no limits, and is capable of any 
 extreme. 
 
 "Know this also," says Carlyle, in closing his 
 French Revolution, 
 
 that out of a world of unwise nothing but an unwisdom 
 can be made. Arrange it, constitution-build it, sift 
 it through ballot-boxes as thou wilt, it is and remains 
 
52 The Changing Order 
 
 an unwisdom — the new prey of new quacks and un- 
 clean things, the latter end of it slightly better than 
 the beginning. Who can bring a wise thing out of 
 men unwise? Not one! 
 
 It has been the boast of America that our system 
 was carefully framed so as to protect against 
 unwisdom, by a system of checks and balances so 
 devised as to secure equal rights to all, and to 
 prevent injustice to any. 
 
 Before we wipe away the institutions so care- 
 fully planned by our forefathers, to write over 
 their ruins the new social contract, and the revised 
 and latest edition of "The Rights of Man," shall we 
 not pause and consider whether we would not 
 throw away a priceless heritage, and like Esau, 
 barter away a precious birthright of freedom for 
 a mess of delusive pottage? 
 
BUSINESS AND THE LAW 1 
 
 FROM time immemorial, merchants and traders 
 have recognized the necessity of laws to 
 regulate the conduct of business. Human nature, 
 always more or less the same, makes it necessary, 
 to prevent perpetual strife,violence, and bloodshed, 
 that the rights of those engaged in business with 
 each other, and of the public in dealing with them, 
 should be denned and recognized, and some 
 method — the simpler the better — established for 
 compelling the observance of those rights, by 
 awarding redress to any one who is injured by an 
 invasion of them, and by protecting society at large 
 from the consequences of such invasion, by ade- 
 quate punishments to prevent repetitions of the 
 offense. 
 
 From an early day, customs grew up among 
 merchants which became settled and uniform, and 
 were recognized as binding upon them, and as 
 embodying the best methods of securing fair play 
 among them and protection to the public. As 
 
 1 Address before the Commercial Club, St. Louis, Mo., Feb. 
 16, 1912. 
 
 53 
 
54 The Changing Order 
 
 early as the fourteenth century, in England, in the 
 towns where foreign commerce was carried on — 
 known as "staples" or "staple markets" — there 
 were established special tribunals for the ready 
 enforcement of these laws of trade. Those early 
 courts — known as "Courts Pie Poudrous" or 
 "Pi-Powders" — set an example which it would be 
 well for more modern tribunals to imitate — of 
 sitting during fair time from hour to hour, both 
 morning and afternoon, hearing and disposing 
 of cases in a summary and informal way, so that 
 disputes arising with regard to contracts, charter 
 parties, bills of lading, or other commercial matters, 
 might be disposed of, in the language of the old 
 books "between tide and tide." The very name 
 of these courts carries the suggestion of a sim- 
 plicity and expedition of legal procedure as far 
 remote from our modern ways as the time of 
 Edward III is from this age. We can imagine 
 strange -looking bearded men, speaking all manner 
 of foreign tongues, and clad in sea boots and fur- 
 lined robes, with the dust of the market place on 
 their feet, and the salt of the sea in their hair and 
 beards, making their complaints or their defenses 
 before the judges of the staple, producing their 
 witnesses, and receiving speedy judgment, accord- 
 ing to their own usages, at the hands of judges in 
 whose fairness and wisdom they had confidence, 
 and so going their ways recompensed, or cast in 
 damages, as the justice of the case might require, 
 ere the sun went down. These courts were 
 
Business and the Law 55 
 
 established, as a statute of Edward III declared, 
 to give courage to merchant traders to come with 
 their wares and merchandise into the realm. And 
 the knowledge of the fact that foreign merchants 
 might come and trade according to the best usages 
 of the business, and be protected by the summary 
 administration of justice, gave an impetus to the 
 commerce of Great Britain which carried her into 
 the first rank among the nations of the world. 
 The staple system was established not only for 
 the purpose of facilitating the collection of the 
 royal customs, but to insure the quality of exported 
 goods. 
 
 Commercial morality [says a writer on the history 
 of this system] was none too high in those days, and 
 the average trader fully appreciated the maxim caveat 
 emptor. He had not the ingenuity of his nineteenth 
 century successor, but such tricks as he knew for the 
 undoing of the consumer he, too, practiced with 
 energy and perseverance. ' 
 
 The rules and usages of the merchants ripened 
 into a code which later on was recognized as the 
 Law Merchant, and came to be administered in the 
 royal courts of law, and has come down to us 
 as part of our common law, much of it now being 
 embodied in statutes of the different States. 
 
 During the years while the foreign trade and 
 commerce of Great Britain was receiving its great 
 impetus through the Staples, the makers of various 
 
 1 Select Essays in Anglo-American Legal History, vol. iii., p. 22. 
 
56 The Changing Order 
 
 articles of commerce in the towns began to organ- 
 ize themselves into associations or guilds, which 
 regulated the processes of manufacture, and the 
 prices, materials, tools, working hours, wages, 
 number of apprentices and the nature of their 
 duties. They punished dishonest workmanship, 
 the use of bad material, short weights and measures. 
 In a word, the traders of every town united in the 
 protection and pursuit of their common trade 
 interests. By and by, these guilds were recognized 
 by law, charters were granted to them by Parlia- 
 ment, and they controlled in each city the conduct 
 of every particular trade or business. In course 
 of time, as towns grew, some masters prospered 
 more than others, the wealthier members grew 
 into a guild aristocracy and endeavored to monopo- 
 lize the guild privileges, and sought to keep the 
 inferior class from sharing in them. As a result, 
 the excluded workmen formed new associations — 
 craft guilds of their own — and being more numerous 
 than the members of the merchant guilds, became 
 more powerful, and gradually superseded those 
 older organizations whose selfishness had brought 
 about their own extinction. In other words, the 
 successful associations of merchants of the four- 
 teenth century did precisely what similar organiza- 
 tions have done in the nineteenth and twentieth 
 centuries. Insiders became selfish, and excluded 
 from membership all but the favored few, so that 
 by keeping down their numbers they might keep 
 up their profits; they sought to absorb to them- 
 
Business and the Law 57 
 
 selves the entire control of lines of business; they 
 excluded all competition. In the end, the number 
 of outsiders became so large that they formed new 
 guilds — or unions — imitated the selfish perform- 
 ances of their predecessors, and the outsider who 
 was not a member of either a merchant guild or a 
 craftsmen's guild was ground between both. So 
 the law of the realm had to be invoked — in a meas- 
 ure, the old common or customary law, and 
 sometimes direct legislative action — to protect the 
 individual against the tyrannous power of these 
 organizations. The problem arose then, as it has 
 in larger form in our own times, of how to adjust 
 the rights of all the people with the legitimate rights 
 of a small number of the people associated together 
 for the conduct of a particular business. 
 
 Centuries rolled by; America was discovered, 
 colonized, grew up mid stress and storm; fought 
 for independence, won it upon the basis of a creed 
 that all men were endowed with certain inalienable 
 rights, among which are life, liberty, and the pur- 
 suit of happiness, and that to secure these rights 
 governments are instituted among men, deriving 
 their just powers from the consent of the governed. 
 Such a government our fathers established by 
 means of a written constitution, adopted for the 
 declared purpose of establishing justice, insuring 
 domestic prosperity, and securing the blessings 
 of liberty to the people of the United States and 
 their posterity. Lecky, in his Democracy and 
 Civil Liberty y says that the ends which the great 
 
58 The Changing Order 
 
 American statesmen set before them and which 
 they in large measure attained in framing the 
 Constitution, were: 
 
 to divide and restrict power; to secure property; 
 to check the appetite for organic change; to guard 
 individual liberty against the tyranny of the multitude 
 as well as the tyranny of an individual as a class; to 
 infuse into American political life a spirit of continued 
 and of sober and moderate freedom. 
 
 During the first fifty years of national existence 
 under the Constitution, it may be said that these 
 ends were almost absolutely attained. Lord Acton, 
 writing of this period, says that the causes of Old 
 World trouble — popular ignorance, pauperism, 
 the glaring contrast between rich and poor, reli- 
 gious strife, public debts, standing armies, and 
 war — were almost unknown. "No other age or 
 country, had solved so successfully the problems 
 that attend the growth of free societies," and, he 
 adds, "time was to bring no further progress." 1 
 I pray that the day may be long distant when it 
 can truly be said of American institutions that 
 time can bring them no further progress. Pro- 
 gress is only attained by meeting and overcom- 
 ing problems. The more complex and apparently 
 insoluble the problems, the greater the progress to 
 be realized by solving them. Growth of nations, 
 as of individuals, is the result of struggle. The 
 same causes which operated to cause the Old 
 
 1 Acton, Essays on Liberty, p. 56. 
 
Business and the Law 59 
 
 World trouble referred to by Lord Acton, exist 
 in a far less degree in our country than they did 
 there. We have no religious strife; our public 
 debts are not onerous; we have had but one great 
 war, and that half a century ago ; it was not a war 
 of aggression, but a war which rid us of the great 
 moral evil of slavery, and established a basis of 
 united and reinforced nationalism strong enough 
 to cope with the great problems the future holds 
 for us. We have no popular ignorance, but a 
 widespread popular intelligence. True, we have 
 had, and we still have, some glaring contrasts 
 between rich and poor. Progress and poverty 
 have gone hand in hand, but to nothing like the 
 same extent as in the greatest civilizations of 
 ancient times. 
 
 The century just passed has been one of un- 
 paralleled progress in the application of science 
 to industry and the affairs of daily life. The 
 almost boundless natural resources of this great 
 American continent have been developed and 
 applied in the light of a rapidly increasing knowl- 
 edge of the laws of nature, and an equally increasing 
 control over natural forces. A century which saw 
 the application first of steam and then of electricity 
 to transportation, the invention and development 
 of the electric telegraph, wireless communication, 
 the invention of the cotton-gin and the spinning 
 jenny, the automobile and the aeroplane, and a 
 thousand other devices, cannot be judged by the 
 standards which should be applied to any other 
 
60 The Changing Order 
 
 age in recorded history. Population increased as 
 by magic; the most energetic and most adventur- 
 ous of the peoples of the Old World poured into our 
 country. Our natural resources were exploited, 
 developed, controlled, and marketed with bewil- 
 dering success. Wealth accumulated as by the 
 wave of a magician's wand; little heed was given 
 to the laws of business or of business association, 
 because the field was open to all, and energy and 
 enterprise were impatient of restriction or control. 
 A community into whose lap was poured increas- 
 ing and apparently inexhaustible wealth, took 
 little interest in suggestions to interfere with the 
 activities of men who were achieving such con- 
 spicuous success. But man is an insatiable crea- 
 ture; though he heap up untold riches, yet his 
 appetite grows by what it feeds upon, and he is 
 never content to cry "Enough!" The more he 
 has, the more he covets, and the less willing he 
 becomes to allow others any share in the common 
 wealth from which his power or his cunning can 
 exclude them. The garnered fortunes of American 
 merchants and of American specu ators assumed 
 such magnitude, the influence exerted by them in 
 public affairs became so obnoxious to the welfare 
 of the community and to the safety and continu- 
 ance of free institutions, that a gathering wave of 
 protest began to rise and to sweep with increasing 
 force across the land. It found expression in 
 legislation of a character which would have 
 seemed impossible to the statesmen of our older 
 
Business and the Law 61 
 
 days. Students of Jefferson, who believed that 
 that people is best governed that is least governed, 
 were appalled at the growing volume of legislation 
 which they claimed interfered with the exercise 
 by men of the ordinary avocations of life. Indig- 
 nant protest cried out from the ranks of those 
 whose onward career towards increasing wealth 
 and power was sought to be thus checked. It was 
 the old problem that had arisen in Europe over 
 five hundred years previously — the problem of 
 protecting the rights and opportunities of all the 
 people against the selfish tyranny of the organiza- 
 tions or groups that had acquired wealth and power 
 so great as to lose sight of the rights of all those 
 outside of their own ranks. The evil was to be 
 met by the application, on behalf of all the people, 
 of those same rules of fair trade which had grown 
 up among the sturdy traders of the fourteenth and 
 fifteenth centuries. 
 
 The first subject to be wrested from the unfair 
 control of special groups or interests was the 
 greatest agency of modern commerce — transpor- 
 tation by railroad. During the years of develop- 
 ment of a new country, railroad charters had been 
 freely granted by State governments to any who 
 chose to take them, and the right of eminent 
 domain was freely conferred upon all who were bold 
 enough to undertake the construction of lines of 
 railroad. The shrewdest merchants were swift 
 to perceive the advantage of controlling trans- 
 portation, and the greatest impetus to monopo- 
 
62 The Changing Order 
 
 listic control of industry was afforded by securing 
 special privileges in rates and methods of trans- 
 portation. 
 
 One looks back on the history of American rail- 
 road construction with mingled feelings of pride 
 and shame! Pride in the enterprise and courage 
 with which men undertook to build lines of railroad 
 in the face of every conceivable natural obstacle, 
 and invoked the highest engineering skill to 
 overcome difficulties which in any other age would 
 have daunted and defeated the most enterprising; 
 shame at the conscienceless way in which the 
 public was defrauded by the issue of securities 
 without value, by the methods with which trustees 
 of great properties juggled with them in their own 
 interests, and enriched themselves at the expense 
 of those they should have protected. One looks 
 back on the history of the growth of American 
 business during the last forty years with the same 
 mingled feelings — admiration and pride at the 
 splendid development of methods of production 
 and distribution which made American manu- 
 facturers and American merchants the foremost 
 in the world; which invented the department 
 store and the mail-order house ; which devised the 
 most perfect system of manufacturing and deliver- 
 ing goods to the purchaser ever known in history — 
 but shame at the birth and growth of a system of 
 underhand, concealed, and unfair dealing, whereby 
 competition was stifled, industries monopolized, 
 equality of opportunity denied, and charters of 
 
Business and the Law 63 
 
 incorporation, granted for the benefit of all the 
 people, made instruments for the enrichment of 
 the few at the expense of all others. 
 
 The first attempt to cope by national legislation 
 with the evils which had resulted from the enor- 
 mous growth of wealth in our country, therefore, 
 naturally was directed at the management of the 
 railways; for that subject concerned almost every 
 inhabitant of the country. Probably no business 
 man to-day could be found who would not applaud 
 the legislation which, beginning with the Inter- 
 state Commerce Act of 1887, has been added to, 
 amended, expanded, and finally has found its last 
 expression in the act of 191 o. By these statutes, 
 the principle has been firmly established that rates 
 shall be reasonable; that there shall be no unjust 
 discrimination between those who use the railroads; 
 and that any violation of the laws declaring these 
 principles shall be punished with fine and im- 
 prisonment. The railroad companies consistently 
 and persistently have fought every effort to make 
 these laws adequate to the protection of the in- 
 individual merchant or shipper, and to secure him 
 that fairness and equality of treatment to which 
 every citizen is entitled; but step by step the 
 battle has been fought and the victory won for the 
 whole people. 
 
 Next, the attention of the national legislature 
 was directed to the great artificial aggregations of 
 manufacturers and dealers which had grown up 
 under the lax system of legislation existing in every 
 
64 The Changing Order 
 
 State in the Union, whereby charters were handed 
 out, without inquiry, conferring power to engage 
 in any form of industry; and legal immortality, 
 and immunity from personal liability upon any 
 group of men who could raise enough money to 
 pay the nominal organization fees. Like the 
 medieval guilds, many of these associations had 
 grown rich and great, and in the plenitude of their 
 power, had ruthlessly invaded the rights and 
 trampled on the liberties of every one not within 
 their organization. Those who were in control 
 of their machinery had in many instances utilized 
 their position and the advantages of the knowledge 
 and power which they possessed, to enrich them- 
 selves even at the expense of their own constituents ; 
 and these combinations had become so strong that 
 nothing but the power of the nation was adequate 
 to check them and drive them back to their proper 
 bounds. A growing recognition of these evil condi- 
 tions led to the enactment of the Sherman Law of 
 1 890. I do not propose here to review the history of 
 that law — of how it was first treated with contempt- 
 uous indifference; how the Supreme Court of the 
 United States at first failed to grasp its proper appli- 
 cation ; how a better know! edge of its scope and mean- 
 ing grew; how decision after decision finally made 
 manifest to the people their power, by means of that 
 law, to check the growing evil of unfair methods of 
 controlling the trade and commerce of the nation, 
 and finally through it to break up the great monop- 
 olies of trade and prevent new ones from forming. 
 
Business and the Law 65 
 
 The law at first was almost murdered in the 
 house of its friends, because there was given to it 
 by some courts and some judges a construction 
 which, if finally established by the Supreme Court, 
 would have reduced it to absurd consequences, 
 and made of an act established for the purpose of 
 preventing unlawful restraints upon the commerce 
 of the nation, a means of accomplishing the de- 
 struction of that commerce. 
 
 Surely, no thoughtful man, reading the history 
 of his country during the past sixty years, can fail 
 to feel thankful at the demonstration of the power 
 of his government peaceably to cope with the great 
 forces of monopoly and unfair trade, and to force 
 back within their bounds the scope of successful 
 enterprise; so that, however rich, however power- 
 ful in the progress of trade and commerce they 
 may become, men shall be compelled to recognize 
 the rights of others, and be prevented from, 
 by unfair competition, achieving the ruin of all 
 competitors. 
 
 This is a big country; large capital is required 
 to conduct business in a manner adequate to the 
 needs of an hundred millions of people. We cannot 
 go back to the days of small trading, and continue to 
 supply the wants of our people at prices which 
 would be adequate returns on small investment. 
 The wages reasonably demanded by American 
 standards of living can only be paid as incident to 
 the conduct of business on a large scale. But the 
 essential principle, upon the enforcement of which 
 
66 The Changing Order 
 
 alone can the welfare of the people permit the 
 continued existence of artificial bodies with large 
 capital, is the recognition of the power of the 
 government as greater than that of any corporation 
 or group of men, and the constant exercise of that 
 power to preserve the rights of the humblest citizen 
 as well as the richest. 
 
 Probably negative, restrictive legislation has 
 gone as far as is necessary. The great principles 
 that the highways of commerce shall be open to all 
 on equal terms to those under like conditions and 
 similar circumstances, and that men may not 
 band themselves together by unfair methods to 
 destroy competitors, are now fully recognized by 
 law, and adequate means are provided to prevent 
 violations of that law. Most men are learning 
 the difference between a combination to get busi- 
 ness, and a combination to get a competitor. 
 
 What is left as yet untouched, is the provision 
 by national legislation of some adequate law of 
 association, under which there may be retained 
 the great advantages of cooperative effort in the 
 conduct of business — which in our day and genera- 
 tion must be great in volume successfully to meet 
 the needs of the people — while at the same time 
 protecting the people from the consequences of 
 unrestrained association, which in the past has 
 resulted in unfair competition and grossly unequal 
 fortunes. Nothing but continued confusion can 
 result from leaving the creation and regulation of 
 these associations to the varying caprices of forty- 
 
Business and the Law 67 
 
 eight or fifty States. Until the national govern- 
 ment courageously faces the question and accepts 
 the responsibility which the assertion of power 
 involves, the proper equation between business 
 and the law cannot be adequately settled. In our 
 corporate laws we have shown little of the sagacity 
 which characterized our forefathers in framing our 
 constitutions. 
 
 In the development of a new continent there was, 
 of course, a tremendous advantage in laws which 
 enabled a number of coadventurers to contribute 
 toward a common fund to be devoted to a particular 
 enterprise without liability beyond the amount so 
 contributed. But when this contribution became 
 a mere sham and subterfuge; when the actual 
 capital of a corporation was only the money 
 borrowed on the faith of a fictitious capital, and 
 representations as to its business, in which imagi- 
 nation and hope played a much greater r61e than 
 facts, corporate organization became in a large 
 measure an instrument for fraud. When partner- 
 ships between corporations were legalized by 
 State authority, and one creature of legislation 
 extended its control over an indefinite number of 
 others through the acquisition of shares of their 
 stock, there was built up an irresponsible engine 
 for monopolizing business such as the world had 
 never witnessed. It is probably safe to say that 
 a very small percentage of even the successful 
 great combinations of business were created for 
 legitimate business purposes, or in the recognition 
 
68 The Changing Order 
 
 of a legitimate demand for business extension. 
 They were often created to enable those who con- 
 trolled their machinery, and the financiers with 
 whom they dealt, to issue and sell to the public 
 vast amounts of stocks and bonds at prices far 
 beyond their actual value, and thus greatly to 
 enrich themselves at the expense of the country. 
 They piled up fortunes without precedent. Some- 
 times the stockholders profited, sometimes they 
 did not. Seldom, if ever, did they profit in the 
 same degree as the group who were in control. 
 In the rush and progress of industry, few thought 
 of, and still fewer acted in accordance with, the 
 principle that makes an agent or trustee liable to 
 account to his principal for all the profits realized 
 in carrying out the principal's business. These 
 things are so well known that it is but repeating 
 well-ascertained facts to refer to them. They con- 
 stitute one of the scandals of an age which has so 
 much in other ways to be proud of. Surely, the 
 generation that has seen these things, that has 
 been made keenly alive to their evil influence in 
 the State and to their false economic results, 
 should not pass away without enacting legislation 
 and securing methods of so enforcing it as to for- 
 ever prevent the recurrence in the future of any 
 such conditions. 
 
 How shall this be done? How can it be done, 
 save through Federal legislation which shall deal 
 with the conduct of business among the States 
 and with foreign nations by associations of men 
 
Business and the Law 69 
 
 in corporate form; which shall so regulate the 
 methods of organization of such associations as to 
 prevent those who deal with them from deception 
 concerning their capital or business; which shall, 
 by appropriate provisions, make it certain that 
 every person who invests either by way of stock- 
 purchase or loan shall have at all times the means 
 of securing adequate information concerning the 
 property, business, and earnings and expenses of 
 the associations ; and that shall prevent them from 
 being used as engines of unfair competition and 
 destruction of others engaged in fair competition 
 with them? No limit can or should be set to the 
 capacity of such an association for legitimate, 
 normal growth; but it should be impossible for it 
 to inflate itself by mythical values based upon no- 
 thing but expectation, hope, or misrepresentation. 
 No individual carrying on business as such, and no 
 mere partnership, has ever yet succeeded in 
 absorbing so large a share of the trade or commerce 
 of the country as to accomplish, or threaten to 
 accomplish, monopoly. Individuals united by 
 secret agreements restraining their own action, 
 and plotting the destruction of competitors by 
 secret, unfair methods, have threatened the 
 stability of trade, abnormally increased the price 
 of products, and disturbed the normal currents of 
 business; but the great monopolies which have 
 arisen have always operated under corporate form, 
 and only by means of controlling corporate organi- 
 zation can the national government effectively 
 
70 The Changing Order 
 
 prevent the recurrence of evil, and introduce that 
 certainty into the law of the conduct of business 
 by association which is so requisite to wholesome 
 national trade conditions. 
 
 No right-minded man begrudges to superior 
 intelligence the fruits of honest ingenuity and 
 industry; but no patriot would be willing to see 
 Americans become mere servants of great cor- 
 porate organizations. Only free men — not indus- 
 trial slaves — can maintain free institutions. The 
 problem before the business men of to-day is, 
 in Lecky's language, to infuse into and retain in 
 American political life a spirit of continued sober 
 and moderate freedom. 
 
VI 
 
 ENGINEERING AND CULTURE 1 
 
 THIRTY-FOUR years ago I was an undergrad- 
 uate of Lehigh, a student in the School of 
 Civil Engineering; destined, as I then thought, to 
 follow that profession as my life work. Fortu- 
 nately, I found a wise counselor in Dr. Henry 
 Coppee, at that time President of the University, 
 a student and teacher of literature, quick to 
 recognize in a young student a taste for letters, 
 and who, charitably excusing my lack of aptitude 
 for scientific pursuits by attributing to me capacity 
 in other directions, advised me to give up the study 
 of calculus for that of Blackstone. For this counsel 
 I have been always grateful. I refer to it, not as 
 in itself a matter of interest to others than myself, 
 but as evidence of the far more important fact 
 that, even in those early days, the student at Lehigh 
 was given by the faculty that suggestion and direc- 
 tion which was suited to his particular needs. 
 This was hardly to have been expected at that 
 time, for the absorbing interests of the institution 
 
 1 Address on receiving the honorary degree of LL.D., at Lehigh 
 University, Bethlehem, Pa., June 8, 1909. 
 
 71 
 
72 The Changing Order 
 
 were then technical and practical, and as a rule the 
 students were endeavoring to acquire a sufficient 
 training in scientific and engineering lines to 
 enable them to make a living ; and the faculty was 
 addressing itself to the accomplishment of that 
 effort. 
 
 The country was slowly recovering from the 
 panic of 1873; ^ e resumption of specie payments 
 and the era of prosperity was yet several years off. 
 But the great need of railway and industrial de- 
 velopment was even then appreciated, and it was 
 felt that soon there would be a great demand 
 for well trained engineers. 
 
 The thoughts of many eager young men were 
 therefore centered in preparation for the different 
 branches of engineering, in the belief that those 
 vocations offered the most promising pathways 
 to success and prosperity. Pennsylvania, particu- 
 larly the Lehigh Valley, was recognized as a great 
 field for a development in which engineering and 
 chemistry would necessarily play a large part. 
 
 Foreseeing this, and the advantage to the youth 
 of the Lehigh Valley of proper preparation for its 
 demands, Judge Packer had in 1865 endowed and 
 founded this institution, with the object, as set 
 forth in the Register of the University, "to afford 
 the young men of the Lehigh Valley a complete 
 education, technical, literary and scientific, for 
 those professions represented in the development 
 of the peculiar resources of the surrounding 
 region." Analytical chemists and mining and 
 
Engineering and Culture 73 
 
 civil engineers were at first, therefore, as was 
 natural, almost the sole products of the institution, 
 and during the first ten years of its existence, out 
 of eighty-one degrees conferred by Lehigh, only 
 six were of Bachelor of Arts. 
 
 The early graduates of the University easily 
 obtained profitable employment, and their suc- 
 cesses inspired many others to come here for that 
 training, the commercial value of which met with 
 such ready recognition. 
 
 Your honored President, Henry S. Drinker, an 
 alumnus of only three or four years' standing when 
 I entered the University, had already won distinc- 
 tion by his work in the building of the Amboy 
 tunnel, and his accomplishments were taken as 
 an example of the opportunities which were open 
 to every graduate of the Engineering School, al- 
 though few felt they could acquit themselves with 
 as much distinction as he had done. 
 
 It was natural at that time for Americans, with 
 a sense of the great natural resources of their 
 country, to turn to the study and application of 
 practical science, in order that they might aid in 
 the development of those resources, and share in 
 the material results thereby to be realized. 
 
 It was natural, too, that on the threshold of a 
 great industrial and material development, young 
 men should address themselves to technical studies 
 with the view to fitting themselves in the shortest 
 possible time for practical work, and that they 
 should be impatient of what seemed to them a 
 
74 The Changing Order 
 
 waste of time in such preliminary academic prepa- 
 ration as was required for the professions of law 
 and medicine. This spirit was not confined to 
 Lehigh. It was characteristic of other technical 
 schools ; perhaps of all of them. But the engineer- 
 ing profession, it seems to me, has suffered in 
 consequence, and while American engineers have 
 led the world in practical achievement, I think 
 I am correct in saying they never have taken 
 quite the rank in American social and political 
 life commensurate with their accomplishments in 
 their own profession. I ascribe this to the 
 fact that their training has been too purely tech- 
 nical ; they have specialized too early in life, and 
 without that broad and catholic foundation upon 
 which special training should be based. 
 
 The gentleman who delivered the alumni ad- 
 dress at your last commencement said: 
 
 Our older collegians are almost universally graduates 
 of the literary schools. When we go forth into the 
 world at large and come into contact with them, we 
 find that they are unwilling to concede the full value 
 of the technical education. 
 
 I do not agree with that statement. All edu- 
 cated men concede the full value of the technical 
 education: its results fully demonstrate it. But 
 the defects in a merely technical education are also 
 easily perceived. " It is true, " as was said in that 
 address, "that the requirements of civilization have 
 gone far beyond that which is purely culture;" 
 
Engineering and Culture 75 
 
 that is to say, an age conspicuous for its ascertain- 
 ment and practical application of the forces of 
 nature has, of course, gone beyond the period of 
 merely conning the texts of sacred books, after 
 the manner of the Chinese. But the requirements 
 of a civilization that is not purely materialistic 
 have not dispensed with art and literature, nor 
 ignored the tremendous importance of the imagina- 
 tion — the value of poetry and song, in inspiring 
 that impulse which achieves the greatest practical 
 results, — nor can they minimize the importance of 
 the study of the past history of man, for contrast 
 and example, for warning and for emulation. 
 
 The art of measuring [says Mommsen] brings the 
 world into subjection unto man; the art of writing 
 prevents his knowledge from perishing along with him- 
 self ; together, they make man — what nature has not 
 made him — all powerful and eternal. . . . Measure- 
 ment [he adds] necessarily presupposes the develop- 
 ment of the several ideas of units of time, of space and 
 of weight, and of a whole consisting of equal parts, or 
 in other words of number and of a numeral system. 
 
 This development — this adequate development of 
 the units of time, space, and weight — is suggestive 
 of that development of the capacity of the mind of 
 man which, availing of the knowledge of man's 
 experience in the past, preserved from perishing 
 by the art of writing, is, or should be, the aim and 
 object of the education of all men. The best 
 superstructure of special technical knowledge is 
 
76 The Changing Order 
 
 built on the broad foundation of general intellec- 
 tual and moral culture. 
 
 In an age of great technical and industrial devel- 
 opment, the tendency, almost the irresistible 
 tendency, is towards pure materialism — the exalt- 
 ing of practical accomplishment in the production 
 of wealth over the less tangible results of the study 
 of history, literature, and art; and so there is on 
 the part of many men who have attained success 
 in business life, or in the practical sciences, a 
 disposition to extol such accomplishments beyond 
 all others, and to undervalue, or not at all to 
 realize the value of, mental culture in any other 
 than purely technical lines. 
 
 It is to be noted, however, that the greatest 
 discoveries in science followed that great intel- 
 lectual awakening which is known as the Renais- 
 sance. The revival of learning, the desire for 
 general culture, which found inspiration in the 
 study of the art, the literature, and the history of 
 the Greeks and Romans, produced as its first 
 fruits the marvelous architecture of Bramante, 
 Michelangelo, and Brunelleschi : the Basilica of 
 St. Peter's in Rome, and the Duomo of Florence; 
 the paintings of Leonardo, Raphael, and Titian; 
 the sculpture of Ghiberti, Luca della Robbia, 
 Donatello, and Michelangelo; the immortal Di- 
 vine Comedy of Dante, and the tender lyrics 
 of Petrarch. Then followed the philosophy of 
 Erasmus and Colet and More, the epic poem of 
 Ariosto, and the historical work of Guicciardini. 
 
Engineering and Culture 77 
 
 Upon this splendid foundation of art and poetry 
 and letters was built the stately structure of 
 modern science. 
 
 Copernicus while studying mathematics devoted 
 his spare time to painting. Galileo was an earnest 
 student of literature, accomplished as a Greek 
 and Latin scholar, a musician, and a painter, when 
 the vibrations of the great swinging lamp at Pisa 
 first directed his attention to a problem in physics 
 which led to his great discoveries. Newton pur- 
 sued his studies at Trinity College, Cambridge, 
 and was graduated in 1665 with the degree of 
 Bachelor of Arts. Galvani and Volta, Priestley 
 and Lavoisier, were contemporaries of Rousseau 
 and the Encyclopedists. The steam engine was 
 invented by Watt, the locomotive by Stephenson, 
 and the spinning jenny by Arkwright, at a time 
 when the whole civilized world was in a ferment 
 of intellectual agitation concerning the rights of 
 man and the theories of social order, and when the 
 history and the literature of the ancient world were 
 eagerly studied for light on the fundamental prin- 
 ciples of civil government and individual liberty. 
 
 Almost without exception, the great men whose 
 names have been written large in the history of 
 science were men of broad culture, often almost 
 as proficient in literature and art as in science. 
 
 Leonardo da Vinci, that nearly universal genius, 
 the reviver of the science of hydraulics, the inven- 
 tor of the camera obscura, and of innumerable 
 designs for engines of war, tunnels, and canals for 
 
78 The Changing Order 
 
 traffic, united, as is well known, these achievements 
 with the highest accomplishments in painting and 
 sculpture. His training was obtained under Ver- 
 rocchio, goldsmith, sculptor, painter, and teacher, 
 and the universality of his education is testified 
 to not only by his early sketches and paintings, 
 but by the tales of his daring architectural and 
 engineering projects. Bramante and Brunelleschi 
 are known almost as well for their proficiency in 
 art and letters as because of St. Peter's Church 
 and the Duomo of Florence. The versatile 
 Franklin, the all- wise Humboldt, the accomplished 
 Bunsen, and the cultured Priestley, are illustrations 
 of the fact that mere technical education alone 
 has never secured the first rank in the life of the 
 community. The written word is more imperish- 
 able than marble and steel. 
 
 "The aspiring youth that fired the Ephesian 
 dome outlives in fame the pious fool that raised 
 it." 
 
 The epic tales of Homer, the Divine Comedy 
 of Dante, the logic of Aristotle, the human drama 
 of Shakespeare, all teach the lesson of human life, 
 in the knowledge of which is to be found power to 
 comprehend and help and guide and lead men, 
 which is the supremest accomplishment of man. 
 
 The temple of Diana at Ephesus has crumbled 
 away, but the tragedies of ^Eschylus and the 
 comedies of Euripides remain. The Roman Forum 
 is an interesting collection of ruins. Only frag- 
 ments remain to indicate to us the skill of the 
 
Engineering and Culture 79 
 
 forgotten engineers who built the great aque- 
 ducts and bridges and temples of imperial Rome. 
 But the Odes and Satires of Horace, the Letters of 
 Pliny, and the Lives of Plutarch make the great 
 men of Rome as real to us as those of yesterday 
 in France or England. From them, from their 
 experience, their ideas, their failures, and their 
 accomplishments, many an inventive mind has 
 caught inspiration and has had imagination 
 stimulated to the solution of great problems in 
 art, in architecture, and in science. The man 
 who goes out into the world without the knowl- 
 edge of these humanities is therefore lacking in a 
 mental equipment which leaves him subject to a 
 serious handicap. True, he may make it up after 
 leaving college, but it is difficult, and requires 
 exceptional character. 
 
 Robert Louis Stevenson, writing of his grand- 
 father Robert, one of the most distinguished 
 engineers of his time, describes him as "a man 
 of the most zealous industry, greedy of occupation, 
 greedy of knowledge, a stern husband of time, a 
 reader, a writer, unflagging in his task of self 
 improvement. " 
 
 Such a man will overcome all lack of early 
 advantages. But general cultivation to-day is so 
 widespread, that the man who enters upon his life 
 work with a mere technical training, when he 
 comes in competition with men of broad culture 
 is at a decided disadvantage. 
 
 That the faculty of this institution shares these 
 
80 The Changing Order 
 
 views is demonstrated by this announcement in 
 the Register: 
 
 The desirability of a liberal training for an engineer 
 has led the University to offer courses in which, by 
 combining the studies of the several technical depart- 
 ments with the work of the course in arts and science, 
 a student may gain both a literary and professional 
 education, with the corresponding degrees, in six years. 
 
 That this is not an extravagant expenditure 
 of time will be appreciated when it is considered 
 that the work of a course in arts and law requires 
 seven years, and in arts and medicine eight. 
 
 To quote the Register again: 
 
 These courses possess decided advantages over the 
 usual engineering curriculum of four years, the studies 
 of which are necessarily almost wholly technical, and 
 the value of the wider training for which they provide 
 far outweighs the extra expenditure of time. 
 
 The combination of the ideals of purely technical 
 study with broad university culture, offers to 
 students the opportunity of becoming not merely 
 engineers, but educated gentlemen. 
 
 I have thus far dwelt only upon the practical 
 advantages of this broader than merely technical 
 education. But the refining influence and the in- 
 tellectual pleasures opened by such study should 
 not be lost sight of. 
 
 James Russell Lowell once exclaimed out of the 
 fullness of his scholarly mind: 
 
Engineering and Culture 81 
 
 "Neither would I have you neglect the humani- 
 ties. I would wish that every one of you could 
 enjoy in the originals, Homer and Virgil and 
 Dante and Rabelais and Goethe." In an essay 
 written shortly before his death he revised this 
 list somewhat, and characterized Homer, Dante, 
 Shakespeare, Cervantes, and Goethe as "the five 
 indispensable authors. " Certainly if the work of 
 any one of them were eliminated from our litera- 
 ture and speech, there would be ragged spaces in 
 the fabric. 
 
 Is it not then well worth the time and effort 
 of an engineer or a chemist, as well as of a lawyer 
 or doctor, to study and know the works of these 
 great, these indispensable authors? From them 
 each of us may catch something of their knowledge, 
 their insight, their inspiration; and with quick- 
 ened imagination and sharpened perceptions may 
 more clearly see the solution of problems which 
 have baffled us. As the sage of Israel long ago 
 declared : 
 
 Wisdom is the principal thing; therefore get wis- 
 dom, and with all thy getting get understanding. . . . 
 Take fast hold of instruction, let her not go, keep her; 
 for she is thy life. 
 
 6 
 
VII 
 
 THE STUDY OF LAW AND THE WORK 
 OF LAWYERS 1 
 
 THERE can be no higher mission in life than 
 the work of educating men in a knowledge of 
 the laws of our country, unless we regard law merely 
 as described in Blackstone's definition, "a rule 
 of civil conduct prescribed by the supreme power 
 in a state, commanding what is right and pro- 
 hibiting what is wrong. " 2 But if we consider our 
 laws as the expression of the will of God working 
 through his people — the manifestation of their 
 sense of right and justice; sometimes, as is true 
 of all human institutions, clouded by misunder- 
 standing and misapplication, but always, in so far 
 as they are permanent and vital, reaching out to 
 establish justice and insure domestic tranquillity, 
 then we come to a realization that the study of the 
 law has a higher aim than the mere ascertainment 
 of police regulations. 
 
 No better description ever has been given of the 
 
 1 Substance of an address before the Law School of Georgetown 
 University. 
 
 2 i Bl. Com., p. 44. 
 
 82 
 
The Study of Law 83 
 
 Anglo-Saxon conception of law than that embodied 
 in the quaint language of the statute 25 Henry VIII, 
 c. 21 j in which the Parliament addressed the King 
 in these words: 
 
 This your grace's realm, recognizing no superior 
 under God but only your grace, hath been and is free 
 from subjection to any man's laws, but only to such as 
 have been devised, made, and ordained within this 
 realm, for the wealth of the same; or to such other 
 as, by sufferance of your grace and your progenitors, 
 the people of this your realm have taken at their free 
 liberty, by their own consent, to be used among 
 them; and have bound themselves by long use and 
 custom to the observance of the same; not as to 
 the observance of the laws of any foreign prince, 
 potentate, or prelate; but as to the customed and 
 ancient laws of this realm, originally established as 
 laws of the same, by the said sufferance, consents, and 
 custom; and none otherwise. * 
 
 It is characteristic of the thought and character 
 of our British ancestors, that side by side with a 
 studied courtesy towards their sovereign, there 
 runs through this statute a strain of conscious 
 recognition of the subjection of even the sovereign 
 himself to the will of the people. They declare 
 themselves free from any man's laws except such 
 as have been devised, made, or ordained within 
 the realm for the commonwealth, and such as by 
 immemorial custom and usage, the people "have 
 
 1 1 Bl. Com., p. 80. 
 
84 The Changing Order 
 
 taken at their free liberty, by their own consent 
 to be used among them." 
 
 This is the language of a people who three 
 hundred years before had extorted from King 
 John the solemn covenant: 
 
 No free-man shall be seized, or imprisoned, or 
 dispossessed, or outlawed, or in any way destroyed; 
 nor will we condemn him, nor will we commit him to 
 prison, excepting by the legal judgment of his peers, 
 or by the laws of the land. 
 
 To none will we sell, to none will we deny, to none 
 will we delay right or justice. 
 
 A covenant solemnly made, sworn, and sealed — 
 
 that the men in our kingdom have and hold the afore- 
 said liberties, rights, and concessions, well and in peace, 
 freely and quietly, fully and entirely, to them and 
 their heirs, of us and our heirs, in all things and places 
 forever, as is aforesaid. r 
 
 The conception that the people themselves are 
 the source of law as well as of government; that 
 kings are but one kind of symbol of popular 
 sovereignty, and that — 
 
 when a long train of abuses and usurpations, pursuing 
 invariably the same object, evinces a design to reduce 
 them [the people] under absolute despotism, it is their 
 right, it is their duty, to throw off such government, 
 and to provide new guards for their future security, 
 
 1 Magna Charta, Barrington, Phila., 1900, pp. 239, 250. 
 
The Study of Law 85 
 
 found its most concrete formulation in that passage 
 in the Declaration of American Independence 
 which is inextricably interwoven into the woof and 
 fabric of American institutions : 
 
 We hold these truths to be self-evident, that all men 
 are created equal; that they are endowed by their 
 Creator with certain unalienable rights; that among 
 these, are life, liberty, and the pursuit of happiness. 
 That, to secure these rights, governments are insti- 
 tuted among men, deriving their just powers from 
 the consent of the governed. 
 
 Among a people, therefore, whose laws are self- 
 imposed — made by themselves for their common 
 weal, or by which they have bound themselves by 
 immemorial usage and custom ; and whose govern- 
 ment is created by themselves and for themselves — 
 a knowledge of domestic laws and institutions is 
 essential to a continuance of liberty and justice. 
 
 This was well understood by those who estab- 
 lished our form of government. Washington, 
 in his Farewell Address, advised posterity to resist 
 "the spirit of innovation upon its principles 
 however specious the pretexts," especially warn- 
 ing against alterations in the form of the Constitu- 
 tion "which will impair the energy of the system 
 and thus undermine what cannot be directly 
 overthrown." The best advice he could give as 
 to the means of preventing this impairment and 
 ultimate destruction, was to promote "as an 
 object of primary importance, institutions for the 
 
86 The Changing Order 
 
 general diffusion of knowledge." For, he de- 
 clared, "in proportion as the structure of a govern- 
 ment gives force to public opinion, it is essential 
 that public opinion be enlightened." 
 
 I take it, therefore, that the object of all properly 
 conducted law schools throughout our country, 
 is not merely to train artisans in the law to exercise 
 their mechanical functions as attorneys, but to 
 teach the young men of this land the principles of 
 the laws by which we govern ourselves, and the 
 history and the nature of our institutions, to the 
 end that there may be disseminated among our 
 people such an understanding that enlightened 
 public opinion may control the enforcement of our 
 laws, the administration of our government, and 
 all projects for the amendment or alteration of 
 laws or institutions. 
 
 In that charming old-fashioned novel, Ten 
 Thousand a Year, Dr. Warren describes a conversa- 
 tion between his hero, Mr. Aubrey, who had been 
 robbed of his estates by the chicaneries of the 
 attorneys, Quirk, Gammon, & Snap, and the 
 Attorney-General of England whom he was con- 
 sulting as to the advisability of taking up the 
 practice of the law as a means of livelihood. The 
 Attorney-General was not very encouraging as 
 to immediate pecuniary results. 
 
 Certainly [he said] I have no cause to be dissatisfied ; 
 I've done pretty well; but I can tell you that eight 
 years passed over me before I earned enough a 
 year to pay my laundress! 
 
The Study of Law 87 
 
 I wonder how many men would prepare them- 
 selves for the practice of the law to-day if they 
 believed that there was even a possibility of 
 having to wait eight years before earning enough 
 to pay the laundress ! 
 
 But, the Attorney-General added — and it is 
 true to-day and here — "if you determine to get on 
 at the bar, you will." 
 
 Certainly [he said] law is difficult; but its difficulty is 
 often greatly overrated, especially by imperfectly edu- 
 cated, and ill-disciplined, quick, sharp men. . . . What 
 is wanted is a clear head ; a good memory ; strong com- 
 mon sense ; fixity of purpose ; an aptitude for analysis 
 and arrangement: before these combined, the difficul- 
 ties of law fly like the morning mist before the sun. x 
 
 The students of modern American law schools 
 are not left to haphazard and desultory methods 
 of study such as obtained in the time whereof Dr. 
 Warren wrote. At an earlier time, the law student 
 in England enjoyed facilities of study that in the lat- 
 ter part of the eighteenth and the early nineteenth 
 century fell into disuse. Thus Fortesque, writing 
 in the time of Henry VI, described the advantages 
 enjoyed by the students of law at that time in Eng- 
 land. The place of their study — the Temple — 
 he noted was 
 
 much more commodious and proper for the purpose 
 than any University. It is situated near the King's 
 
 1 Warren, Ten Thousand a Year, Tauchnitz Ed., 1845, vo *- "•» 
 p. 194. 
 
88 The Changing Order 
 
 Palace at Westminster, where the Courts of Law are 
 held, and in which the Law- Proceedings are pleaded 
 and argued, and the resolutions of the Court, upon 
 cases which arise, are given by the Judges, men of 
 gravity and years, well read and practiced in the laws, 
 and honored with a degree peculiar to them. Here, 
 in Term-Time, the students of the law attend in great 
 numbers, as it were to public schools, and are there 
 instructed in all sorts of Law-Learning, and in the 
 practice of the Courts: . . . the place of the study 
 is not in the heart of the city itself, where the great 
 confluence and multitude of the inhabitants might 
 disturb them in their studies ; but in a private place, 
 separate and distinct by itself, in the suburbs, near 
 to the Courts of Justice aforesaid, that the students, 
 at their leisure, may daily and duly attend, with the 
 greatest ease and convenience. 1 
 
 This is an apt description of an ideal place of 
 study. Whether or not the remainder of the 
 narrative would appeal to a modern American 
 student may be questioned. 
 
 Upon festival days and after the offices of the 
 church are over, they employ themselves in the study 
 of sacred and prophane history: here everything which 
 is good and virtuous is to be learned: all vice is dis- 
 couraged and banished. . . . The discipline is so 
 excellent that there is scarce ever known to be any 
 picques or differences, any bickerings or disturbances 
 amongst them. 2 
 
 1 The Laws of England, Translation by A. Amos, Cambridge, 
 1825, pp. 178-79. 
 3 Id., p. 186. 
 
The Study of Law 89 
 
 It is an old maxim that the law is a jealous 
 mistress. He who would acquire a thorough 
 knowledge of law must give himself to it heart and 
 soul. Especially during his novitiate must he 
 literally eat, drink, talk, and sleep law. He should 
 live in a community of those who are doing the 
 same. His effort should be always to get at 
 the underlying principle in whatever he is studying. 
 That principle should be to him like the thread 
 by which Theseus successfully escaped the laby- 
 rinth. And the Ariadne, from whose deft fingers 
 the line runs, must in his case be Clio, the Muse 
 of History. The laurel wreath she wears may be 
 won from her, and the fame of the student pro- 
 claimed through her trumpet, only if the papyrus 
 in her hand be searched diligently and its record 
 applied wisely. 
 
 But the students should not be left to wander 
 unaided through the wilderness of legal literature. 
 Wise guides must be furnished them for their 
 journey. Warning signs should be erected for their 
 benefit. Their footsteps should be directed along 
 well cut paths. In their progress they should 
 remember the legend of the sleeping beauty and 
 "be bold, be bold, and evermore be bold. Be not 
 too bold. " They should study thoroughly before 
 venturing to criticize or condemn. They must 
 beware of rash judgments. The statute laws of 
 the States and of the United States fill many 
 volumes. The unwritten or customary law is 
 found in those conceptions of right and justice 
 
90 The Changing Order 
 
 which are the result of a thousand years of civiliza- 
 tion, and which have found authoritative expres- 
 sion in many thousands of judicial opinions, 
 recorded in thousands of volumes. The duty of 
 instructors is to help the students to winnow out 
 of this mass those decisions which are the great 
 beacon lights of the law, and which once thoroughly 
 mastered will enlighten their understanding to 
 comprehend the law in its entirety. It was said 
 of Sir George Jessel, one of the greatest judges 
 England ever produced : 
 
 His learning was profound, yet he was no mere 
 follower of precedent, no mere directory of cases. 
 He was able to take up the confused mass of the law 
 and mould it to the ends of justice. 
 
 In the case of Re Hallett 's Estate x he delivered one 
 of the greatest of his opinions. In the course of it he 
 expressed his views of the proper use of authorities : 
 
 The only use of authorities, or decided cases 
 is the establishment of some principle which the 
 Judge can follow out in deciding the case before 
 him. There is, perhaps, nothing more important in 
 our law than that great respect for the authority 
 of decided cases which is shewn by our tribunals. 
 Were it not for that our law would be in a most dis- 
 tressing state of uncertainty. 
 
 Lord Bowen likened the common law to an 
 "arsenal of common-sense principles," and he used 
 1 13 Ch. D., 676. 
 
The Study of Law 91 
 
 that arsenal, whenever possible, to overcome mere 
 technical obstructions to justice, by the applica- 
 tion of fundamental principles of right and morals. 
 
 "There is no magic at all in formalities/ ' he 
 contended. ■ 
 
 In most cases, when a supposed rule of the com- 
 mon law would work iniquity, it will be found on 
 careful investigation that the true principle has 
 been lost sight of, and has become encrusted over 
 by a later growth resulting from misunderstanding 
 and misapplication. In the long run the people's 
 sense of justice finds expression in principles of 
 immutable right. 
 
 Yet as Lord Bowen said in Dashwood v. Magniac : 
 
 It is not a valid objection to a legal doctrine that 
 it will not be always easy to know whether the doctrine 
 is to be applied in a particular case. The law has to 
 face such embarrassments. 
 
 The boldness with which a Jessel or a Bowen 
 applied the principles of the law, seemingly care- 
 less of their authority, was only the deft skill of 
 an expert swordsman, which would be fatal to one 
 of less adroitness. 
 
 Plutarch tells us that even the great Demos- 
 thenes never made any oration on the sudden, 
 
 and that oftentymes when he was sette in the assem- 
 ble, the people would call him by his name, to say 
 his opinion touching the matter of counsell then in 
 
 1 Dashwood v. Magniac (1891), 3 Ch., 306. 
 
92 The Changing Order 
 
 hand: howbeit that he never rose upon their call, 
 unless he had first studied the matter well he would 
 speake of. 1 
 
 I would that, like wise old Odysseus, I could com- 
 mand those winged words that move the hearts 
 of men to impress upon every young man the 
 importance of his thoroughly mastering the 
 principles of the law in the years of his preparation 
 for the bar. The law is not an exact science, and 
 yet it is not absolutely empirical. It is founded 
 upon immutable principles of morality and justice. 
 The application of those principles through a thou- 
 sand years of Anglo-Saxon civilization has gradually 
 evolved a code of rules which can be understood 
 only by a knowledge of their history. Yet in 
 large measure they are felt, recognized, acted upon, 
 believed in by thousands, hundreds of thousands 
 of people who know nothing of their origin, but 
 recognize in them a practicable standard of con- 
 duct. But a lawyer must know more about them. 
 He must know what principle is generally applica- 
 ble to a given state of facts, so that with this 
 governing principle in mind, he may turn to ad- 
 judged cases and statutes to determine the precise 
 application of the principle which the given cir- 
 cumstances require. Such ready command is 
 only possible if one have a thorough familiarity 
 with the history of the origin, growth, and develop- 
 ment of the law sought to be applied. 
 
 1 North's Plutarch, v., p. 288. 
 
The Study of Law 93 
 
 It was said of Judge Cooley that his "remark- 
 able success as a law writer was largely due to his 
 ability to extract from a multitude of cases the 
 essential principles involved, to arrange them in 
 logical order, and to state them, with the reason- 
 ing on which they were based, accurately, clearly, 
 and briefly. " x 
 
 The same ability would lead to like success in a 
 counsel or an advocate. 
 
 A biographer of Judge Jeremiah S. Black re- 
 cords: 
 
 The keynote of his method is probably to be found 
 in his own remarks upon his despair when first set to 
 study the law. His heart sank within him when he 
 first saw the tools he must handle, the multiplicity 
 of those sources from which he must draw his knowl- 
 edge of the law. " I did not know the value of general 
 principles, or how legal problems could be solved by 
 the application of fundamental maxims." Through 
 the pain and perplexity of the following years he 
 had learned that lesson. ... It was not ignorance 
 of, but mastery over, precedent, which made him 
 apparently independent of the authority of decided 
 cases, and freed his recorded decisions from the useless 
 multiplication of citations upon points which he knew 
 to be no longer questionable. 2 
 
 A like absence of the use of precedents is 
 noticeable in the opinions of Chief Justice Mar- 
 
 1 Dean Hutchins, in Great American Lawyers, vol. vii., p. 480. 
 
 2 Margaret S. Klinglesmith, in Great American Lawyers, vol. 
 vi., p. 13. 
 
94 The Changing Order 
 
 shall. "Brother Story will furnish the authori- 
 ties," he is said to have observed, after having 
 delivered one of his matchless expositions of the 
 law. 
 
 The young men now engaged in the study of the 
 law in our leading American law schools are 
 fortunate in the opportunities for public service 
 which their studies will afford them, whether they 
 shall be applied as a means of livelihood in the 
 practice of the profession, or as a means of helping 
 to create that enlightened public sentiment upon 
 which so absolutely depends the permanence of 
 free institutions. 
 
 It has often been said of the United States that 
 it is a nation of lawyers; and when the part 
 played by lawyers in the molding and preserva- 
 tion of our institutions is considered, the charac- 
 terization may be accepted as just. Yet it is a 
 matter of common remark that lawyers to-day 
 do not enjoy the influence which they formerly 
 possessed. The explanation is not far to seek. 
 During the quarter of a century just past, the great- 
 est pecuniary rewards for lawyers were earned in 
 the application of legal knowledge and skill in 
 the organization and conduct of great commercial 
 enterprises in corporate form, and they too often 
 were led to become either the business associates, 
 or the salaried employees of their clients, thereby 
 losing their distinctive position as counsel, taking 
 on the nature of joint adventurers, contributing 
 
The Study of Law 95 
 
 their knowledge and capacity to the capital of a 
 given enterprise, and sharing with their associates 
 not only in the pecuniary success or failure, but in 
 the resultant public criticism. 
 
 The period since the close of the Civil War has 
 been one of the most extraordinary industrial 
 and commercial development ever known in any 
 land during any other period of equal length in 
 recorded history. The natural development of 
 our great resources was aided by wonderful dis- 
 coveries in science, and the application of them to 
 mining, manufacture, transportation, and dis- 
 tribution of product. Bold and skillful men seized 
 upon the opportunities thus presented to realize, 
 and they did realize from the public, profits beyond 
 the wildest dreams of earlier imagination. 
 
 Able lawyers, with specialized training, devised 
 the legal machinery by which these great enter- 
 prises were organized, developed, and combined, 
 and through which vast industries were brought 
 under centralized control. 
 
 An absence of the personal responsibility which 
 inheres in partnership relation, continuity of 
 existence irrespective of changing individual inter- 
 ests, and the ability to split up interests in the 
 capital of an undertaking, and to dispose of any 
 part at will without affecting the legal entity, were 
 necessary to enable these great businesses to be 
 promoted, and vast projects realized. These 
 results were secured — they could only be secured — 
 through legislative action. States vied with each 
 
96 The Changing Order 
 
 other in offering facilities for corporate organiza- 
 tion. Some of them virtually offered the boon of 
 perpetual corporate life with power to do, not 
 merely all that an individual could do, but things 
 which no individual could have dreamt of doing, 
 and with no accountability to any one for any 
 acts done. What amounted to partnerships be- 
 tween corporations, without the characteristic 
 liability of partners for the debts of the firm, were 
 authorized, fostered, and, encouraged. The most 
 efficient instruments for the creation of monopoly 
 were handed over the counter of every State 
 Legislature. 
 
 But when the people began to take alarm at the 
 growing power of such organizations, it was the 
 lawyers of the country who suggested remedies for 
 the evil, to be worked out by the application of 
 old established principles to the new conditions. 
 The people in many States had generously, even 
 recklessly, conferred the privilege and convenience 
 of corporate machinery. But by the exercise of the 
 power of amendment, wisely reserved in most char- 
 ters, it was found that the people might restrain 
 and correct abuses of privileges they had granted. 
 The power to regulate commerce among the States 
 and with foreign nations had been conferred upon 
 the national government by the Constitution of the 
 United States. Commerce was recognized by 
 the highest judicial authority as having a compre- 
 hensive meaning far more extensive than mere 
 trade. It embraced all forms of intercourse, and 
 
The Study of Law 97 
 
 the power to regulate it involved the establishment 
 of rules by which such intercourse should be 
 governed. No State under the guise of creating 
 a corporation could charter a commercial libertine 
 against the paramount control of Congress over 
 interstate and foreign commerce. There was 
 another principle of the common law, too, the 
 application of which, it began to be realized, was 
 not limited to any particular field, but was co- 
 extensive with the principle itself. This was the 
 principle formulated by Lord Chief Justice Holt 
 upwards of two hundred years ago 1 quoted by 
 Chief Justice Waite in support of a famous decision 
 of the Supreme Court of the United States that a 
 State may regulate the charges of a warehouseman 
 for the storage of wheat. 2 
 
 That principle he stated in these words: 
 
 Property does become clothed with a public interest 
 when used in a manner to make it of public conse- 
 quence, and affect the community at large. When, 
 therefore, one devotes his property to a use in which 
 the public has an interest, he, in effect, grants to the 
 public an interest in that use, and must submit to be 
 controlled by the public for the common good, to the 
 extent of the interest he has thus created. He may 
 withdraw his grant by discontinuing the use ; but, so long 
 as he maintains the use, he must submit to the control. 
 
 The announcement of this decision in 1876 
 helped to pave the way for the enactment of the 
 
 1 In De Portibus Maris, i Harg. Law Tracts, 78. 
 3 Munn v. Illinois, 94 U. S., 113. 
 7 
 
98 The Changing Order 
 
 first act for the regulation of interstate commerce 
 in 1887, and the succession of statutes affecting 
 the management of interstate railways enacted 
 by Congress in subsequent years. The Sherman 
 Anti-trust Law of 1890, sought to apply the power 
 to regulate commerce in such manner as to check 
 the tendency of the great industrial organizations 
 to effect monopolies, and to prohibit contracts, 
 combinations, and conspiracies in restraint of 
 interstate and international commerce. 
 
 The work of such eminent lawyers as Reagan and 
 Cullum, Edmunds, Thurman, Hoar, Sherman, and 
 Cooley, attest the influence of the educated lawyer 
 in dealing with these great fundamental problems 
 of national economics. Judicial decision has 
 affirmed the soundness of the principles thus 
 invoked in their application to the problems dealt 
 with by legislative action. Perhaps the full effect 
 of the principle of legislative control over property 
 affected with a public use has not yet been fully 
 grasped. But it may be suggested that in that 
 principle lies a means for the effectual protection 
 of the public from injury or destruction through 
 any form of industrial organization which is so 
 used — to employ the language of Chief Justice 
 Holt — as to make it a matter of public consequence, 
 and to affect the community at large. 
 
 The thought and the work of the great lawyers 
 I have named, and of many others in less con- 
 spicuous fields, who wrought out solutions of these 
 vast problems, should redeem the profession from 
 
The Study of Law 99 
 
 the reproach of being merely the trained experts 
 of selfish forces. But the conspicuous pecuniary 
 rewards of those who were identified with the great 
 corporate interests have been used to fill the pop- 
 ular mind with distrust of an entire class, and for 
 a time even the disinterested and devoted labors 
 of such men as I have mentioned, could not redeem 
 the bar from the reproach of being antagonistic to 
 the interests of the people. Perhaps the envy 
 of the unsuccessful and the unskilled also has con- 
 tributed somewhat to discredit their more able or 
 more prosperous professional brethren. Be that 
 as it may, the great opportunity that is open to the 
 men entering upon the profession of law to-day is 
 to reinstate it in the place to which it is entitled, 
 by learning, by character, and by usefulness, in 
 any community in which popular government is 
 established and maintained. 
 
 There are many avenues open through which 
 this may be accomplished — open not only to them 
 who adopt the practice of law as a means of liveli- 
 hood, but to them who shall enter into public life 
 and become legislators or administrators in the 
 government of the State or the Nation, and to 
 them who in business or private life may use and 
 apply the lessons learned in this institution. 
 
 In a certain sense, the greatest opportunity 
 is that of the practitioner. His life will afford 
 him constant opportunity to test the practical 
 value of theory. His danger will be the tendency 
 to lose sight of the ethical aim of all law in the 
 
ioo The Changing Order 
 
 intense technical interest of the game. Lawyers 
 are not only by nature and training conservative, 
 but they are apt to become so enamored of the 
 technical skill involved in legal procedure, as to lose 
 sight of the fact that rules of practice are devised 
 merely to the end that litigants may present the 
 merits of their controversy to a tribunal for de- 
 cision, in the simplest, most expeditious mode con- 
 sistent with apprising each of the contention of the 
 other, and giving him an opportunity to prepare 
 for the trial. The old English lawyers made a 
 fetish of pleading — the written statements of their 
 case made by the respective litigants in advance 
 of trial. The modern American lawyers have made 
 a fetish of procedure, and have created a mass of 
 artificial rules which in some States presents as 
 great an obstacle to reaching the judgment seat, 
 as did the common law rules of pleading before the 
 English judicature reform acts. 
 
 It will be the high privilege of the young men 
 now coming into the profession to contribute to the 
 work of clearing away this mass of worse than 
 useless machinery, and of substituting a few simple 
 regulations for the legislative minutiae that now 
 make up our codes of procedure. But to the 
 effective accomplishment of such reform, an ac- 
 curate knowledge of conditions and requirements 
 is indispensable. More harm is done by ill-con- 
 sidered reforms than by a continuance of existing 
 evils. It is always important, too, that changes 
 in law or procedure shall be developed along lines 
 
The Study of Law 101 
 
 of established and well-recognized principles, 
 rather than across the grain, as it were, with no 
 continuity between the new regulation and the 
 old. 
 
 Finally, may I add, that all law to be effective 
 must be based on a broad sense of right. It is 
 that fact which gives to the customary or unwritten 
 law a greater sanctity in the minds of the people 
 than acts of the Legislature. 
 
 The greatest safeguard of popular liberty lies 
 in the inherent respect for their law felt by a self- 
 governing people. The enactment of statutes 
 which are not based upon eternal principles of 
 justice, but upon mere temporary or class expedi- 
 ents, tends to impair or destroy this attitude of the 
 people towards their law. 
 
 Respect for law is the Alpha and the Omega of 
 a free government. That respect can exist only 
 when the law is that which the people establish 
 "at their free liberty," which is just to all classes, 
 and which binds the hearts and the con- 
 sciences of men to respect even the law they may 
 violate. 
 
 With such laws in the hearts of the people and 
 on their statute books, we may say as did the 
 great lawgiver of Israel : 
 
 Keep therefore and do them ; for this is your wisdom 
 and your understanding in the sight of the nations, 
 which shall hear all these statutes, and say Surely this 
 great nation is a wise and understanding people. 
 
 For what nation is there so great, who hath God so 
 
102 The Changing Order 
 
 nigh unto them, as the Lord our God is in all things 
 that we call upon him for? 
 
 And what nation is there so great, that hath statutes 
 and judgments so righteous as all this law, which I set 
 before you this day? x 
 
 1 Deut. iv., 6, 7, 8. 
 
VIII 
 
 RECENT INTERPRETATION OF THE 
 SHERMAN ACT " 
 
 THE only legitimate end and object of all 
 government is the greatest good of the 
 greatest number of the people. The means by 
 which this end is attained, vary in accordance with 
 the experience and the temperament of the people. 
 Government is necessarily more or less of an 
 experiment at all times, but as men have been 
 making similar experiments since the dawn of 
 recorded history, the waste of repeating unsuccess- 
 ful experiments of the past may be avoided by 
 studying the records of the results of earlier 
 effort. Other things being equal, all thoughtful 
 persons will agree, the probabilities of success 
 will be greater if action be taken along lines 
 which in the past, under similar conditions, has 
 been attended with benefit to the common weal. 
 All history demonstrates the fact that the great- 
 est prosperity to the State has resulted from 
 allowing to individual effort in trade and com- 
 
 1 Address before the Michigan State Bar Association, Battle 
 Creek, Mich., July 6, 191 1. 
 
 103 
 
104 The Changing Order 
 
 merce the utmost freedom consistent with the 
 protection of society at large. 
 
 Yet the experience of the remote, as well as of 
 the recent past, demonstrates the necessity of some 
 governmental regulation of private enterprise, in 
 order that the fruits of industry may not be entirely 
 garnered into a few hands, and that the freedom 
 of individual effort may not be unduly restrained. 
 
 We need look no further than to the history of 
 England, from which we derive most of our con- 
 ceptions of civil liberty, for evidence of the char- 
 acter of evils affecting trade and commerce which 
 commercial prosperity tends to develop, and of the 
 methods which have proved most effective in 
 restricting those evils. 
 
 The first statute enacted in England in 1436 
 against agreements in restraint of trade 1 was 
 directed against regulations made "by persons in 
 confederacy" for their " singular profit and the 
 common damage of the people. " Note that even 
 at that early date, the action of the Legislature was 
 directed at curbing the selfish exercise of power by 
 a few for their own benefit, but to the common 
 damage of the people. 
 
 The considerations upon which contracts in 
 restraint of trade were held void at common law, 
 as our Supreme Court has often pointed out, were : 
 (1) the injury to the public by being deprived of the 
 restricted party's industry; and (2) the injury to 
 the party himself by being precluded from pur- 
 
 1 15 Henry VI, re-enacted 1503, 19 Henry VI, c. 7. 
 
Recent Interpretation of Sherman Act 105 
 
 suing his occupation, thus tending to make him 
 more or less of a public charge. l In the case of a 
 corporation chartered by a State to carry on a 
 particular business, any agreement voluntarily en- 
 tered into by it which impaired or restricted in 
 any material degree its power to discharge the 
 functions conferred upon it by the State, was 
 necessarily contrary to public policy and void. 2 
 
 Monopolies in trade have been at all times, under 
 all forms of government, regarded as obnoxious 
 to the general welfare. They were early declared 
 to be contrary to the law of England, and the 
 outburst of popular resentment to the grant by 
 Queen Elizabeth to certain of her favorites of the 
 exclusive right of dealing in particular commodi- 
 ties, compelled even that powerful monarch to 
 disclaim any intention to offend against the popu- 
 lar sense of right and justice of her subjects, and 
 to blame her advisers for the acts which she 
 formally disavowed. 3 
 
 The vice of monopoly was recognized in England 
 to be the power acquired by the monopolist to 
 control prices by excluding competition. With 
 the great development of the vast natural re- 
 sources of a new country, and the unprecedented 
 powers conferred by State legislation, throughout 
 the United States, upon associations of individuals 
 under corporate form, the opportunity and the 
 
 1 Gibbs v. Baltimore Gas Co., 130 U. S., 396, 409. 
 
 * People v. N. River Sugar Ref. Co., 54 Hun., 354. 
 
 * D'Ewes, Journal of the Parliaments of Elizabeth, p. 652. 
 
106 The Changing Order 
 
 machinery for the centralization of control over 
 great industries proved so tempting to cupidity, 
 that twenty odd years ago, even so busy, self- 
 satisfied a people as the prosperous citizens of these 
 United States, was aroused to the necessity of 
 checking the rapid tendency to the concentration 
 of control of great industries in a few hands. 
 While the State Courts and Legislatures attempted 
 to deal with the subject, it was soon recognized 
 that only the National Government could ade- 
 quately grapple with an evil which had become 
 national in its extent. The simple but unlimited 
 power vested in Congress "to regulate commerce 
 with foreign nations and among the several States 
 and with the Indian tribes, " furnished the general 
 government with sufficient jurisdiction to protect 
 the commerce of the nation from undue restraints 
 and monopolization. 
 
 So the act of July 2, 1890, was passed, declaring 
 in terms so comprehensive, yet so simple that it 
 has required two decades of judicial exposition to 
 bring their meaning home to the people with living 
 force, that " every contract, combination in the 
 form of trust or otherwise, or conspiracy in re- 
 straint of commerce among the States, or with 
 foreign nations," is illegal, and that every person 
 who shall monopolize or attempt to monopolize 
 any part of such trade or commerce, is guilty of a 
 misdemeanor; and that the United States Circuit 
 Courts sitting in equity shall have jurisdiction, at 
 the suit of the United States, to prevent and re- 
 
Recent Interpretation of Sherman Act 107 
 
 strain all violations of the act. Very slowly indeed 
 has a full consciousness of the meaning of this law 
 come over the intelligence of the American 
 people. The first effort to apply it, in the Knight 
 case, 1 proved abortive, partly because of an 
 imperfect recognition of the remedies which 
 should have been sought; partly because of a too 
 narrow conception of the extent of Congressional 
 power over interstate commerce. 
 
 It was then successfully directed in the Trans- 
 Missouri 2 and the Joint Traffic Association 3 cases 
 against agreements between interstate railroads 
 made to control rates of interstate transportation ; 
 but an extreme statement of the meaning of 
 the phrase "restraint of trade" enunciated in the 
 opinions of the court in those cases, became the 
 basis of a school of literal interpretation which 
 seemed bent upon reducing the law to an absurdity, 
 and thus creating a public sentiment which would 
 make impossible its enforcement. Yet the author 
 of those opinions, in the second of them, rejected 
 with some sarcasm the interpretation sought to 
 be placed upon his language in the earlier one. 
 Observing at the outset that no contract of the 
 nature described by counsel as those which he sug- 
 gested, would be invalidated by the application of 
 the meaning given by the Court to the words of the 
 act, was before the Court in the case under con- 
 sideration, and that there was, therefore, some 
 embarrassment in assuming to decide just how far 
 
 • 156 U. S., 1. " 166 U. S., 290. s 171 U. S. f 506. 
 
108 The Changing Order 
 
 the act might go in the direction claimed, Justice 
 Peckham said: 
 
 Nevertheless, we might say that the formation of 
 corporations for business or manufacturing purposes 
 has never, to our knowledge, been regarded in the 
 nature of a contract in restraint of trade or commerce. 
 The same may be said of a contract of partnership. 
 It might also be difficult to show that the appointment 
 by two or more producers of the same person to sell 
 their goods on commission was a matter in any degree 
 in restraint of trade. We are not aware that it has 
 ever been claimed that a lease or purchase by a farmer, 
 manufacturer, or merchant, of an additional farm, 
 manufactory, or shop, or the withdrawal from business 
 of any farmer, merchant, or manufacturer, restrained 
 commerce or trade within any legal definition of that 
 term ; and the sale of a goodwill of a business with an 
 accompanying agreement not to engage in a similar 
 business was instanced in the Trans-Missouri case as a 
 contract not within the meaning of the act ; and it was 
 said that such a contract was collateral to the main con- 
 tract of sale and was entered into for the purpose of en- 
 hancing the price at which the vendor sells his business. 
 
 In the Addyston Pipe case 1 it was held that the 
 act operated to invalidate an agreement between 
 members of an association of corporate manufac- 
 turers of iron pipe, made for the purpose of con- 
 trolling prices by suppressing competition among 
 themselves. Montague v. Lowry 2 was to the same 
 effect. 
 
 * 175 U. S., 227. 9 193 U. S., 38. 
 
Recent Interpretation of Sherman Act 109 
 
 In the Northern Securities case, it was held that 
 control of two competing lines of interstate railway 
 could not be acquired by vesting a majority of the 
 stock of each in a corporation organized under the 
 laws of New Jersey, without violating the act. 
 In the Swift case, 1 a combination between com- 
 petitors in the business of buying and shipping live 
 stock and converting it into fresh meats for human 
 consumption, suppressing bidding against each 
 other, and arbitrarily, from time to time, raising, 
 lowering, and fixing prices, and combining to make 
 uniform charges to the public, was also held within 
 the prohibition of the statute. 
 
 In the Danbury hat case, 2 a combination of indi- 
 viduals to prevent defendants (manufacturers of 
 hats) from manufacturing and shipping hats in 
 interstate commerce was condemned; and in the 
 Continental Wall Paper case, 3 a combination of 
 manufacturers of wall paper, fixing prices and 
 providing against sales except under agreements 
 between members of the combination, was held 
 to violate the law. 
 
 In the meantime, certain of the decisions had 
 drawn a line of differentiation, by holding that the 
 act was not intended to affect contracts which have 
 only a remote and indirect bearing upon commerce 
 between the States, 4 and that a covenant by the 
 vendor of an interstate business to protect the pur- 
 
 « 196 U.S., 375. 
 
 3 Loewe v. Lawler, 218 U. S., 274. 3 212 U. S., 227. 
 « Field v. Barber Asphalt Co., 194 U. S., 618; Hopkins v. 
 United States, 171 U. S., 578. 
 
no The Changing Order 
 
 chaser from competition for a reasonable period, 
 made as a part of the sale of the business and not as 
 a device to control commerce, was neither within 
 the letter nor the spirit of the act. * 
 
 While the intent of parties entering into a par- 
 ticular agreement or combination, etc., was held to 
 be immaterial, where the necessary inference from 
 the facts was that the direct and necessary result 
 of the agreement was to restrain trade ; yet in the 
 Swift case, Justice Holmes pointed out that intent 
 was almost essential to a combination in restraint 
 of commerce among the States, and was essential 
 to an attempt to monopolize the same. 
 
 Where acts are not sufficient in themselves to 
 produce a result which the law seeks to give them — 
 for instance, the monopoly — but require further acts 
 in addition to the mere forces of nature to bring that 
 result to pass, an intent to bring it to pass is necessary 
 in order to produce a dangerous probability that it 
 will happen ... But when that intent and the 
 consequent dangerous probability exist, this statute, 
 like many others, and like the common law in some 
 cases, directs itself against that dangerous probability 
 as well as against the completed result. 2 
 
 The proceeding against the American Tobacco 
 combination, brought before the Court for the first 
 time the question of the full interpretation of the 
 statute in its application to attempts to monopolize, 
 
 1 Cincinnati Packet Co. v. Bay, 200 U. S., 179. 
 a Swift & Co. v. United States, 196 U. S., 396. 
 
Recent Interpretation of Sherman Act in 
 
 and in deciding the case in the Circuit Court, 
 Judge Lacombe expressed the extreme view of the 
 school of literal interpretation, by asserting that 
 the act prohibited every contract which to any 
 extent operated to restrain competition in inter- 
 state commerce. 
 
 Size [he said] is not made the test: Two individuals 
 who have been driving rival express wagons between 
 villages in contiguous States, who enter into a com- 
 bination to join forces and operate a single line, re- 
 strain an existing competition; and it would seem 
 to make little difference whether they make such 
 combination more effective by forming a partnership 
 or not. 1 
 
 On the other hand, Circuit Judge Hook, in the 
 Standard Oil case, decided in the Eighth Circuit 
 after the decision in the Tobacco case, said: 
 
 The construction of the act should not be so narrow 
 or technical as to belittle the work of Congress, but on 
 the contrary it should accord with the great import- 
 ance of the subject of the legislation and the broad 
 lines upon which the act was framed. The language 
 employed in the act is as comprehensive as the power 
 of Congress in the premises, and the purpose was not 
 to hamper business fairly conducted, but adequately 
 to promote the common interest in freedom of com- 
 petition and to remove improper obstacles from the 
 channels of commerce that all may enter and enjoy 
 them. The wisdom of the law lies in its spirit as well 
 
 1 164 Fed., 702, 
 
ii2 The Changing Order 
 
 as in its letter, and unless they go together in its 
 construction and application justice goes astray. 
 
 Speaking of the application of the second section 
 of the act, he added that the modern doctrine with 
 respect to monopoly "is but a recognition of the 
 obvious truth that what a government should not 
 grant, because injurious to public welfare, the 
 individual should not be allowed to secure and 
 hold by wrongful means." 
 
 This being the state of the law, the four decisions 
 involving a construction of the act rendered by the 
 Supreme Court during the term just closed are of 
 especial interest. ■ The first case decided came up 
 on writ of error, brought by the United States to 
 reverse a judgment of the Circuit Court in New 
 York sustaining pleas in bar to an indictment for 
 conspiracy to restrain interstate commerce in 
 violation of the first section of the act. 2 The 
 facts stated in the plea showed that the conspiracy 
 had been originally entered into more than three 
 years before the finding of the indictment. The 
 Circuit Court had held that the crime was com- 
 pleted as soon as the conspiracy was formed. But 
 the indictment charged a continuing conspiracy 
 to eliminate competition. The Court said: 
 
 A conspiracy to restrain or monopolize trade by 
 improperly excluding a competitor from business 
 contemplates that the conspirators will remain in 
 business and will continue their combined efforts to 
 
 1 October Term, 1910. a U. S. v. Kissel, 218 U. S., 601. 
 
Recent Interpretation of Sherman Act 1 13 
 
 drive the competitor out until they succeed. If they 
 do continue such efforts in pursuance of the plan, the 
 conspiracy continues up to the time of abandonment 
 or success. 
 
 The facts set forth in the indictment as the 
 means by which the alleged purpose was to be 
 accomplished, showed that the acts committed by 
 the defendants were for the purpose of preventing 
 a competing company from engaging in business; 
 that this prevention continued and could only be 
 terminated by the affirmative act of the defendants, 
 which act had not been performed. The plea 
 was therefore held bad. 
 
 A conspiracy in restraint of trade [said Mr. Justice 
 Holmes] is different from and more than a contract 
 in restraint of trade. A conspiracy is constituted by 
 an agreement, it is true, but it is the result of the 
 agreement, rather than the agreement itself; just as 
 a partnership, although constituted by a contract, 
 is not the contract, but is a result of it. The contract 
 is instantaneous; the partnership may endure as 
 one and the same partnership for years. A conspir- 
 acy is a partnership in criminal purposes. That as 
 such it may have continuation in time is shown by the 
 rule that an overt act of one partner may be the act 
 of all without any new agreement specifically directed 
 to that act. . . . 
 
 The next case decided was that of Dr. Miles 
 Medical Company v. John D. Park & Sons Com- 
 pany. 1 That was a suit in equity brought by a 
 
 1 220 U. S., 373. 
 
ii4 The Changing Order 
 
 manufacturer of proprietary medicines prepared 
 in accordance with secret formulae, to prevent 
 dealings in them by third parties in violation of a 
 system of contracts with its purchasers, denomi- 
 nated as agents (wholesale distributing agents and 
 retail distributing agents), to maintain certain 
 prices fixed by it for all sales of its products at 
 wholesale or retail. The Court held that the 
 evidence showed that complainant had created — 
 
 a system of interlocking restrictions by which the 
 complainant seeks to control not merely the prices 
 at which its agents may sell its products, but the 
 prices for all sales by all dealers at wholesale or retail, 
 whether purchasers or sub-purchasers, and thus to fix 
 the amount which the consumer shall pay, eliminat- 
 ing all competition. 
 
 The Court quoted the description of the essential 
 features of the system given by Mr. Justice Lurton 
 in his opinion in the Circuit Court of Appeals, as 
 follows: 
 
 The contracting wholesalers or jobbers covenant 
 that they will sell to no one who does not come with 
 complainant's license to buy, and that they will not 
 sell below a minimum price dictated by complainant. 
 Next, all competition between retailers is destroyed, 
 for each such retailer can obtain his supply only by 
 signing one of the uniform contracts prepared for 
 retailers, whereby he covenants not to sell to anyone 
 who proposes to sell again unless the buyer is 
 authorized in writing by the complainant, and not to 
 
Recent Interpretation of Sherman Act 115 
 
 sell at less than a standard price named in the agree- 
 ment. Thus all room for competition between re- 
 tailers, who supply the public, is made impossible. 
 If these contracts leave any room at any point of the 
 line for the usual play of competition between the 
 dealers in the product marketed by complainant, it 
 is not discoverable. Thus a combination between 
 the manufacturer, the wholesalers, and the retailers 
 to maintain prices and stifle competition has been 
 brought about. 
 
 That these agreements restrained trade the 
 Court held to be obvious. That, having been 
 made, as the bill alleged, with most of the jobbers 
 and wholesale druggists, and a majority of the 
 retail druggists of the country, and having for their 
 purpose the control of the entire trade, they re- 
 lated directly to interstate as well as intrastate 
 trade, and operated to restrain commerce among 
 the several States, was also stated to be clear. 
 The Court analyzed and dismissed the contention 
 that the restraints were valid because they related 
 to proprietary medicines manufactured under a 
 secret process. It further held that a manu- 
 facturer cannot by rule and notice, in the absence 
 of contract or statutory right, even though the 
 restriction be known to purchasers, fix prices for 
 future sales. Reference was made in this regard 
 to the decision by the Supreme Court in the case 
 of Bobbs-Merrill Co. v. Strauss 1 that no such privi- 
 lege exists under the copyright statutes, although 
 
 * 210 u. S., 339. 
 
n6 The Changing Order 
 
 the owner of a copyright has the sole right to vend 
 copies of the copyrighted production, and it was 
 said that the manufacturer of an article of com- 
 merce not protected by any statutory grant was 
 not in any better case. The agreements in the 
 case at bar were obviously designed to maintain 
 prices after the complainant had parted with title 
 to the articles, and to prevent competition among 
 those who traded in them, and for that reason they 
 were held to be void. The Court cited a long line 
 of cases by which it had been adjudged that agree- 
 ments or combinations between dealers, having 
 for their sole purpose the destruction of compe- 
 tition and the fixing of prices, are injurious to the 
 public interests and void. 
 
 They are not saved by the advantages which the 
 participants expect to derive from the enhanced 
 price to the consumer. . . . And where commodi- 
 ties have passed into the channels of trade and are 
 owned by dealers, the validity of agreements to pre- 
 vent competition and to maintain prices is not to be 
 determined by the circumstance whether they were 
 produced by several manufacturers or by one, or 
 whether they were previously owned by one or by 
 many. The complainant having sold its product at 
 prices satisfactory to itself, the public is entitled 
 to whatever advantage may be derived from com- 
 petition in the subsequent traffic. 1 
 
 Following these two cases, the Supreme Court 
 next addressed itself to the decision of the case 
 • 220 U. S., 373, 408. 
 
Recent Interpretation of Sherman Act 1 1 7 
 
 of the two great monopolistic combinations — the 
 Standard Oil and the American Tobacco. 
 
 In the Standard Oil case, the Supreme Court 
 affirmed a decree of the Circuit Court which ad- 
 judged that the individual and corporate defend- 
 ants had entered into and were carrying out a 
 combination or conspiracy in restraint of inter- 
 state and foreign commerce in petroleum and its 
 products, such as was prohibited by the first 
 section of the act; and that by means of this 
 combination those defendants had combined and 
 conspired to monopolize, had monopolized, and 
 were continuing to monopolize a substantial part 
 of the commerce among the States, in the Terri- 
 tories, and with foreign nations, in violation of 
 Section 2 of the act. 
 
 This conclusion was based on the following con- 
 siderations, viz.: 
 
 1. Because the unification of power and control 
 over petroleum and its products, which was the inev- 
 itable result of the combining in the New Jersey cor- 
 poration by the increase of its stock and the transfer 
 to it of the stocks of so many other corporations, 
 aggregating so vast a capital, gave rise, in and of itself, 
 in the absence of countervailing circumstances, to say 
 the least, to the prima facie presumption of intent and 
 purpose to maintain the dominancy over the oil 
 industry, not as a result of normal methods of indus- 
 trial development, but by new means of combination 
 which were resorted to in order that greater power 
 might be added than would otherwise have arisen had 
 
n8 The Changing Order 
 
 normal methods been followed; the whole with the 
 purpose of excluding others from the trade and thus 
 centralizing in the combination a perpetual control 
 of the movements of petroleum and its products in 
 the channels of interstate commerce. 
 
 2. Because this prima facie presumption was 
 made conclusive by considering the conduct of the 
 persons and corporations who were mainly instru- 
 mental in bringing about the acquisition by the New 
 Jersey corporation of the stocks of the large number 
 of corporations which it acquired, as well as the 
 modes in which the power vested in the New Jersey 
 corporation had been exerted and the results which 
 had arisen from it. 
 
 The acts of the defendants preceding the trans- 
 fers to the New Jersey company of the shares of 
 stock of a large number of other corporations were 
 held by the court to evidence 
 
 an intent and purpose to exclude others which was 
 frequently manifested by acts and dealings wholly 
 inconsistent with the theory that they were made with 
 the single conception of advancing the development of 
 business power by usual methods, but which on the 
 contrary necessarily involved the intent to drive 
 others from the field and to exclude them from their 
 right to trade and thus accomplish the mastery which 
 was the end in view. 
 
 Confirmation of the finding of a continuous 
 intent in the defendants to exclude others from the 
 field and themselves to dominate it, was found in 
 
Recent Interpretation of Sherman Act 119 
 
 an examination of the exercise of its power by the 
 combination after it was formed. 
 
 . . . The acquisition here and there which en- 
 sued of every efficient means by which competition 
 could have been asserted, the slow but resistless 
 methods which followed by which means of transpor- 
 tation were absorbed and brought under control, the 
 system of marketing which was adopted by which the 
 country was divided into districts and trade in each 
 district in oil was turned over to a designated corpo- 
 ration within the combination and all others were 
 excluded, all lead the mind up to a conviction of a 
 purpose and intent which we think is so certain as 
 practically to cause the subject not to be within the 
 domain of reasonable contention. 
 
 Briefly, therefore, the decision of the Court was 
 put upon the ground that the defendant, by vest- 
 ing in a New Jersey corporation the stocks of a 
 large number of other corporations engaged in 
 various branches of the production, refining, 
 transportation, and marketing of petroleum and 
 its products, which but for such control would or 
 might have been engaged in competition with each 
 other in interstate and foreign commerce in those 
 commodities, had acquired the control of that 
 commerce; and that such control was acquired and 
 had been and was exercised with the intent and 
 purpose of maintaining it — not as a result of 
 normal methods of business, but by new means of 
 combination, resorted to in order to secure greater 
 power than would have been acquired by normal 
 
120 The Changing Order 
 
 methods, and of driving out and excluding, so far 
 as possible, all competitors in the business, thus 
 centralizing in the combination a perpetual con- 
 trol of the movements of petroleum and its pro- 
 ducts in the channels of interstate commerce. 
 
 It was not alone the acquisition of a large share 
 of commerce among the States and with foreign 
 countries, upon which the Court predicated the 
 conclusion of unlawful combination and monopoli- 
 zation; but the attainment of dominion over a 
 substantial part of that commerce by means of 
 intercorporate stock holdings in actually or po- 
 tentially competing corporations, accompanied by 
 the exclusion of competitors, and attended with 
 continued acts evidencing an intent and purpose 
 to retain controlling power over the business, and 
 to exclude and suppress all competition with it. 
 
 In reaching the conclusions stated, the Chief 
 Justice reviewed the history of the English law on 
 the subject of monopolies and restraints of trade, 
 and held that the Sherman Act "was drawn in the 
 light of the existing practical conception of the 
 law of restraint of trade, " and that 
 
 in view of the many new forms of contracts and com- 
 binations which were being evolved from existing 
 economic conditions, it was deemed essential by an 
 all-embracing enumeration to make sure that no form 
 of contract or combination by which an undue re- 
 straint of interstate or foreign commerce was brought 
 about could save such restraint from condemnation. 
 The statute, under this view, evidenced the intent not 
 
Recent Interpretation of Sherman Act 121 
 
 to restrain the right to make and enforce contracts, 
 whether resulting from combination or otherwise, 
 which did not unduly restrain interstate or foreign 
 commerce, but to protect that commerce from being 
 restrained by methods, whether old or new, which 
 would constitute an interference that is an undue 
 restraint. 
 
 The Chief Justice further said that as the act 
 had not defined contracts in restraint of trade, the 
 standard of reason which had been applied at the 
 common law and in this country in dealing with 
 subjects of the character embraced in the statute, 
 was intended to be the measure used for determin- 
 ing whether in a given case a particular act had or 
 had not brought about the wrong against which 
 the statute provided. He rejected the idea that 
 the use of the words "every contract, etc., in 
 restraint of trade" in the statute, leaves no room 
 for the exercise of judgment, but simply imposes 
 the plain duty of applying its "prohibitions to 
 every case within its literal language." This, 
 he said, would be to make the statute "destructive 
 of all right to contract or agree or combine in any 
 respect whatever, as to subjects embraced in 
 interstate trade or commerce." He cited the 
 language of Justice Peckham in writing the opinion 
 of the court in Hopkins v. United States. ■ 
 
 To treat as condemned by the act all agreements 
 under which, as a result, the cost of conducting an 
 
 " 171 U. S., 578, 592. 
 
122 The Changing Order 
 
 interstate commercial business may be increased would 
 enlarge the application of the act far beyond the fair 
 meaning of the language used. There must be some 
 direct and immediate effect upon interstate commerce 
 in order to come within the act. 
 
 And he observed: 
 
 If the criterion by which it is to be determined in 
 all cases whether every contract, combination, etc., 
 is a restraint of trade within the intendment of the 
 law, is the direct or indirect effect of the acts involved, 
 then of course the rule of reason becomes the guide 
 
 A consideration of the text of the second section, 
 he said, serves to establish that it was intended to 
 supplement the first, and to make sure that by no 
 possible guise could the public policy embodied 
 in the first section be frustrated or evaded. 
 
 In other words, having by the first section forbidden 
 all means of monopolizing trade — that is, unduly re- 
 straining it by means of every contract, combination, 
 etc., the second section seeks, if possible, to make the 
 prohibition of the act all the more complete and per- 
 fect by embracing all attempts to reach the end pro- 
 hibited by the first section — that is, restraints of trade, 
 by any attempt to monopolize, or monopolization 
 thereof, even although the acts by which such results 
 are attempted to be brought about or are brought 
 about are not embraced within the enumeration of the 
 first section. 1 
 
 1 Hopkins v. U. S., 171 U. S., 578, 592. 
 
Recent Interpretation of Sherman Act 123 
 
 Mr. Justice Harlan, in a separate opinion, while 
 concurring in the main with the decision of the 
 Court, interpreted the majority opinion as amount- 
 ing to a reading into the statute of the word "un- 
 reasonable" before the words "restraint of trade, " 
 and vigorously protested that such interpretation 
 was in substance the reversing of the previous 
 deliberate judgments of the Court to the effect 
 "that the act interpreting its words in their or- 
 dinary acceptation, prohibits all restraints of 
 interstate commerce by combinations in whatever 
 form, and whether reasonable or unreasonable." 
 
 Two weeks after the decision in the Standard Oil 
 case, the Court rendered its decision in the case 
 against the Tobacco combination. In his opinion, 
 which was concurred in by all the associate justices 
 but Harlan, the Chief Justice interpreted the 
 opinion in the former case and answered the criti- 
 cisms of Mr. Justice Harlan and those who had 
 expressed views similar to his as to the meaning of 
 the Standard Oil decision. 
 
 In that case [said the Chief Justice], it was held, 
 without departing from any previous decision of the 
 Court, that as the statute had not defined the words 
 "restraint of trade" it became necessary to construe 
 those words, a duty which could be discharged only 
 by a resort to reason. 
 
 He quoted the language of Justice Peckham in 
 the Joint Traffic case. x 
 
 " 171 U. S., 568. 
 
124 The Changing Order 
 
 The act of Congress must have a reasonable con- 
 struction, or else there would scarcely be an agreement 
 or contract among business men that could not be 
 said to have, indirectly or remotely, some bearing 
 upon interstate commerce, and possibly to restrain it. 
 
 "Applying/' said the Chief Justice, 
 
 the rule of reason to the construction of the statute, it 
 was held in the Standard Oil case that as the words 
 restraint of trade at common law and in the law of this 
 country at the time of the adoption of the Anti-trust 
 Act only embraced acts or contracts or agreements 
 or combinations which operated to the prejudice of 
 the public interests by unduly restricting competition 
 or unduly obstructing the due course of trade, or which, 
 either because of their inherent nature or effect, or 
 because of the evident purpose of the acts, etc., 
 injuriously restrained trade, that the words as used in 
 the statute were designed to have and did have but a 
 like significance. It was therefore pointed out that 
 the statute did not forbid or restrain the power to 
 make normal and usual contracts to further trade by 
 resorting to all normal methods, whether by agree- 
 ment or otherwise, to accomplish such purpose. In 
 other words, it was held, not that acts which the statute 
 prohibited could be removed from the control of its 
 prohibitions by a finding that they were unreasonable, 
 but that the duty to interpret, which inevitably arose 
 from the general character of the term restraint of 
 trade, required that the words restraint of trade should 
 be given a meaning which would not destroy the 
 individual right to contract and render difficult if not 
 impossible any movement of trade in the channels of 
 
Recent Interpretation of Sherman Act 125 
 
 interstate commerce — the free movement of which it 
 was the purpose of the statute to protect. 1 
 
 The facts presented in the Tobacco case were 
 more intricate and involved than those in the 
 Standard Oil case. Not only was the American 
 Tobacco Company the holder of stocks in other 
 companies, but it was itself a consolidated com- 
 pany formed by the merger, under the laws of 
 New Jersey, of three pre-existing companies. The 
 combination of many previously competing com- 
 panies, was created, first by the transfer of shares 
 of stock from one to the other, afterwards cemented 
 by absolute conveyances of land, plants, and other 
 property and business. The nucleus of the com- 
 bination was the original American Tobacco 
 Company, organized in January, 1890, and to 
 which were at once conveyed by deed and transfer 
 the plants and business of five different concerns, 
 competitors in the purchase of the raw product 
 which they manufactured, and in the distribution 
 and sale of the manufactured products. The 
 result of this combination was to give to the new 
 company immediately on its organization a prac- 
 tical monopoly of the cigarette business of the 
 United States, and that accomplishment colored 
 all subsequent proceedings in the widening sweep 
 of the combination, the progress of which was 
 noted by the Supreme Court as being attended 
 with the constant acquisition of competing con- 
 
 1 U. S. v. American Tobacco Co., et al. 
 
126 The Changing Order 
 
 cerns, buttressed by covenants on the part of all 
 their officers and principal stockholders not to 
 engage in business in competition with the pur- 
 chaser ; and in the acquisition of many competitors, 
 not for the purpose of continuing their operation, 
 but of closing them down and putting them 
 permanently out of business. A summary of the 
 salient facts dwelt on by the Court as the basis for 
 its decision was made in this language : 
 
 Thus, it is beyond dispute: First, that since the 
 organization of the new American Tobacco Company 
 that company has acquired four large tobacco concerns, 
 that restrictive covenants against engaging in the 
 tobacco business were taken from the sellers, and that 
 the plants were not continued in operation but were at 
 once abandoned. Second, that the new company 
 has besides acquired control of eight additional 
 concerns, the business of such concerns being now 
 carried on by four separate corporations, all absolutely 
 controlled by the American Tobacco Company, 
 although the connection as to two of these companies 
 with that corporation was long and persistently denied. 
 
 Thus reaching the end of the second period and 
 coming to the time of the bringing of the suit, brevity 
 prevents us from stopping to portray the difference 
 between the condition in 1890 when the (old) Ameri- 
 can Tobacco Company was organized by the con- 
 solidation of five competing cigarette concerns and 
 that which existed at the commencement of the suit. 
 That situation and the vast power which the principal 
 and accessory corporate defendants and the small 
 number of individuals who own a majority of the 
 
Recent Interpretation of Sherman Act 127 
 
 common stock of the new American Tobacco Company 
 exert over the marketing of tobacco as a raw product, 
 its manufacture, its marketing when manufactured, 
 and its consequent movement in the channels of 
 interstate commerce, indeed, relatively, over foreign 
 commerce, and the commerce of the whole world, 
 in the raw and manufactured products, stand out in 
 such bold relief from the undisputed facts which 
 have been stated. . . . z 
 
 These undisputed facts, the Court said, in- 
 volved questions as to the operation of the anti- 
 trust law not theretofore presented in any case. 
 They clearly demonstrated that the acts, con- 
 tracts, agreements, combinations, etc., which were 
 assailed were of such an unusual and wrongful 
 character as to bring them within the prohibitions 
 of the law. 
 
 Indeed [said the Chief Justice] the history of the 
 combination is so replete with the doing of acts which 
 it was the obvious purpose of the statute to forbid, 
 so demonstrative of the existence from the beginning 
 of a purpose to acquire dominion and control of the 
 tobacco trade, not by the mere exertion of the ordinary 
 right to contract and to trade, but by methods devised 
 in order to monopolize the trade by driving competi- 
 tors out of business, which were ruthlessly carried 
 out upon the assumption that to work upon the fears 
 or play upon the cupidity of competitors would make 
 success possible. 2 
 
 * U. S. t>. American Tobacco Co., et al. * Ibid. 
 
128 The Changing Order 
 
 These conclusions were stated to be inevitable, 
 not because of the vast amount of property aggre- 
 gated by the combination, not because alone of the 
 many corporations which the proof showed were 
 united by resort to one device or another, not alone 
 because of the dominion and control over the 
 tobacco trade which actually existed, but because 
 the Court was of opinion that the conclusion of 
 wrongful purpose and illegal combination was 
 overwhelmingly established by the following con- 
 siderations: 
 
 1. The fact that the first organization or com- 
 bination was impelled by a previously existing 
 fierce trade war, evidently inspired by one or more 
 of the minds which brought about and became 
 parties to the combination. 
 
 2. Because, immediately after that combina- 
 tion, the acts which ensued justified the inference 
 that the intention existed to use the power of 
 the combination as a vantage ground to further 
 monopolize the trade in tobacco by means of trade 
 conflicts designed to injure, either by driving com- 
 petitors out of the business or compelling them to 
 become parties to the combination. 
 
 3. By the ever-present manifestation of a 
 conscious wrong-doing by the form in which the 
 various transactions were embodied from the 
 beginning — now the organization of a new com- 
 pany, now the control exerted through taking up 
 stock in one or another or in several, so as to 
 obscure the result actually attained, evidencing 
 
Recent Interpretation of Sherman Act 129 
 
 a constant purpose to restrain others and to 
 monopolize and retain power in the hands of the 
 few who, from the beginning, contemplated the 
 mastery of the trade which followed. 
 
 4. By the absorption of control of all the ele- 
 ments essential to the manufacture of tobacco and 
 its products, and placing such control in the hands 
 of seemingly independent corporations serving as 
 perpetual barriers against others in the trade. 
 
 5. By persistent expenditure of large sums in 
 buying out plants, not to utilize but to close 
 up, rendering them useless for the purposes of 
 trade. 
 
 6. By the constantly recurring stipulations 
 exacted from manufacturers, stockholders, or 
 employees, binding themselves generally for long 
 periods not to compete in the future. 
 
 From all of these acts, the Court deduced the 
 conclusion that the defendants had been engaged 
 in a largely successful effort, extending over a 
 period of years, to monopolize (that is, wrongfully 
 to acquire to themselves) the dominion over the 
 manufacture and marketing of tobacco and its 
 products and accessories, not by normal methods 
 of business, but by unfair and subtle methods of 
 combination, resorted to in order to secure greater 
 power than they could have acquired by normal 
 methods of business, and with the intention of 
 driving out and excluding so far as possible all 
 other competitors, and centralizing in the com- 
 bination a perpetual control of the movements of 
 
130 The Changing Order 
 
 tobacco and its products and accessories in the 
 channels of interstate and foreign commerce. 
 
 The remedy to be applied in the Standard Oil 
 case was comparatively simple and obvious, and 
 the decree of the Circuit Court which, with slight 
 modifications, was affirmed by the Supreme Court, 
 to use the language of that court, 
 
 commanded the dissolution of the combination, and 
 therefore, in effect, directed the transfer by the New 
 Jersey corporation back to the stockholders of the 
 various subsidiary corporations entitled to the same, 
 of the stock which had been turned over to the New 
 Jersey corporation in exchange for its stock, and en- 
 joined the stockholders of the corporations after the 
 dissolution of the combination from, by any device 
 whatever, recreating directly or indirectly the illegal 
 combination which the decree dissolved. 
 
 A far more intricate problem was presented in 
 the Tobacco case, as was frankly recognized by the 
 Court. Conveyances, consolidations, and mergers, 
 and the dissolution of previously existing cor- 
 porations whose stocks and properties had been 
 acquired, had so blended the whole combination 
 into new form, as to make it impossible to effect a 
 dissolution by the simple method applicable to 
 the Standard Oil case, and therefore the Supreme 
 Court said that, in determining the relief proper 
 to be given, it might not model its action upon that 
 granted by the Court below, but in order to award 
 relief coterminous with the ultimate redress of the 
 
Recent Interpretation of Sherman Act 131 
 
 wrongs which the Court found to exist, it must 
 approach the subject of relief from an original 
 point of view. In considering the subject from 
 that aspect, the Court said that three dominant 
 influences must guide its action: 
 
 (1) The duty of giving complete and efficacious 
 effect to the prohibitions of the statute; (2) the accom- 
 plishment of this result with as little injury as possible 
 to the interest of the general public; and (3) a proper 
 regard for the vast interests of private property which 
 may have become vested in many persons . . . 
 without any guilty knowledge or intent in any way 
 to become actors or participants in the wrongs which 
 we find to have inspired and dominated the combina- 
 tion from the beginning. 
 
 For the purpose of meeting that situation, the 
 Court declared that it might at once resort to one 
 or the other of two general remedies : 
 
 (a) The allowance of a permanent injunction re- 
 straining the combination as a universality and the in- 
 dividuals and corporations which form a part of or 
 co-operate in it in any manner or form from continuing 
 to engage in interstate commerce until the illegal 
 situation be cured . . . ; or (b) to direct the appoint- 
 ment of a receiver to take charge of the assets and 
 property in this country of the combination in all its 
 ramifications for the purpose of preventing a continued 
 violation of the law, and thus working out by a sale 
 of the property of the combination or otherwise, a 
 condition of things which would not be repugnant to 
 the prohibitions of the act, 
 
132 The Changing Order 
 
 The Court, however, in consideration of the 
 public interests and that of innocent participants, 
 determined to send the case back to the Circuit 
 Court, with directions to endeavor to ascertain and 
 determine upon some plan or method of dissolving 
 the combination and working out a lawful con- 
 dition of things, if that could be done within a 
 period of six months, with a possible extension of 
 two months longer; but that in the event that 
 such condition of disintegration in conformity with 
 the law should not be brought about within that 
 time, it should be the duty of the Circuit Court, 
 
 either by way of an injunction restraining the move- 
 ment of the products of the combination in the chan- 
 nels of interstate or foreign commerce, or by the 
 appointment of a receiver, to give effect to the require- 
 ments of the statute. 
 
 Probably no more drastic decree has ever been 
 entered by the Supreme Court than this. The 
 Court remits to the Circuit Court the execution of 
 a decree of dissolution of a combination of sixty- 
 seven corporations and twenty-nine individuals, 
 with assets amounting to upwards of $400,000,000 
 book value, and net earnings exceeding $36,000,000 
 per annum; which had acquired 77 per cent, of the 
 entire business of the United States in manufac- 
 tured tobacco, plug and smoking tobacco; 96 per 
 cent, of snuff ; 77 per cent, of cigarettes; 91 per cent, 
 of little cigars ; and 14 per cent, of cigars and stogies ; 
 and which has acquired probably the most exten- 
 
Recent Interpretation of Sherman Act 133 
 
 sive monopoly of interstate and foreign commerce 
 ever created in the world. This combination was 
 ordered to be resolved into, not necessarily its 
 original elements, but, in effect, to be divided up 
 into a number of separate and distinct integers, no 
 one of which should threaten monopoly, and which 
 should not either by reason of their organization 
 and business, or in their relation to each other, 
 constitute combinations in restraint of interstate 
 or foreign commerce. The Supreme Court not 
 only empowered, but directed the Circuit Court, in 
 case this lawful condition should not be brought 
 about within a period of six or eight months, 
 to either appoint a receiver of this vast property 
 for the purpose of, by sale or otherwise, working 
 out the ordered disintegration; or by injunction 
 to paralyze and end its conduct of interstate busi- 
 ness. Those who have thoughtlessly yielded to 
 the superficial conclusion resulting from the appli- 
 cation by the Chief Justice of the rule of reason to 
 the interpretation of the Sherman Law, can find but 
 little to justify the idea that the Sherman Law has 
 been rendered ineffective by those two decisions, 
 for precisely the contrary is clearly established by 
 these great judgments. The most cursory exami- 
 nation of the decree in the Tobacco case, — the 
 most casual consideration of the drastic and far- 
 reaching remedy imposed, makes it perfectly 
 apparent that the Sherman Law, perhaps for the 
 first time, has been demonstrated to be an actual, 
 effective weapon to the accomplishment of the 
 
134 The Changing Order 
 
 purpose for which it was primarily enacted, namely, 
 the destruction of the great combinations famil- 
 iarly known as "trusts." 
 
 The main reliance of the defendants in both the 
 Standard Oil and the Tobacco cases was the de- 
 cision in United States v. Knight * to the effect that 
 the acquisition of a number of manufacturing 
 plants in one State by a corporation of another 
 State was not within the intent of the Sherman 
 law, even though the purchaser thereby acquired 
 upward of 90 per cent, of all the refineries of sugar 
 in the United States, because manufacture alone 
 and not commerce, was involved. The Knight 
 case had been distinguished in subsequent cases 
 as not involving any questions of interstate com- 
 merce. In the Standard Oil case the Court dis- 
 missed it with scant consideration, saying: 
 
 The view, however, which the argument takes of 
 that case and the arguments based upon that view 
 have been so repeatedly pressed upon this Court in 
 connection with the interpretation and enforcement 
 of the Anti-trust Act, and have been so necessarily 
 and expressly decided to be unsound as to cause the 
 contentions to be plainly foreclosed and to require no 
 express notice. 2 
 
 1 156 U. S., 1. 
 
 2 The Court cited as illustrative of this point the cases of United 
 States v. Northern Securities Co., 3 Loewe v. La wler, * United States 
 v. Swift & Co., s Montague v. Lowry, 6 Shawnee Compress Co. 
 v. Anderson. 7 
 
 3 193 U. S., 334- 4 2 o8U. S., 274. s 196 U. S., 375 
 
 6 193 U. S., 38. 1 209 U. S., 423. 
 
Recent Interpretation of Sherman Act 135 
 
 But the decision in the case of West, Attorney- 
 General, v. Kansas Natural Gas Company, ren- 
 dered May 15, 191 1, goes further in overthrowing 
 the doctrine of the Knight case than any of those 
 cited by the Chief Justice in the Standard Oil case, 
 or than the obvious disregard of its authority in the 
 latter case. In the Knight case, the facts presented 
 in the evidence were taken by the Court as involving 
 merely the acquisition by one corporation of manu- 
 factories wholly within the State, and it was held 
 that such acquisition was not within the power of 
 the Congress of the United States to regulate com- 
 merce among the States and with foreign countries. 
 
 Doubtless [said Chief Justice Fuller] the power to 
 control the manufacture of a given thing involves in a 
 certain sense the control of its disposition, but this is 
 a secondary and not a primary sense. . . . Com- 
 merce succeeds to manufacture and is not a part of 
 it. . . . The regulation of commerce applies 
 to the subject of commerce and not to matters of 
 internal police. Contracts to buy, sell, or exchange 
 goods to be transported among the several States, the 
 transportation and its instrumentalities and articles 
 bought, sold, or exchanged for the purpose of such 
 transit among the States, or put in the way of transit, 
 may be regulated, but this is because they form part of 
 interstate trade or commerce. The fact that an article 
 is manufactured for export to another State does not 
 of itself make it an article of interstate commerce, 
 and the intent of the manufacturer does not determine 
 the time when the article or product passes from the 
 control of the State and belongs to commerce. 
 
136 The Changing Order 
 
 The cases of Coe v. Enrol 1 and Kidd v. Pearson 2 
 were cited in support of the proposition that func- 
 tions of manufacture and commerce were different, 
 that to hold otherwise would be to invest Congress, 
 "to the exclusion of States, with the power to 
 regulate, not only manufactures, but also agricul- 
 ture, horticulture, stock raising, domestic fisheries, 
 mining — in short, every branch of human industry.' ' 
 That contracts, combinations, or conspiracies to 
 control domestic enterprises in manufactures, agri- 
 culture, mining, production in all its forms, or to 
 raise or lower prices or wages, might unquestion- 
 ably tend to restrain external as well as domestic 
 trade, the Court conceded; but it said that such 
 restraint would be an indirect result, however 
 inevitable and whatever its extent, and such result 
 would not necessarily determine the object of the 
 contract, combination, or conspiracy. So it was 
 held in Kidd v. Pearson that the refusal of a State 
 to allow articles to be manufactured within her 
 borders, even for export, did not directly affect 
 external commerce and did not trench upon the 
 Congressional control over interstate commerce. 
 
 In the West case, the Supreme Court reviewed 
 decisions of the U. S. Circuit Court in suits having 
 for their common purpose an attack upon the 
 constitutional validity of a statute of Oklahoma, 
 framed for the purpose of prohibiting the trans- 
 portation or transmission of natural gas from points 
 within that State to points in other States. This 
 
 1116U. S., 517. »I28U. S., 1. 
 
Recent Interpretation of Sherman Act 137 
 
 prohibition was sought to be accomplished by var- 
 ious provisions in the statute under review. The 
 statute was held to be prohibitive of interstate 
 commerce in natural gas, and, consequently, a 
 violation of the commerce clause of the Constitu- 
 tion of the United States. Mr. Justice McKenna, 
 writing the opinion of the Court, said that the 
 act presented no embarrassing questions of inter- 
 pretation: 
 
 It was manifestly enacted in the confident belief that 
 the State has the power to confine commerce in natural 
 gas between points within the State .... And the 
 State having such power, it is contended, if its exercise 
 affects interstate commerce it affects such commerce 
 only incidentally — in other words, affects it only, as 
 it is contended, by the exertion of lawful rights 
 and only because it cannot acquire the means for its 
 exercise. 
 
 The results of the contention, the Court held, 
 repel its acceptance. 
 
 Gas, when reduced to possession, is a commodity; 
 it belongs to the owner of the land, and, when reduced 
 to possession, is his individual property subject to sale 
 by him, and may be a subject of intrastate commerce 
 and interstate commerce. The statute of Oklahoma 
 recognizes it to be a subject of intrastate commerce, 
 but seeks to prohibit it from being the subject of 
 interstate commerce, and this is the purpose of its 
 conservation. In other words, the purpose of its 
 conservation is in a sense commercial — the business 
 
138 The Changing Order 
 
 welfare of the State, as coal might be, or timber. Both 
 of those products may be limited in amount, and the 
 same consideration of the public welfare which would 
 confine gas to the use of the inhabitants of a State 
 would confine them to the inhabitants of the State. 
 If the States have such power a singular situation might 
 result. Pennsylvania might keep its coal, the North- 
 west its timber, the mining States their minerals. 
 And why may not the products of the field be brought 
 within the principle? Thus enlarged, or without that 
 enlargement, its influence on interstate commerce need 
 not be pointed out. To what consequences does such 
 power tend? If one State has it, all States have it; 
 embargo may be retaliated by embargo, and commerce 
 will be halted at State lines. And yet we have said 
 that "in matters of foreign and interstate commerce 
 there are no State lines. " In such commerce, instead 
 of the States, a new power appears and a new welfare, 
 a welfare which transcends that of any State. But 
 rather let us say it is constituted of the welfare of all 
 of the States and that of each State is made the 
 greater by a division of its resources, natural and 
 created, with every other State, and those of every 
 other State with it. This was the purpose, as it is the 
 result, of the interstate commerce clause of the Con- 
 stitution of the United States. If there is to be a 
 turning backward it must be done by the authority 
 of another instrumentality than a court. ... At 
 this late day it is not necessary to cite cases to 
 show that the right to engage in interstate commerce 
 is not the gift of a State, and that it cannot be regu- 
 lated or restrained by a State, or that a State cannot 
 exclude from its limits a corporation engaged in such 
 commerce. 
 
Recent Interpretation of Sherman Act 139 
 
 If, therefore, the State cannot control the trans- 
 mission of natural gas produced within its borders 
 to other States, because to concede that control 
 would be in effect to empower it to cut off at its 
 source all of the objects of interstate commerce, 
 how can it retain the right to prohibit the manu- 
 facture within its limits of commodities intended 
 to be shipped in interstate commerce? Com- 
 modities when so manufactured are precisely like 
 natural gas reduced to the possession of the owner — 
 that is, a commodity which belongs to him as his 
 individual property, is subject to sale by him, and 
 may be the subject of interstate and intrastate 
 commerce. It is true the statute did not deal 
 with the production of the gas, and to that extent, 
 possibly, it is not in conflict with Kidd v. Pearson 
 and Coe v. Errol. Yet if the constitutional right 
 of Congress to regulate interstate commerce 
 attaches to the commodity the moment it is in 
 existence in the hands of the owner, so that the 
 State may not prohibit its shipment in interstate 
 commerce, does it not apply as well from that 
 moment to prevent the owner from himself, by 
 combination or agreement, imposing an undue 
 restraint upon its shipment in such commerce. 
 What the State is prohibited from doing, the 
 citizen may not do, and the Sherman Act attaches 
 from the moment the commodity comes into 
 existence to prevent any impediment being laid 
 upon its possible passage into the ordinary and 
 usual currents of commerce among the States. 
 
140 The Changing Order 
 
 Summing up the results of these late decisions, 
 therefore, it will be seen that the area of uncer- 
 tainty in the law has been greatly narrowed, and 
 that its scope and effect have been pretty clearly 
 defined; the school of literal interpretation has 
 been repudiated, and the application of a rule of 
 reasonable construction declared. There will be 
 always, of course, a field of uncertainty in so far 
 as an investigation of facts — particularly when 
 intent becomes a necessary consideration — is 
 required. But this much may surely be said to 
 be now beyond controversy : 
 
 That ordinary agreements of purchase and sale, of 
 partnership, or of corporate organization, do not vio- 
 late the first section of the Sherman Act , even though 
 incidentally and to a limited degree they may oper- 
 ate to restrain competition in interstate or foreign 
 commerce between the parties to such agreements. 
 
 But any contract, combination, or association, 
 the direct object and effect of which is to control 
 prices, restrict output, divide territory, refrain 
 from competition or exclude or prevent others from 
 competing in any particular field of enterprise, 
 imposes an undue restraint upon trade and com- 
 merce and is in violation of the first section of the 
 act. This principle applies to all associations of 
 competitors of the character usually known as 
 pools; to agreements with so-called wholesale or 
 retail agents, whereby the manufacturer of an 
 article, even though made according to some secret 
 process or formula, seeks to control the price at 
 
Recent Interpretation of Sherman Act 141 
 
 which it may be sold by purchasers directly or 
 indirectly from the manufacturer. It applies also 
 to attempts to control competition between in- 
 dependent concerns by means of a stock-holding 
 trust, whether individual or corporation holder. 
 
 Size alone does not constitute monopoly. The 
 attainment of a dominant position in a business, 
 acquired as the result of honest enterprise and 
 normal methods of business development, is not a 
 violation of the law. But unfair methods of trade, 
 by destroying and excluding competitors by means 
 of intercorporate stockholdings, or by means 
 of agreements between actual or potential com- 
 petitors, whereby the control of commerce among 
 the States or with foreign countries in any par- 
 ticular line of industry is secured or threatened, 
 expose those who are concerned in such efforts to 
 the penalties prescribed in the second section of 
 the act, because they are engaged in monopolizing 
 or attempting to monopolize such commerce. 
 
 It is also now settled that no form of corporate 
 organization, merger, or consolidation — no species 
 of transfer of title, whether by sale, conveyance, or 
 mortgage; and no lapse of time from the date of 
 the original contract, conspiracy, or combination, 
 can bar a Federal Court of equity from terminat- 
 ing an unlawful restraint, or compelling the dis- 
 integration of a monopolistic combination. The 
 maxim nullum tempus occur rit regi is applicable to 
 any continuing combination or conspiracy which 
 the Anti-Trust Act of 1890 condemns. 
 
142 The Changing Order 
 
 Speaking of the conscious development of insti- 
 tutions in America, Woodrow Wilson in his work 
 on "The State," writes: 
 
 It is one of the distinguishing characteristics of the 
 English race, whose political habit has been trans- 
 mitted to us through the sagacious generation by whom 
 this government was erected, that they have never 
 felt themselves bound by the logic of laws, but only by 
 a practical understanding of them based upon slow 
 precedent. For this race, the law under which they 
 live is at any particular time what it is then understood 
 to be, and this understanding of it is compounded 
 of the circumstances of the time. Absolute theories 
 of legal consequence they have never cared to follow 
 out to their conclusions. Their laws have always 
 been used as parts of the practical running machinery 
 of their politics — parts to be fitted from time to 
 time, by interpretation, to existing opinion and social 
 condition. 
 
 If this law, designed to protect the people of this 
 country from the evils of monopoly, and to pre- 
 serve the liberty of the individual to trade freely, 
 shall now be clearly understood ; if its true purpose 
 shall be recognized and its beneficent consequences 
 realized; the twenty years of slowly developed 
 interpretation and widening precedent will not 
 have been without great value. For the law will 
 henceforth be used, to employ Dr. Wilson's 
 language, as a part of the running machinery of 
 our political system, adapted to the needs of our 
 social condition. 
 
IX 
 
 FURTHER REGULATION OF INTER- 
 STATE COMMERCE 1 
 
 ONE of the most important questions — perhaps 
 the most important — before the country to-day- 
 is that of the proper relation of the national govern- 
 ment to corporations engaged in carrying on com- 
 merce among the States and with foreign countries. 
 The Sherman Anti-Trust Law was held applicable 
 to railroad companies in 1897, but the Interstate 
 Commerce Law of 1887, and the various amend- 
 ments to it, particularly the Elkins Law of 1903, the 
 Hepburn Act of 1906, and the Mann-Elkins Law 
 of 1 9 10, have dealt so comprehensively and effec- 
 tively with common carriers by railroad, express, 
 pipe line, telegraph, telephone, and to a certain 
 extent by water, that but few civil suits have been 
 brought against such carriers under the Sherman 
 Act, and — so far as I am aware — no criminal 
 indictments have been found for violation of its 
 provisions by railroad companies or other carriers. 
 The gradual interpretation of the Act of July 2, 
 
 1 Address before Minnesota State Bar Association, Duluth, 
 Minn., July 19, 191 1. 
 
 143 
 
144 The Changing Order 
 
 1890, resulting in the decisions and decrees ren- 
 dered by the Supreme Court at its last term, has at 
 last clearly demonstrated the effectiveness of that 
 law to destroy existing combinations in restraint 
 of interstate or international commerce, and 
 attempts to monopolize any part of it, and to 
 prevent renewed combination or monopolistic 
 effort. 
 
 The first practical application of the "rule of 
 reason," to combinations in violation of the anti- 
 trust law, made since the Supreme Court decisions 
 in the Standard Oil and Tobacco cases, was that 
 of the United States Circuit Court for the Third 
 Judicial Circuit, in the Government's suit against 
 the so-called Powder Trust. 1 Certainly, no per- 
 son interested in the maintenance of any monopoly 
 or other restraints of interstate commerce can 
 derive comfort from the stern demonstration of 
 unlawful combination contained in the Court's 
 opinion in that case, or the impending doom 
 foreshadowed in its decree. 
 
 The recent decisions of the Supreme Court in 
 Standard Oil Co. v. United States, and American 
 Tobacco Co. v. United States [says Judge Lanning 
 in rendering the opinion of the Court] make it quite 
 clear that the language of the anti-trust act is not to 
 receive that literal construction which will impair 
 rather than enhance freedom of interstate commerce. 
 As we read those decisions, restraint of interstate trade 
 
 1 United States v. E. I. du Pont de Nemours & Co., et a/., 
 decided June 21, 191 1, U. S. Cir. Ct., Dist. of Delaware. 
 
Regulation of Interstate Commerce 145 
 
 and restraint of competition in interstate trade are not 
 interchangeable expressions. There may be, under the 
 anti-trust act, restraint of competition that does not 
 amount to restraint of interstate trade, just as before 
 the passage of the act there might have been restraint 
 of competition that did not amount to a common law 
 restraint of trade. . . . 
 
 While all this is true, the recent decisions of the 
 Supreme Court make it equally clear that a combina- 
 tion cannot escape the condemnation of the anti-trust 
 act merely by the form it assumes or by the dress it 
 wears. It matters not whether the combination be 
 "in the form of a trust or otherwise," whether it be in 
 the form of a trade association or a corporation, if it 
 arbitrarily uses its power to force weaker competitors 
 out of business or to coerce them into a sale to or 
 union with the combination, it puts a restraint upon 
 interstate commerce and monopolizes or attempts to 
 monopolize a part of that commerce in a sense that 
 violates the anti-trust act. 
 
 In determining the form of decree to be entered, 
 the Circuit Court said that the relief which it 
 proposed to give was preventive and injunctive. 
 
 If our decree, limited to that purpose, shall neces- 
 sitate a discontinuance of present business methods, 
 it is only because those methods are illegal. The 
 incidental results of a sweeping injunction may be 
 serious to the parties immediately concerned, but, in 
 carrying out the command of the statute, which is as 
 obligatory upon this Court as it is upon the parties to 
 this suit, such results should not stay our hand ; they 
 should only challenge our care that our decree be no 
 
146 The Changing Order 
 
 more drastic than the facts of the case and the law 
 demand. . . . The present decree will therefore 
 be interlocutory. It will adjudge that the 28 de- 
 fendants are maintaining a combination in restraint 
 of interstate commerce in powder and other explosives 
 in violation of Section 1 of the anti-trust act, that they 
 have attempted to monopolize and have monopolized 
 a part of such commerce in violation of section 2 of 
 that act, that they shall be enjoined from continuing 
 said combination, and that the combination shall be 
 dissolved. . . . 
 
 The decree further provided that in order that 
 the Court might obtain such further information 
 as should enable it to frame a final decree which 
 should give effective force to its adjudication, a 
 hearing should be given the parties at the next term 
 4 'as to the nature of the injunction which shall be 
 granted herein and as to any plan for dissolving 
 said combination," the defendants being enjoined 
 in the meantime from doing any acts to further 
 extend or enlarge the field of operation or the 
 power of the unlawful combination. 
 
 Therefore, within such time as the ascertainment 
 of facts and the preparation of evidence necessary 
 to the initiation and conduct of appropriate pro- 
 ceedings by the Government may require, such of 
 the known monopolistic combinations in restraint 
 of interstate trade and commerce as shall not 
 voluntarily dissolve, will be brought before the 
 Courts for judgment, and the precedents fur- 
 nished by the Standard Oil, Tobacco, and Powder 
 
Regulation of Interstate Commerce 147 
 
 cases afford some assurance of the results which 
 may be anticipated. 
 
 But the question remains, can the great end and 
 object of the Sherman Law — namely, that the 
 normal course of trade and commerce among the 
 States shall not be impeded by undue restraints and 
 monopolies — be realized through the operation of 
 that law alone? 
 
 In dealing with transportation, Congress was 
 not content to rely simply on the process of injunc- 
 tion to restrain, and indictment to punish violations 
 of the anti-trust law. It also established an 
 administrative commission clothed with powers — 
 greatly enlarged from time to time — over those 
 engaged in the transportation business, which 
 Congress enacted should be carried on for a rea- 
 sonable compensation and without unjust discrim- 
 ination as between parties or localities similarly 
 situated. While Congress has not specifically 
 incorporated corporations to carry on such busi- 
 ness — save in a very few instances — nor directly 
 licensed them to engage in interstate transporta- 
 tion, nor expressly exempted them from State 
 interference, the Federal Courts have substantially 
 held that Congress, by regulating the rates and 
 practices of common carriers in interstate com- 
 merce, has prohibited State regulation which would 
 conflict with that of the nation. The decisions of 
 the Federal Courts on this subject have not been 
 always consistent, and in some instances State 
 legislation has been allowed effect, despite ap- 
 
148 The Changing Order 
 
 parent conflict with Federal regulation of the 
 same subject. But in the absence of direct 
 Congressional exclusion of state law, or an avowed 
 direct and exclusive license system, or system 
 of national incorporation, the Courts have very 
 properly considered the susceptibilities of the 
 States, and have upheld State legislation when- 
 ever it seemed to be not destructive of national 
 control over the essentials of interstate commerce. 
 
 A more frankly logical system would be, of course, 
 more satisfactory ; but Congress — in common with 
 other legislative bodies — is apt to shrink from taking 
 a clearly logical position in legislation which may 
 involve conflict with other sovereignties or quasi- 
 sovereignties, and to leave judicial interpretation 
 to add to statutory authority a power the legisla- 
 ture was desirous to confer, but feared to express. 
 
 There are many reasons why a similar attitude 
 may be expected when Congress comes to deal with 
 the difficult problem of regulating the conduct of 
 large commercial businesses among the States by 
 corporations. 
 
 The existing system, whereby every State 
 charters corporations without the slightest regard 
 to other States, or to the nation, empowered to 
 roam at will — so far as the creator is concerned — 
 but subject to any restriction or condition which 
 any other State into which they may desire to go 
 in carrying on their business, chooses to impose, 
 naturally led to a demand for authority in one 
 corporation to take and hold stock in another, in 
 
Regulation of Interstate Commerce 149 
 
 order that the business of a corporation organized 
 in one State might be carried on in another State, 
 without subjecting the parent company and its 
 entire capital and corporate organization to the 
 laws of the latter. Probably no one thing has done 
 more to facilitate restraint of trade and the growth 
 of monopoly than the departure from the early 
 rule of law that one corporation cannot own stock 
 in another. That departure was the most baneful 
 result of the laissez-faire policy in dealing with 
 corporations to which the country abandoned itself 
 during the last thirty years of the nineteenth 
 century. The conditions which have resulted 
 from the exercise of the expressly conferred power 
 in one corporation to take and hold stock in 
 another, present the most serious obstacles to 
 effectively dealing with the "trust" problem. 
 For few corporations, if any, solely by means of 
 the direct acquisition of property and the widen- 
 ing scope of their own business, have acquired such 
 control of the particular commerce among the 
 States with which they are concerned as to con- 
 stitute monopoly, or to threaten it. Whenever 
 competitors have been excluded by unfair means, 
 and a very large part of the commerce absorbed 
 by a particular interest, the machinery by which 
 such result has been accomplished will be found 
 on examination to be the control of various 
 corporations by means of intercorporate stock 
 holdings. 
 
 The cases of the Standard Oil, American To- 
 
150 The Changing Order 
 
 bacco, the Powder Company, the American Sugar 
 Refining Company, and others, furnish abundant 
 judicial demonstration of this fact. 
 
 In a large number of cases, it has been sought to 
 perpetuate the control secured by one corporation 
 through the acquisition of stocks of other corpora- 
 tions, by pledging such stocks as security for 
 issues of notes or bonds ; and enormous amounts of 
 securities have been sold to the public in faith of 
 such pledges. 
 
 If Congress should enact that no corporation 
 engaged, in interstate commerce shall hereafter 
 acquire any stock of any other corporation so 
 engaged, and that unless all such corporations 
 should dispose of all stocks held by them in other 
 corporations engaged in interstate commerce 
 within some specified period, they should be pro- 
 hibited from carrying on interstate commerce until 
 they did so dispose of such stocks, the axe would 
 indeed be laid at the root of the trust evil; but 
 justice to the innocent holders of securities issued 
 to the public based on pledged stocks, acquired and 
 held pursuant to express legal authority, would 
 require consideration to be given to their case, and 
 such exceptions to be made from the prohibitions 
 as might be necessary to their protection. These 
 necessary acts of justice might seriously interfere 
 with the enactment of legislation effective to the 
 accomplishment of the main purpose in view. 
 
 But such drastic legislation, while logical and 
 effective, is hardly to be expected, and the ques- 
 
Regulation of Interstate Commerce 151 
 
 tion will therefore remain: Within what limits 
 is legislation to regulate corporations engaged in 
 interstate commerce other than transportation 
 expedient and practicable? Should the analogy 
 of the Interstate Commerce Law and Commission 
 be followed? Is any regulatory legislation neces- 
 sary besides the Sherman Act and the statutes 
 prohibiting railroad rebates? 
 
 Conservative minds naturally shrink from ac- 
 cepting a conclusion which would devolve upon the 
 national government the comprehensive powers 
 and duties involved in extending the principles of 
 the Interstate Commerce laws over commercial and 
 industrial corporations; for the increased centrali- 
 zation of control in Washington over the trade of 
 the country, the multiplication of Federal office- 
 holders, and bureaucratic intermeddling with 
 business, may be necessary, but are undesirable 
 incidents to the conduct of daily business life. 
 
 That some further regulation over corporations 
 carrying on commerce among the States may be 
 necessary, is a matter of current comment. It 
 has been openly advocated by representatives of 
 some of the largest combinations of capital, per- 
 haps as a means of salvation, and to preserve, 
 under government supervision, great organizations 
 whose continued existence is menaced by the 
 recent interpretation of the Sherman Act, and the 
 disintegration of which would be necessarily 
 attended with much loss. To such, it is a case 
 of "any port in a storm." Better continued co- 
 
152 The Changing Order 
 
 operative life, even under a powerful master, than 
 disseminated properties and segregated activities, 
 without constant governmental supervision. 
 
 But there are other reasons for such regulation. 
 The Federal Department of Justice is not organ- 
 ized or equipped to maintain constant supervision 
 and control over business organizations. It deals 
 only with cases of violation of the law. The ac- 
 tivities of an administrative board or commission 
 would be directed to preventing such violations, 
 and in aiding business men to maintain a continued 
 status of harmony with the requirements of law. 
 
 Moreover, unless Congress shall provide for the 
 establishment of corporations drawing their life 
 and powers only from the national government, 
 and subject only to its control, or shall confer 
 specific powers on State corporations which will 
 enable them to carry on commerce away from the 
 State of their creation, without the interference 
 of States into which they go, the present unsatis- 
 factory condition of conducting business in the 
 different States by means of many different cor- 
 porations, owned or controlled through stock 
 ownership by a parent company created by some 
 one State, will continue, and in the natural, normal, 
 healthy, and legitimate growth of such business, 
 questions of the application of the Sherman Law 
 must arise, which cannot property be settled with 
 the District Attorney or the Department of Justice, 
 but should be dealt with by an administrative body 
 having appropriate jurisdiction. 
 
Regulation of Interstate Commerce 153 
 
 There are still further considerations involved 
 in the question. The tendency of this age is 
 toward cooperation in every field of activity. 
 The early form of cooperative business effort by 
 means of partnerships was found insufficient for 
 large enterprises, because of the unlimited liability 
 imposed on the partners, and the inelastic char- 
 acter of the investment. The great commercial 
 development of the country would scarcely have 
 been possible but for the introduction of coopera- 
 tion in the form of corporations for business 
 purposes, in the early part of the nineteenth cen- 
 tury. The growth of the incorporated companies, 
 the development of close relations between them 
 by agreement, and through reciprocal stock 
 ownership, so unified their power and extended 
 their control, that their employees were driven to 
 cooperative association for protection against the 
 suppression of their rights, and for the purpose of 
 compelling better recognition of their claims to 
 larger recognition in the division of profits. The 
 problems of modern commercial life are vast. 
 They affect not only employer and employed, but 
 the public. Facilities of transportation and for 
 the transmission of intelligence have brought all 
 parts of the world into close touch. Any eco- 
 nomic disturbance in one part of the country 
 affects to a greater or less extent every other part 
 of the country. Common needs have developed, 
 and commodities of many kinds are standardized. 
 Prices, should be reasonable. Destructive com- 
 
154 The Changing Order 
 
 petition, while it is attended with abnormally low 
 prices, never produces reasonable prices. Indeed, 
 abnormal price is one of the indicia of monopoly. 
 Fair competition is essential to healthy national 
 life, but it is more than doubtful whether or not 
 there can be fair competition without concert of 
 action or cooperative effort to some extent. 
 Business men of integrity are naturally desirous 
 of avoiding violations of law. The construction 
 of the Sherman Law originally contended for would 
 have condemned them for any concerted action 
 which imposed any restraint on trade. The more 
 enlightened view which has been expressed by the 
 Supreme Court limits the prohibition to undue 
 restraints — those which are not the result of nor- 
 mal business methods, but which are intended to 
 accomplish, or have for their direct and primary 
 purpose, interference with the natural course of 
 trade and commerce among the States or with 
 foreign countries. Yet even within these rules, 
 it is contended, there is an area of activity where 
 cooperation and association should only have play 
 under government supervision and control. 
 
 With such supervision, a natural economic force 
 may be utilized to the public benefit and to the 
 general satisfaction of the commercial world. By 
 it, while monopolies and restraints of trade will 
 still be held at bay by the terrors of the anti- 
 trust act, thousands of small traders may by 
 regulated cooperation protect themselves from 
 the ruin of destructive competition on the one 
 
Regulation of Interstate Commerce 155 
 
 hand, and from the constant apprehension of 
 indictment on the other. 
 
 Whether or not such a Federal Industrial Com- 
 mission should have power to regulate prices would 
 almost certainly arise for serious consideration. 
 The Interstate Commerce Law prescribes as a legis- 
 lative rule that prices for transportation by rail, 
 or wire, or pipe line, shall be reasonable, and that 
 no unjust discrimination shall be made between 
 individuals or localities similarly situated. It 
 leaves it to the Commission to determine when this 
 legislative standard is departed from and to take 
 proceedings appropriate to compel compliance 
 with it. A similar rule might be declared by 
 Congress with respect to the prices of commodities 
 the subject of interstate commerce. 
 
 We have become accustomed to the regulation 
 of rates of transportation, but the suggestion that 
 prices of commodities be regulated by Congress 
 seems novel and radical. Yet the principle on 
 which the regulation of transportation rates is 
 based, is simply that when property is used in a 
 manner to make it of public consequence and affect 
 the community at large it becomes clothed with a 
 public use, and may be controlled by the public 
 for the common good. In the early days in some 
 parts of this country statutes were enacted to 
 regulate the business of millers and the rates they 
 might charge for grinding. At that time it was 
 a matter of public concern that every farmer should 
 have the right to have his corn ground at a 
 
156 The Changing Order 
 
 reasonable rate. So to-day the conduct of the 
 great commerce in staple articles among the States 
 is become a matter of public consequence, and the 
 courts have upheld legislation regulating it by- 
 prescribing some of the conditions under which it 
 may be carried on. To require as one of these con- 
 ditions that prices for commodities dealt in inter- 
 state commerce must be reasonable, only involves 
 a new application of the same principle. 
 
 Indeed, unless prices be dealt with under such a 
 law it would fail to reach the essential evil; for 
 " unified tactics with regard to prices" has been 
 authoritatively declared to be the essence of 
 modern monopoly, and as was said in the case of 
 National Cotton Oil Co. v. Texas (197 U. S., 115- 
 129), "It is the power to control prices which 
 makes the inducement of combinations and their 
 profit. It is such power that makes it the con- 
 cern of the law to prohibit or limit them." But 
 legislative control of prices smacks of medieval 
 sumptuary legislation and is foreign to the genius 
 of our institutions. Students of Adam Smith are 
 taught to believe that the natural price of an arti- 
 cle is that which is fixed by the operations of the 
 natural unrestrained law of supply and demand, 
 working without any artificial restraint. The 
 anti-trust legislation of the United States and of 
 most of the States is based upon this theory. It 
 is said in The Wealth of Nations: 
 
 The price of monopoly is upon every occasion the 
 highest which can be got. The natural price, or the 
 
Regulation of Interstate Commerce 157 
 
 price of free competition, on the contrary, is the lowest 
 which can be taken, not upon every occasion, indeed, 
 but for any considerable time together. 1 
 
 But the fact is, that the law of supply and de- 
 mand does not and has not for many years worked 
 in this country in a natural, unrestrained, and 
 unfettered manner. The Government, in the first 
 instance, interposes an artificial restraint in the 
 protective tariff on imports. True, the theory of 
 this tariff is to equalize conditions of competition; 
 to place, as it were, a handicap on the foreign 
 competitor who has produced his commodities 
 under conditions less burdensome than those 
 under which the American manufacturer pro- 
 duces his. In fact, the inequalities resulting 
 from the methods of tariff legislation are very 
 often impossible to justify on the theory of 
 sufficient protection only, and the resulting price is 
 that fixed by a limited competition between dealers 
 in the market from which foreign competitors are 
 to a certain extent excluded. Nor is this all : It is 
 probably safe to say that in almost every one of 
 the great staple industries, prices have been for 
 years fixed by agreement between the principal 
 producers, and not by the normal play of free com- 
 petition even among the domestic producers, nor 
 by the unfettered operation of the law of supply 
 and demand. 
 
 1 Ed. Geo. Bell & Co., London and New York, 1896, vol. i., 
 p. 62. 
 
158 The Changing Order 
 
 Take, for instance, the facts concerning the 
 powder and explosive business, as found by the 
 United States Circuit Court in the recently decided 
 case to which I have already referred. 
 
 The record of the case now before us [said Judge 
 Lanning] shows that from 1872 to 1902, a period of 
 thirty years, the purpose of the trade associations 
 had been to dominate the powder and explosives 
 trade in the United States by fixing prices, not 
 according to any law of supply and demand, for 
 they arbitrarily limited the output of each member, 
 but according to the will of their managers. It ap- 
 pears, further, that although these associations were 
 not always strong enough to control absolutely the 
 prices of explosives, their purpose to do so was never 
 abandoned. Under the last of the trade association 
 agreements — the one dated July 1 , 1896, and which was 
 in force until June 30, 1904 — the control of the com- 
 bination was firmer than it had before been. Succeed- 
 ing the death of Eugene du Pont in January, 1902, 
 and the advent of Thomas Coleman du Pont and 
 Pierre S. du Pont, the attempt was made to continue 
 the restraint upon interstate commerce and the 
 monopoly then existing, by vesting, in a few corpora- 
 tions, the title to the assets of all the corporations affili- 
 ated with the trade association, then dissolving the 
 corporations whose assets had been so acquired, 
 and binding the few corporations owning the operating 
 plants in one holding company, which should be able 
 to prescribe policies and control the business of all the 
 subsidiaries without the uncertainties attendant upon 
 a combination in the nature of a trade association. 
 That attempt resulted in complete success. 
 
Regulation of Interstate Commerce 159 
 
 For years, the Court said, trade agreements 
 between all manufacturers of powder and explosives 
 in the United States have been in existence. There 
 were times when the parties to these agreements 
 broke away from and disregarded them, but usually 
 the fines and penalties imposed on the violators 
 were effective to protect and effectuate them. 
 
 A large number of indictments recently found 
 in the Southern District of New York, were based 
 upon evidence of the continued existence during 
 a number of years, and until a recent date, of 
 pools, or associations of manufacturers of various 
 kinds of wire, under which official and noncom- 
 petitive prices were fixed, determined, agreed 
 upon, and maintained. 
 
 The fact seems to be, that the prices of many 
 standard articles of consumption sold in the United 
 States for a number of years past have not been 
 fixed at all by the operation of the laws of supply 
 and demand, or by unrestrained competition, but 
 by associations of the producers, without the 
 participation of the consumer or the general public 
 — that is, without those who have had to pay the 
 bill having any voice in fixing the price. In this 
 view, it is certainly not unreasonable that the 
 purchasing public should desire to have some part 
 in determining the price it is to pay — in like man- 
 ner as has been recognized to be just with respect 
 to the cost of transportation. 
 
 If there could be any assurance that the free 
 play of competition would be assured, and the 
 
160 The Changing Order 
 
 natural price resulting from the unrestrained 
 operation of supply and demand maintained, then 
 no governmental supervision of business — beyond 
 occasional prosecutions for violations of the Sher- 
 man Law — would be necessary. But the habits 
 formed through years of following a system are not 
 easily shaken off, and the artificial forms of or- 
 ganizations made necessary by the conflicting 
 laws of many States with those of the nation will 
 always present a border land of doubt, which will 
 furnish, on the one hand, opportunities for those 
 who wish to violate the law to do so with some 
 show of justification ; and on the other, to perplex 
 those who are sincerely desirous of keeping the 
 law, but by reason of the complexity and conflict 
 of different State laws find it difficult to do so 
 without seeming to run counter to the anti-trust 
 law. The supervision of a Federal commission 
 might supply a satisfactory method of reaching 
 this difficulty. 
 
 In theory, it would seem that such a commission 
 should have some power over prices; but the prac- 
 tical difficulties in the way of exercising such power 
 so as not to inflict a greater evil than that it is 
 intended to cure, are so great as perhaps to be 
 insurmountable. It would be well-nigh impossible 
 to fix a maximum price which would not be, on the 
 one hand unjust to the small producer, and on the 
 other hand unduly to increase the profit of the large 
 producer. For the large producer, with an ad- 
 equate supply of raw material, and the economies 
 
Regulation of Interstate Commerce 161 
 
 and efficiencies only possible with a large capital 
 and extensive organization, can always afford to 
 sell at prices which would be ruinous to the small 
 producer. 
 
 These problems go to the very root of the con- 
 tinued prosperity of our people. They can only 
 be solved by a careful consideration free from any 
 partisan bias. I have not attempted to express a 
 conclusion, but merely to state the elements of a 
 problem which, if wisely determined, will "scatter 
 plenty o'er a smiling land," and if unwisely dealt 
 with, may paralyze the hand of industry that mak- 
 eth rich — not with the unequal wealth of monopoly, 
 but with the distributed wealth which brings 
 national prosperity and continued peace. 
 
X 
 
 RESULTS OF THE TRUST DISSOLUTION 
 SUITS 1 
 
 THE trust question ; that is the question of the 
 proper relation of the Government to large 
 business organizations, is a great economic ques- 
 tion which should not be made the football of 
 politics. The men who united in framing the 
 Sherman Anti-trust Law were Democrats as 
 well as Republicans. In the final debate in the 
 Senate, one of the clearest statements of the 
 need and purpose of that legislation, was made 
 by Senator George, a Democratic Senator from 
 Mississippi. 
 
 Since President Taft came into office, eleven 
 (n) final decrees have been entered in equity suits 
 brought by the Government under the Sherman 
 Law to prevent and restrain violations of the act ; 
 two (2) large combinations of competitive con- 
 cerns have been voluntarily dissolved, following 
 criminal prosecutions of individuals concerned in 
 them; and in one other instance, a temporary 
 
 1 From an Address before the Finance Forum, West Side 
 Young Men's Christian Association, New York, Nov. 13, 19 12. 
 
 162 
 
Results of Trust Dissolution Suits 163 
 
 injunction resulted in the abandonment of a 
 comprehensive movement to increase railroad 
 rates, prior to the enactment of the law which gave 
 to the Interstate Commerce commission power to 
 prevent increases until it should have investigated 
 the justice of making them. Of these decrees, 
 three (namely, those against the Standard Oil 
 Combination, the Tobacco combination, and the 
 Powder combination) were directed against what 
 are technically known as trusts; that is, the kind 
 of things spoken of by Senator Sherman when he 
 introduced his original bill into the Senate in 
 March, 1890: 
 
 Associated enterprise and capital are not satisfied 
 with partnerships and corporations competing with 
 each other, and they have invented a new form 
 of combination commonly called trusts, that seek 
 to avoid competition, by combining the controlling 
 corporations, partnerships and individuals engaged 
 in the same business, and placing the power and 
 property of the combination under the government 
 of a few individuals. . . . 
 
 Perhaps the simplest definition of a modern trust 
 is "a partnership of competitive corporations." 
 Now, the decrees in the cases above mentioned 
 struck down three of the greatest existing partner- 
 ships of competitive corporations controlling 
 great industries which ever have grown up in the 
 United States. They also established the prin- 
 ciple that monopoly and unfair restraint of com- 
 
164 The Changing Order 
 
 petition could not successfully entrench themselves 
 behind stock ownership; but that in whatever 
 form the control of great industries is absorbed 
 into a few hands, the law can search into the 
 organization, and if it be found that an undue 
 restraint is put upon interstate commerce, or a 
 monopoly threatened, the Court can end that 
 restraint or break up that monopoly. 
 
 In another case, namely, the suit against the 
 Terminal Association of St. Louis, the unification 
 of substantially every terminal facility by which 
 the traffic of that city was served, was scrutinized 
 by the Supreme Court, and, recognizing the 
 peculiar topographical conditions of the city, the 
 combination was permitted to continue; but only 
 upon condition that its organization be so modified 
 that the Association should act as the impartial 
 agent of every line which was under compulsion 
 to use its instrumentalities. 
 
 Eight (8) of the other decrees mentioned ran 
 against combinations of (i) manufacturers of 
 incandescent electric lamps; (2, 3) manufacturers 
 of plumbing supplies and of sanitary enamel ware; 
 (4) wholesale grocers; (5) manufacturers and 
 dealers in kindling wood; (6) manufacturers of 
 window glass; (7) manufacturers of what is known 
 as plate matter and ready print matter for use in 
 newspapers; and (8) manufacturers and importers 
 of aluminum and the raw material from which it is 
 produced. All of these were cases where indepen- 
 dent manufacturers or dealers — competitors in 
 
Results of Trust Dissolution Suits 165 
 
 business — had united in various agreements, hav- 
 ing for their purpose and necessary effect the 
 fixing of prices, control of territory, and partition- 
 ing of business among themselves, and the exclu- 
 sion of competition. 
 
 Following the prosecution of the Beef Packers 
 in Chicago, who were charged with combining 
 for the purpose of controlling the price in meat 
 and meat products, the National Packing Com- 
 pany (a corporation which had been organized to 
 take over a very large number of competing plants 
 which had been acquired by representatives of the 
 three great packing interests) was dissolved, and its 
 properties scattered all over the United States, ag- 
 gregating upwards of sixty million dollars in value, 
 were distributed pro rata to and among the owners 
 of the stock of the Packing Company. This 
 distribution was so made as not only to remove 
 the restraint on competition which was wrought 
 by keeping all of these properties under one cor- 
 porate control, but in many instances to induce 
 competition in places where there was previously 
 none. Moreover, many of these plants had been 
 conducted under the names of their original own- 
 ers, their actual ownership being unknown. This 
 practice was terminated, and the business at these 
 plants is now being conducted in the names of their 
 actual owners. Besides these cases, in which final 
 decrees have been actually entered, suits are pend- 
 ing and now being actively prosecuted against such 
 large combinations as: 
 
166 The Changing Order 
 
 The United States Steel Corporation ; the Ameri- 
 can Sugar Refining Company; the National Cash 
 Register Company; the United Shoe Machinery 
 Company; the Keystone Watch Case Company; 
 the American Naval Stores Company (known as 
 the turpentine trust) the International Harvester 
 Company; the New Departure Company (the 
 combination manufacturing and controlling coaster 
 brakes). 
 
 These various concerns are charged with exist- 
 ing in violation of the anti-trust law. 
 
 A suit to terminate the control by the Union 
 Pacific Railroad system of the Southern Pacific 
 Railroad system has been argued in the Supreme 
 Court of the United States and now awaits deci- 
 sion. x A suit to dissolve the combination between 
 the carriers and producers of anthracite coal in 
 Pennsylvania, New Jersey, and New York has also 
 been argued in the Supreme Court and awaits 
 decision. 2 A suit to terminate a combination of 
 bituminous coal-carrying roads in Ohio and West 
 Virginia has been argued and submitted to the 
 Circuit Court of Appeals in the Ohio circuit, and 
 awaits decision. 3 Four (4) different suits are 
 pending against combinations of steamship lines 
 which control certain forms of traffic between the 
 
 1 Decided in favor of the Government, Dec. 12, 1912 (226 U. S., 
 61, 470). 
 
 3 Decided partly in favor of Government, partly in favor of 
 defendants, Dec. 16, 1912 (226 U. S., 324). 
 
 3 Decided in favor of the Government, Dec. 28, 191 2. Final 
 decree entered March 14, 1914. 
 
Results of Trust Dissolution Suits 167 
 
 United States and foreign countries; five (5) suits 
 are pending against combinations of lumber dealers 
 formed for the purpose of regulating and control- 
 ling competition in that business, and especially of 
 preventing retail dealers from purchasing directly 
 from the wholesalers, instead of buying directly 
 from jobbers; one (1) suit is pending against a 
 combination of magazine publishers formed to 
 control prices and fix the terms on which retailers 
 may deal in their publications; and one (1) suit 
 against a combination of bill-posters, organized 
 to monopolize the business of bill-posting through- 
 out the United States, was recently brought and 
 is now pending. A prosecution of a number of 
 persons engaged in a pool formed for the purpose of 
 controlling the entire supply of free cotton of a 
 given season has been twice argued in the Supreme 
 Court and awaits decision. 1 
 
 Now, before considering the effect of all these 
 suits, we must first stop to consider what the law 
 upon which they are based was intended to accom- 
 plish, because that must be the criteria by which 
 to judge the results achieved. There seems to be a 
 good deal of popular misconception on this point, 
 and much current discussion has proceeded, ap- 
 parently on the theory that the object of the law 
 was to secure the confiscation or destruction of the 
 property employed by the combinations declared 
 to be illegal by the act. Indeed much of the 
 
 1 Decided in favor of the Government, Jan. 6, 1913 (226 U. S. t 
 
 525). 
 
1 68 The Changing Order 
 
 criticism of the results of the dissolution of the 
 Tobacco and the Standard Oil combinations has 
 been based simply upon the fact that the selling 
 value of the stocks of the constituent companies 
 had increased. 
 
 Yet the Supreme Court declared in the Standard 
 Oil case, and reiterated in the St. Louis Terminal 
 case, that while injury to the public by the pre- 
 vention of an undue restraint on, or the monopoliza- 
 tion of, trade or commerce, is the foundation upon 
 which the prohibitions of the statute rest, one of 
 the fundamental purposes of the statute is to 
 protect, and not to destroy rights of property. And 
 in the Tobacco case, the Supreme Court laid great 
 stress upon its duty, while giving complete and 
 efficacious effect to the prohibitions of the statute, 
 to do so with as little injury as possible to the 
 interests of the general public, and with a proper 
 regard to the vast interests of private property 
 involved. 
 
 This principle was observed in the Standard 
 Oil decree, by directing the distribution of the 
 stocks of the corporations held by the New Jersey 
 Company pro rata among its stockholders, and 
 enjoining the several corporations from in the 
 future doing any acts of the character of those by 
 which the combination had been created and 
 maintained. In the Tobacco case, where upwards 
 of an hundred millions of bonds, and nearly eighty 
 millions of preferred stock in the hands of the 
 investing public were involved, the Court ordered 
 
Results of Trust Dissolution Suits 169 
 
 such a distribution of the properties of the com- 
 bination among fourteen separate corporations 
 as should give to no one of them an actual or 
 potential monopoly of any part of the business, 
 and then enjoined those companies from methods 
 of organization or business which would make 
 possible new combination or monopoly. 
 
 The first great combination that was broken 
 up under the Sherman Law was one of manufac- 
 turers of sewer pipe, to divide territory, suppress 
 competition in bidding, and control the prices of 
 their product. This was consummated by the 
 judgment of a Circuit Court of Appeals presided 
 over by President Taft, when he was Circuit Judge, 
 which was unanimously affirmed by the Supreme 
 Court in 1899. 
 
 The next great result obtained was the dissolu- 
 tion of the Northern Securities Company in 1904. 
 The decree there practically compelled the Securi- 
 ties Company to distribute the stocks of the two 
 great trans-continental railroad companies which 
 it held (that is, the Northern Pacific and Great 
 Northern) pro rata among its stockholders. The 
 immediate result of that distribution was to make 
 the same people owners, in the same proportion, 
 of the stocks of those two competing systems. 
 That was, however, but a temporary condition, 
 and for a long time past no one has suggested that 
 these two systems are under a common control. 
 It was also followed by an enormous rise in the 
 market price of these railroad stocks; yet no 
 
170 The Changing Order 
 
 one has ever questioned the great benefit resulting 
 to the public from the termination of the unified 
 control over those two particular systems; and, 
 far more important, it resulted in arresting the 
 process of concentrating the ownership of railroads 
 into a few hands, which was then going rapidly- 
 forward. 
 
 The third great step in the enforcement of this 
 law was its application to the great industrial trusts 
 in the Standard Oil and Tobacco cases. The 
 beneficial results of those decisions ought not to 
 be obscured by the temporary high prices of the 
 stocks of the constituent companies quoted on the 
 curb market. There is a perfectly obvious reason 
 for these high prices. Before the Government 
 suits were brought, no outsiders knew anything 
 about the value of the properties of the Standard 
 Oil combination ; nor with accuracy of the Tobacco 
 trust. The evidence adduced in those suits 
 afforded the public some idea of the vast amount of 
 property which had been acquired by them, and 
 led to the speculative prices which followed the 
 distribution. The great accomplishment of the 
 decisions is in wiping away all artificial barriers 
 to the enforcement of the law, establishing its 
 supremacy over the largest combinations, and 
 demonstrating its sufficiency to reach the actual 
 evil of monopoly, no matter in what form it is 
 clothed. 
 
 The properties and business of the Standard Oil 
 combination were distributed among more than 
 
Results of Trust Dissolution Suits 171 
 
 thirty corporations, which were compelled there- 
 after to conduct their businesses separately and 
 independently of each other. The properties and 
 businesses of the Tobacco combination were dis- 
 tributed among fourteen, and those of the Powder 
 trust, among three separate corporations. The 
 decrees prohibited the different companies from 
 having common directors, common officers, com- 
 mon agents; from occupying the same offices; 
 from making contracts with each other tending to 
 prevent the freest competition and the most inde- 
 pendent action; from carrying on business in 
 any name but their own, and from lending finan- 
 cial assistance to each other. In the decrees 
 against the various combinations of independ- 
 ent manufacturers formed by agreement among 
 themselves, a large variety of practices which in 
 the past had resulted in crushing out fair and 
 useful competition, and in centralizing control 
 over the business in the combination, have been 
 expressly prohibited. Thus, in the suit against 
 the Pacific Coast Plumbing Supply Association 
 twenty-four corporations and sixty individuals 
 were enjoined: 
 
 From combining, etc., to prevent manufacturers 
 of plumbing supplies from selling to persons not 
 members of the association or not listed in a blue 
 book published by the association; 
 
 From publishing any such book; 
 
 From publishing any list of manufacturers 
 who had not agreed to sell only to members of 
 
172 The Changing Order 
 
 the association or to persons listed in the blue 
 book; 
 
 From advertising lists of persons in the business 
 who are not members of the association; 
 
 From combining to boycott a manufacturer for 
 having sold to persons not members of the associ- 
 ation and not listed in the blue book; 
 
 From conspiring to prevent persons located in a 
 given territory from purchasing plumbing supplies 
 from manufacturers or other dealers; 
 
 From communicating with a manufacturer or 
 dealer to induce him not to sell to persons not 
 members of the association or not conforming to 
 the definition of a jobber, given in the blue book. 
 
 In the decree against the manufacturers of 
 electrical incandescent lamps, a large number of 
 corporations, all of whose stock was owned by the 
 General Electric Company, had carried on business 
 ostensibly as independent companies, but really 
 under the control of the General Electric Company ; 
 they were ordered to be dissolved and their busi- 
 ness in the future to be conducted in the name of 
 the General Electric Company. The making and 
 performance of certain contracts whereby the 
 manufacturers agreed to sell goods only to the 
 General Electric, or as permitted by them, or on 
 terms or prices fixed by them, were enjoined. 
 Independent competitive companies were enjoined 
 
 From fixing prices by agreement; 
 
 From maintaining by agreement, differentials 
 between lamps which did not in fact differ in 
 
Results of Trust Dissolution Suits 173 
 
 quality or efficiency and from allowing discounts 
 based on the aggregate of purchases from different 
 manufacturers. 
 
 From making agreements with jobbers, etc., 
 under which they could only secure goods manu- 
 factured by the General Electric Company on 
 condition of agreeing to take all other goods 
 manufactured by them; 
 
 From making more favorable terms of sale to 
 customers of any rival manufacturer than it at 
 the same time offered to its established trade, with 
 the purpose of driving such rival out of business. 
 
 An interesting decree was rendered in the case 
 against the Central West Publishing Company 
 and the Western Newspaper Union. These two 
 concerns are substantially the only ones in the 
 country engaged in the business of manufacturing 
 and selling ready-print papers, and stereotype 
 plates, both of which are used by a vast number 
 of newspapers, largely the country press. They 
 were enjoined against combining with each other 
 and thus preventing any competition whatever in 
 the business, and they were both enjoined: 
 
 1. From underselling any competing service 
 with the intent or purpose of injuring or destroying 
 a competitor. 
 
 2. From sending out traveling men for the 
 purpose or with instructions to influence the cus- 
 tomers of the competitors or either of them so as 
 to secure the trade of the customers, without regard 
 to the price. 
 
174 The Changing Order 
 
 3. From selling their goods at less than a fair 
 and reasonable price with the purpose or intent 
 of injuring or destroying the business of a com- 
 petitor. 
 
 4. From threatening any customer of a com- 
 petitor with starting a competing plant unless he 
 patronized the defendant. 
 
 5. From threatening the competitors of either 
 one that they must either cease competing with 
 the defendants or sell out to one of the defendants, 
 under threat that unless they did so their business 
 would be destroyed by the establishment of nearby 
 plants to compete with them. 
 
 6. From in any manner, directly or indirectly, 
 causing any person to purchase stock or become 
 interested in the other for the purpose or effect 
 of harassing it with unreasonable demands or 
 inquiries. 
 
 7. From circulating reports injurious to the 
 business of the other. 
 
 8. From persuading customers of competitors 
 to violate contracts made with them by under- 
 taking to indemnify them against loss and damage 
 by reason of so doing. 
 
 Every one of these decrees dealt with forms of 
 unfair competition, which investigation had shown 
 to have been resorted to for the purpose of con- 
 trolling prices and suppressing competition. An 
 examination of the different decrees will demon- 
 strate that the decision in the Tobacco case has 
 been put into practical effect and that the Federal 
 
Results of Trust Dissolution Suits 175 
 
 courts are exercising in equity suits under the 
 Sherman Law, a power to restrain which is co- 
 extensive with the evils against which it was 
 enacted. That statute strikes at undue restraints 
 of the trade and commerce of the United States 
 and attempts to monopolize it, and empowers the 
 courts of equity of the United States to make such 
 decrees as will be effective to prevent and restrain 
 every form in which such restraints or attempts 
 to monopolize may be found to exist. 
 
 The first tangible result of these dissolution suits 
 is found in the fact that no new combinations or 
 trusts, such as the Standard Oil, Tobacco, Sugar, 
 Steel, Harvester, or the like, have been formed 
 during the last four years. So long as the statute 
 remains in its present form, none will be formed, 
 unless the law department of the national govern- 
 ment shall cease to be vigilant in the enforcement 
 of the law. The next result is, that it has become 
 apparent that the field of enterprise is open to 
 competition if any choose to embark in it. Only 
 a few days since, the formation of a new corpora- 
 tion with a substantial capital was announced to 
 engage in the tobacco business in competition with 
 the companies resulting from the disintegration of 
 the trust. Since the disintegration of the Tobacco 
 trust, all of the stock of the United Cigar Stores 
 has been sold to persons having no connection 
 with the old trust, and that big retail corporation 
 is carrying on its business independently of the 
 companies with which it was formerly affiliated. 
 
176 The Changing Order 
 
 A fight for the control of the company between 
 the holders of a majority of the stock of the 
 Waters-Pierce Oil Company, to whom it was dis- 
 tributed by the Standard Oil Company, after the 
 Supreme Court's decision, and the minority holders, 
 has resulted in the sale of that majority stock, or a 
 large part of it, to that minority, and thereby the 
 elimination of Standard Oil interests from that 
 corporation. 
 
 The regulation of rates of transportation of oil 
 through the pipe lines owned by the companies, 
 which were controlled by the Standard Combina- 
 tion by means of the enforcement of the Hepburn 
 Act by the Interstate Commerce Commission, also 
 promises to remove all unfair advantage of the 
 large refining and marketing companies over the 
 terms and conditions of transportation, which 
 constituted so potent a factor in building up the 
 trust. 
 
 But the criticism is made that these suits have 
 not resulted in reducing the price of commodities 
 dealt in; and it is argued that as one of the evils 
 of monopoly is the control of prices, the fact that 
 prices have not been reduced is evidence that the 
 monopoly has not been destroyed. The criticism 
 is a superficial one. Scarcely a year has passed 
 since the principal dissolutions took place, and it 
 can hardly be expected that the results of twenty 
 years of successful monopolization can be undone 
 in less than one year. In the next place, the 
 various companies among which the business of 
 
Results of Trust Dissolution Suits 177 
 
 former combinations has been distributed are not 
 likely to embark on a sharp price-cutting com- 
 petition unless compelled to. The prices of raw 
 materials have been distinctly affected by the 
 dissolution, and both tobacco leaf and crude oil 
 sell at much higher prices since the unification of 
 substantially all the buyers has been removed, 
 than those which previously prevailed. There 
 has been some advance in the price of a few pro- 
 ducts of petroleum, such as gasoline, due to the 
 enormous increase in demand for the refined article, 
 and the increase in the price of crude oil. There 
 has been no increase in the price of tobacco pro- 
 ducts, but there is an enormously increased 
 competition in pushing the sale of different brands 
 of tobacco by means of extensive advertising. 
 
 More important than all of these, the unfair 
 methods of competition resorted to in the past 
 have been checked and in large measure destroyed, 
 so that the field is open to fair competition and 
 enterprise to a larger degree, I believe, than for 
 many years past. Of course, this has its dis- 
 advantages as well as its advantages. It is im- 
 possible in many lines of industry to maintain what 
 the producers consider to be satisfactory prices, 
 and some complaint is made in different trades, 
 because the producers are advised that they cannot 
 lawfully get together and agree upon and main- 
 tain prices which will afford them a satisfactory 
 profit. The law is coming to be understood by the 
 community, and substantially the only complaint 
 
178 The Changing Order 
 
 heard against it is from those who wish through 
 some form of combination or agreement, to raise 
 prices or restrict competition. When the pending 
 suits against the great combinations are terminated, 
 I believe no abnormally large combinations will be 
 left intact, and the businesses and property now 
 held by them will be distributed among a sufficient 
 number of separate and distinct companies to 
 remove all possible fear of undue influence by 
 them over the business of the country. If their 
 future activities are restricted by injunctive 
 provisions in adequately drawn decrees, and the 
 government law department is vigilant in seeing 
 that they are complied with, it is my hope that 
 no further legislation will be necessary to protect 
 against undue restraints of interstate commerce. 
 
XI 
 
 FEDERAL CONTROL OF STOCK AND 
 BOND ISSUES BY INTER- 
 STATE CARRIERS 1 
 
 IN a special message to Congress in January, 19 10, 
 the President recommended the enactment of a 
 law regulating the issue of stocks and bonds by rail- 
 road companies subject to the Interstate Commerce 
 Act, for any purpose connected with or relating to 
 any part of its business governed by that act. 
 The Republican platform of 1908 had declared in 
 favor of such legislation. The President expressed 
 his opinion that it would be plainly within the 
 jurisdiction of Congress. The bills for the amend- 
 ment of the Interstate Commerce Act, in ac- 
 cordance with the President's recommendations, 
 introduced into each House of Congress, contained 
 provisions prescribing the conditions under which 
 stocks and bonds should be issued. The necessity 
 of expressing such regulations in negative and 
 restrictive form, because applied to corporations 
 deriving their corporate life and powers from State 
 
 1 An address delivered before the Illinois State Bar Associa- 
 tion, at Chicago, June 24, 1910. 
 
 179 
 
180 The Changing Order 
 
 laws, resulted in complicated provisions not easily 
 understood by those unfamiliar with the subjects 
 involved. Partly on this account, partly on ac- 
 count of doubts as to the constitutionality of 
 such legislation entertained by most Democrats 
 and by some Republicans, the provisions dealing 
 with that subject were dropped from the bill, but 
 a clause was inserted authorizing the President to 
 appoint a Commission to investigate "questions 
 pertaining to the issuance of stocks and bonds 
 by railroad corporations subject to the provisions 
 of the Act to Regulate Commerce, and the power 
 of Congress to regulate the same. " 
 
 The first question arising in the consideration 
 of this matter will be, necessarily, the power of 
 Congress to legislate in the premises, and it has 
 therefore seemed to me that a discussion of that 
 subject would be of timely interest. 
 
 The authority of Congress over the issue of stocks 
 and bonds by State railroad corporations engaged 
 in interstate commerce must rest upon the pro- 
 visions of Section 8 of Article I. of the Constitution, 
 granting to the Congress power — 
 
 To regulate commerce with foreign nations, and 
 among the several States, and with the Indian tribes, 
 [and] . . . 
 
 To make all laws which shall be necessary and proper 
 for carrying into execution the foregoing powers. . . . 
 
 This grant vested in the Congress a power in its 
 nature sovereign and exclusive over such commerce, 
 
Federal Control of Stocks and Bonds 181 
 
 to be exercised in such manner as Congress in its 
 wisdom should deem fit, provided the means 
 adopted should be in some respect appropriate or 
 adapted to carrying into execution the powers so 
 conferred. But the relationship between the 
 means and the end need not be direct and im- 
 mediate. * 
 
 No better definition of this power, and no clearer 
 statement of the principles governing its construc- 
 tion and exercise, ever has been formulated than 
 the opinion of Alexander Hamilton on the con- 
 stitutionality of a national bank law, rendered 
 February 23, 1791. Thomas Jefferson, then Sec- 
 retary of State, and Edmund Randolph, the At- 
 torney-General, had united in advising President 
 Washington that Congress was without power to 
 establish a national bank, their objections being 
 founded on a general denial of the authority of the 
 United States to erect corporations. But Ham- 
 ilton asserted that the national government was 
 empowered to create corporations whenever the 
 Congress deemed such action necessary or proper 
 to carry out more effectually any power conferred 
 by the Constitution; that such power was "in- 
 herent in the very definition of government, and 
 essential to every step of the progress to be made 
 by that of the United States." 
 
 Every power vested in a government [he main- 
 tained] is in its nature sovereign and includes by force 
 
 'Legal Tender Cases, 12 Wall., 457, 543. 
 
1 82 The Changing Order 
 
 of the term a right to employ all the means requisite 
 and fairly applicable to the attainment of the ends of 
 such power and which are not precluded by restrictions 
 and exceptions specified in the Constitution, or not 
 immoral, or not contrary to the essential ends of 
 political society. . . . 
 
 The circumstance that the powers of sovereignty 
 are in this country divided between the National and 
 State governments does not afford the distinction 
 which makes this principle inapplicable to the United 
 States. 
 
 It does not follow from this, that each of the portion 
 of powers delegated to the one or to the other, is not 
 sovereign with regard to its proper objects. It will only 
 follow from it, that each has sovereign power as to 
 certain things, and not as to other things. 
 
 He held the power to erect corporations to be 
 unquestionably incident to sovereign power, and 
 consequently to that of the United States "in 
 relation to the objects entrusted to the manage- 
 ment of the Government." 
 
 The difference is this* where the authority of the 
 Government is general, it can create corporations in 
 all cases; where it is confined to certain branches of 
 legislation it can create corporations only in those 
 cases. 
 
 The only question to be considered was whether 
 the means to be employed, or the corporation to be 
 erected, has any natural relation to any acknowl- 
 edged objects or lawful ends of the government. 
 
Federal Control of Stocks and Bonds 183 
 
 If the end be clearly comprehended within any of 
 the specified powers, and if the measure have an ob- 
 vious relation to that end, and is not forbidden by any 
 particular provision of the Constitution, it may safely 
 be deemed to come within the compass of the national 
 authority. 
 
 In the powers to collect taxes, to borrow money, 
 to regulate trade between the States, and to raise 
 and maintain fleets and armies, he found ample 
 basis for the exercise by Congress of its sovereign 
 power in the creation of a banking corporation 
 for the purpose of aiding in the exercise of those 
 enumerated powers. 
 
 Based upon this executive interpretation, Wash- 
 ington approved the charter of the first United 
 States Bank. Twenty-eight years later, the sound- 
 ness of the proposition asserted by the great 
 finance minister was judicially established by the 
 Supreme Court, and Chief Justice Marshall, in 
 expressing the unanimous opinion of the Court, 1 
 could find no better language in which to formu- 
 late the principles of the decision, than a paraphrase 
 of that used by Hamilton. 
 
 We admit [he said], as all must admit, that the 
 powers of the Government are limited, and that its 
 limits are not to be transcended. But we think the 
 sound construction of the Constitution must allow 
 to the national legislature that discretion, with respect 
 to the means by which the powers it confers are to be 
 carried into execution, which will enable that body to 
 
 1 McCulloch v. State of Maryland, 4 Wheat., 316. 
 
184 The Changing Order 
 
 perform the high duties assigned to it, in the manner 
 most beneficial to the people. Let the end be legiti- 
 mate, let it be within the scope of the Constitution, 
 and all means which are appropriate, which are plainly 
 adapted to that end, which are not prohibited, but 
 consist with the letter and spirit of the Constitution, 
 are constitutional. 1 
 
 The Government of the United States though 
 limited in its powers, is supreme, and its laws, when 
 made in pursuance of the Constitution, form the su- 
 preme law of the land, " anything in the constitution or 
 laws of any State to the contrary notwithstanding." 3 
 
 He admitted that among the enumerated powers 
 was not to be found that of establishing a bank or 
 creating a corporation, but he pointed out that 
 among the enumerated powers of government were 
 
 the great powers to lay and collect taxes; to borrow 
 money ; to regulate commerce ; to declare and conduct 
 a war; and to raise and support armies and navies. 
 The sword and the purse, all the external relations, 
 and no inconsiderable portion of the industry of the 
 nation, are intrusted to its government. It can never 
 be pretended that these vast powers draw after them 
 others of inferior importance, merely because they are 
 inferior. Such an idea can never be advanced. But 
 it may with great reason be contended that a govern- 
 ment intrusted with such ample powers, on the due 
 execution of which* the happiness and prosperity of the 
 nation so vitally depends, must also be intrusted with 
 ample means for their execution. 3 
 
 1 McCulloch v. State of Maryland, 4 Wheat., 241. 
 
 »P. 406. 3 Pp. 407-8. 
 
Federal Control of Stocks and Bonds 185 
 
 In Gibbons v. Ogden * there was sharply presented 
 to the Court a consideration of the nature and 
 extent of the power conferred by the Constitution 
 upon the Federal Congress "to regulate commerce 
 with foreign nations, and among the several States, 
 and with the Indian tribes. " 
 
 The subject to be regulated is commerce [said the 
 Chief Justice, in oft-quoted language], and our con- 
 stitution being, as was aptly said at the bar, one of 
 enumeration, and not of definition, to ascertain the 
 extent of the power, it becomes necessary to settle the 
 meaning of the word. . . . Commerce, undoubt- 
 edly, is traffic, but it is something more — it is inter- 
 course. It describes the commercial intercourse 
 between nations and parts of nations in all its branches, 
 and is regulated by prescribing rules for carrying on 
 that intercourse. 
 
 Mr. Justice Johnson somewhat elaborated this 
 definition: — 
 
 Commerce, in its simplest signification means an 
 exchange of goods; but in the advancement of so- 
 ciety, labor, transportation, intelligence, care, and 
 various mediums of exchange, become commodities, 
 and enter into commerce; the subject, the vehicle, 
 the agent and their various operations, become the 
 objects of commercial regulation. Ship-building, the 
 carrying trade, and propagation of seamen, are such 
 vital agents of commercial prosperity that the nation 
 which could not legislate over these subjects, would 
 not possess power to regulate commerce. 
 
 1 9 Wheat., 1. 
 
186 The Changing Order 
 
 This power to regulate, the Chief Justice pointed 
 out, was the power — 
 
 to prescribe the rule by which commerce is to be 
 governed. This power, like all others vested in 
 Congress, is complete in itself, may be exercised to its 
 utmost extent, and acknowledges no limitations, other 
 than are prescribed in the constitution. ... If, 
 as has always been understood, the sovereignty of 
 Congress, though limited to specified objects, is 
 plenary as to those objects, the power over commerce 
 with foreign nations, and among the several states, is 
 vested in Congress as absolutely as it would be in a 
 single government, having in its constitution the 
 same restrictions on the exercise of the power as are 
 found in the Constitution of the United States. 
 
 In passing upon the constitutionality of the 
 Employer's Liability Act of June II, 1906 (32 
 Stat., 232), Mr. Justice White cited this definition 
 of Chief Justice Marshall's as one which is and 
 always has been accepted by the Supreme Court; 
 and applied it to sustain the proposition that 
 Congress, under the grant of power to regulate 
 commerce, may lawfully regulate the relation of 
 master and servant in conducting that commerce. r 
 
 "It cannot at the present day be doubted," 
 said Justice Bradley, in delivering the unanimous 
 opinion of the Court in California v. Pacific Rail- 
 road Co., 2 "that Congress, under the power to 
 regulate commerce among the several States, as 
 
 1 The Employer's Liability Cases, 207 U. S., 463. 
 3 127 U. S., 1-127. 
 
Federal Control of Stocks and Bonds 187 
 
 well as to provide for postal accommodations and 
 military exigencies, had authority to pass these 
 laws" — referring to the Pacific Railroad Acts: 
 
 The power to construct, or to authorize individuals 
 or corporations to construct, national highways and 
 bridges from State to State, is essential to the complete 
 control and regulation of interstate commerce. With- 
 out authority in Congress to establish and maintain 
 such highways and bridges, it would be without 
 authority to regulate one of the most important 
 adjuncts of commerce. This power in former times 
 was exerted to a very limited extent, the Cumberland 
 or National road being the most notable instance. 
 Its exertion was but little called for, as commerce was 
 then mostly conducted by water, and many of our 
 statesmen entertained doubts as to the existence 
 of the power to establish ways of communication by 
 land. But since, in consequence of the expansion 
 of the country, the multiplication of its products, 
 and the invention of railroads and locomotion by 
 steam, land transportation has so vastly increased, 
 a sounder consideration of the subject has prevailed 
 and led to the conclusion that Congress has plenary 
 power over the whole subject. 
 
 In 1887, Congress enacted the Interstate Com- 
 merce Act by which it required rates for the trans- 
 portation of freight and passengers in interstate 
 commerce to be just and reasonable, forbade un- 
 just discrimination, and created a commission to 
 determine when any rate was in violation of this 
 statutory rule, and otherwise to exercise a certain 
 
1 88 The Changing Order 
 
 control over interstate carriers. While the con- 
 struction of various provisions of the act has been 
 submitted to the courts in a number of cases, the 
 constitutionality of the act has never been seriously 
 questioned. 
 
 In Mo. Pacific Ry. Co. v. Kansas, 1 the Court 
 quoted from the opinion in Atlantic Coast Line v. 
 North Carolina Corporation Commission, 2 that — 
 
 The elementary proposition that railroads from the 
 public nature of the business by them carried on and 
 the interest which the public have in their operation 
 are subject, as to their State business, to State regula- 
 tion, which may be exerted either directly by the 
 legislative authority, or by administrative bodies en- 
 dowed with the power to that end, is not and could 
 not be successfully questioned in view of the long 
 line of authorities sustaining that doctrine, 
 
 and said, 
 
 The Coast line case was concerned with the exertion 
 of State power over a matter of State concern. But 
 the same doctrines had been often previously ex- 
 pounded in reference to the power of the United States 
 in dealing with a matter subject to the control of that 
 Government. 
 
 In Louisville & Nashville R. R. v. Kentucky 3 
 it was said : 
 
 While there is no general reservation clause in the 
 charter of the L. & N. Co., we think for the reasons 
 
 1 216 U. S., 262. a 206 U. S., 1. * 161 U. S., 677. 
 
Federal Control of Stocks and Bonds 189 
 
 stated in the Pear sail case (161 U. S., 646), that under 
 its police power the people, in their sovereign capacity, 
 or the legislature, as their representatives, may deal 
 with the charter of a railroad corporation, so far as 
 is necessary for the protection of the lives, health or 
 safety of its passengers or the public, or for the security 
 of property or the conservation of the public interests, 
 provided, of course, that no vested rights are thereby 
 impaired. 
 
 When the subject involved affects commerce 
 among the States, this power of control for the 
 public good is vested in and can be exercised by 
 Congress. The power extends, not only to restric- 
 tive, but if in the wisdom of Congress it seem 
 necessary, to prohibitive measures, in order to en- 
 force the rules laid down by Congress respecting 
 the conduct of interstate commerce. 
 
 That the power to regulate commerce between 
 the States involves the power to prohibit such 
 commerce when in the opinion of Congress such 
 prohibition is essential to the public welfare, was 
 recognized and established by the Supreme Court 
 in the Lottery Case. 1 Having asserted that the 
 carrying of lottery tickets from State to State 
 constitutes interstate commerce, and that the 
 regulation of such commerce is within the power 
 of Congress under the Constitution, the Court, 
 speaking by Mr. Justice Harlan, asked: 
 
 Are we prepared to say that a provision which is, 
 in effect, a prohibition of the carriage of such articles 
 1 188 U. S., 321. 
 
190 The Changing Order 
 
 from State to State is not a fit or appropriate mode for 
 the regulation of that particular kind of commerce? 
 
 If a State, when considering legislation for the 
 suppression of lotteries within its own limits, may 
 properly take into view the evils that inhere in the 
 raising of money in that mode, why may not Congress, 
 invested with the power to regulate commerce among 
 the several States, provide that, such commerce shall 
 not be polluted by the carrying of lottery tickets from 
 one State to another? In this connection it must not 
 be forgotten that the power of Congress to regulate 
 commerce among the States is plenary, is complete in 
 itself, and is subject to no limitations except such as 
 may be found in the Constitution. What provision 
 in that instrument can be regarded as limiting the 
 exercise of the power granted? What clause can be 
 cited which, in any degree, countenances the sugges- 
 tion that one may, of right, carry or cause to be carried 
 from one State to another that which will harm the 
 public morals? We cannot think of any clause of that 
 instrument that could possibly be invoked by those 
 who assert their right to send lottery tickets from State 
 to State, except the one providing that no person shall 
 be deprived of his liberty without due process of law. 
 . . . [But] it will not be said to be a part of any 
 one's liberty, as recognized by the supreme law of the 
 land, that he shall be allowed to introduce into com- 
 merce among the States an element that will be con- 
 fessedly injurious to the public morals. 
 
 That regulation may sometimes appropriately 
 take the form of prohibition, the Court illustrated 
 by reference to the acts of Congress with respect 
 
Federal Control of Stocks and Bonds 191 
 
 to the transportation of diseased cattle (Act of 
 May 29, 1884, chapter 60) ; the provisions of the 
 Sherman Anti-Trust Act of July 2, 1890; and the 
 legislation regarding the shipment of intoxicating 
 liquors among the States (Act of August 9, 1890, 
 26 Stat., chapters 313, 328). The Pure Food Law 
 of June 30, 1906, is a later example of the same 
 character of legislation. 
 
 The decision in the Lottery Case was followed 
 in Buttfield v. Stranahan 1 which affirmed the 
 constitutionality of the Act of March 2, 1897 (29 
 Stat., 604), for the prevention of the importation 
 of impure and unwholesome tea. 
 
 In the Commodities Clause Cases 2 the Supreme 
 Court construed the provision contained in the 
 Hepburn Act of June 29, 1906 (34 Stat., 584) — 
 commonly called the commodities clause — to 
 mean that a railway company was thereby pro- 
 hibited from moving in interstate commerce 
 commodities owned by it, or in which it had a 
 direct interest, and from transporting commodities 
 in such commerce under the following circum- 
 stances and conditions: (a) When the commodity 
 has been manufactured, mined, or produced by a 
 railway company or under its authority, and at the 
 time of transportation the railway company has 
 not in good faith, before the act of transportation, 
 parted with its interest in such commodity; (b) 
 when the railway company owns the commodity 
 to be transported in whole or in part; (c) when 
 
 1 192 U. S., 470. 1 213 u. S., 366. 
 
192 The Changing Order 
 
 the railway company at the time of transportation 
 has an interest direct or indirect, in a legal sense, 
 in the commodity — which last prohibition does 
 not apply to commodities manufactured, mined, 
 produced, owned, etc., by a corporation in which 
 the railway company is merely a stockholder — 
 and, as thus construed, declared that the clause 
 was a regulation of commerce inherently within 
 the power of Congress to enact. Reference was 
 made by Mr. Justice White, in writing the 
 unanimous opinion of the Court, to the case of 
 New Haven Railroad v. Interstate Commerce 
 Commission, * in which, to use his own language : 
 
 After much consideration, it was held that the 
 prohibitions of the Interstate Commerce Act as 
 to uniformity of rates and against rebates, operated 
 to prevent a carrier engaged in interstate commerce 
 from buying and selling a commodity which it carried 
 in such a way as to frustrate the provisions of the act, 
 even if the effect of applying the, act would be sub- 
 stantially to render practically impossible the buying 
 and selling by an interstate carrier of a commodity 
 transported by it. 
 
 This case he cited as an authority to demonstrate 
 that the statute, as construed by the Court, was 
 inherently within the power of Congress to enact as 
 a regulation of commerce. 
 
 We do not say this [said the learned Justice] upon 
 the assumption that by the grant of power to regulate 
 
 1 200 U. S., 361. 
 
Federal Control of Stocks and Bonds 193 
 
 commerce the authority of the Government of the 
 United States has been unduly limited on the one hand 
 and inordinately extended on the other, nor do we 
 rest it upon the hypothesis that the power conferred 
 embraces the right to absolutely prohibit the move- 
 ment between the States of lawful commodities, or 
 to destroy the governmental power of the States as to 
 subjects within their jurisdiction, however remotely 
 and indirectly the exercise of such power may touch 
 interstate commerce. On the contrary, putting these 
 considerations entirely out of mind, the conclusion 
 just previously stated rests upon what we deem to be 
 the obvious result of the statute as we have interpreted 
 it; that it merely and unequivocally is confined to a 
 regulation which Congress had the power to adopt and 
 to which all preexisting rights of the railroad com- 
 panies were subordinated. 1 
 
 The case of McCulloch v. Maryland 2 settled the 
 power of Congress to create a corporation, when- 
 ever that was an appropriate means to carrying 
 out a power given to the Congress in the Consti- 
 tution. In the exercise of the power to regulate 
 commerce among the States, Congress passed 
 acts incorporating the Union Pacific Railway 
 Company, in 1862 (12 Stat., 489); the Northern 
 Pacific Railroad Company, in 1864 (13 Stat., 365) ; 
 the Atlantic and Pacific Railway Company, in 
 1866 (14 Stat., 292); and the Texas Pacific Rail- 
 way Company, in 1871 (16 Stat., 473), and the 
 Supreme Court held all of these acts to be valid 
 
 Siting Armour Packing Co. v. United States, 209 U. S., 56. 
 • 4 Wheat., 316. 
 13 
 
194 The Changing Order 
 
 and constitutional exercises of power. x In Luxton 
 v. North River Bridge Co., 2 the constitutionality 
 of an act of Congress incorporating a company to 
 build a bridge across a navigable river between 
 two States was affirmed. 
 
 Prior to the sixties, Congress had enacted much 
 more legislation concerning commerce by water 
 and the instruments of that commerce than 
 respecting commerce by land. The power of 
 Congress over water commerce is no greater than 
 that over land commerce. Both depend upon 
 the same clause in the Constitution: 
 
 Up to a recent date [said Mr. Justice Brewer in 
 In re Debs 3 ] commerce, both interstate and inter- 
 national, was mainly by water, and it is not strange 
 that both the legislation of Congress and the cases in 
 the Courts have been principally concerned therewith. 
 The fact that in recent years interstate commerce has 
 come mainly to be carried on by railroads and over 
 artificial highways has in no manner narrowed 
 the scope of the constitutional provision, or abridged 
 the power of Congress over such commerce. On the 
 contrary, the same fulness of control exists in the one 
 case as in the other, and the same power to remove 
 obstructions from the one as from the other. 
 
 1 See Pacific R.R. removal cases, 115 U. S., 2; Ames v. Kan- 
 sas, in U. S., 449; California v. Pacific Railroad Co., 127 U. S., 
 1; Reagan v. Mercantile Trust Co., 154 U. S., 413; Central 
 Pacific Railroad Co. v. California, 162 U. S., 91; United States 
 v. Union Pacific R.R. Co., 160 U. S., 1; United States v. Union 
 Pacific R.R. Co., 98 U. S., 569. 
 _ » 153 U. S., 525. 3 1 5 8 U. S., 564, 591. 
 
Federal Control of Stocks and Bonds 195 
 
 In some respects, congressional legislation has 
 dealt far more minutely with the subject of water 
 commerce than with that by railroad. 
 
 The navigation laws of the United States provide 
 that only vessels registered pursuant to act of 
 Congress shall be deemed vessels of the United 
 States and entitled to the benefits and privileges 
 appertaining to such vessels, and that they shall 
 enjoy such benefits and privileges only so long 
 as they shall continue to be owned by a citizen 
 of the United States or a corporation of a State, 
 and shall be commanded by a citizen of the United 
 States (U. S. R. S., Sec. 413) : That, with certain 
 exceptions, only vessels built within the United 
 States and belonging wholly to citizens thereof may 
 be lawfully registered (R. S., Sec. 4132) : That no 
 bill of sale, mortgage, hypothecation, or conveyance 
 of any vessel or part of a vessel of the United States 
 shall be valid as against any person other than the 
 grantor or mortgagor, his heirs and devisees and 
 persons having actual notice thereof, unless re- 
 corded in the office of the Collector of Customs 
 where such vessel is enrolled (R. S., Sec. 492). 
 
 By Section 4283, Revised Statutes, the liability 
 of an owner of any vessel for loss, injury, or de- 
 struction of property shipped in it is limited to the 
 amount of the value of the interest of such owner 
 in the vessel and her freight. The constitution- 
 ality of this enactment was upheld by the Supreme 
 Court, ■ even as applied to a vessel engaged in ply-? 
 
 1 Lord v. Steamship Co., 102 U. S., 541. 
 
196 The Changing Order 
 
 ing on the Pacific Ocean between two ports of the 
 State of California. 
 
 It seems strange, that although such comprehen- 
 sive control over interstate and foreign commerce 
 by water, including the regulation of the agencies 
 of such commerce, the citizenship of the owners 
 of such agencies, the method of transferring and 
 incumbering such ownership, and the limit of the 
 liability of the owners, had been exercised by 
 Congress from an early date, yet when a bill was 
 introduced in Congress in 1864 to declare the Rari- 
 tan Delaware Bay Railroad of New Jersey a law- 
 ful structure and a military and post road, so as 
 to enable it to compete for through traffic between 
 Philadelphia and New York with the Camden & 
 Amboy Railway monopoly, it was defeated. New 
 Jersey had in 1832 granted to the last-named com- 
 pany a monopoly in railroad construction and main- 
 tenance through that State, between New York 
 and Philadelphia, as complete as that which the 
 State of New York had granted to Robert Fulton 
 and Robert Livingston in steamboat traffic in the 
 waters of New York, which had been declared 
 contrary to the Federal Constitution in Gibbons 
 v. Ogden. Yet the bill in favor of breaking the 
 monopoly was successfully opposed upon the 
 ground that — 
 
 there is no warrant in the Constitution of the United 
 States that will allow Congress through her representa- 
 tives from other states of this Union to interfere with 
 
Federal Control of Stocks and Bonds 197 
 
 the local railway system of any individual State which 
 it has incorporated merely for the purpose of doing 
 business within its limits. 
 
 Nor were there wanting members of Congress to 
 contend that railroad transportation did not fall 
 under the term "commerce." The same opposi- 
 tion was successfully made to an effort to break 
 the Pennsylvania Railroad monopoly during the 
 following session, and not until June 15, 1866, was 
 the bill passed which gave to a railroad corporation 
 of one State the right to carry on interstate com- 
 merce in other States. 1 This act (14 Stats., 66) 
 is brief but comprehensive: 
 
 Whereas the Constitution of the United States con- 
 fers upon Congress, in express terms, the power to 
 regulate commerce among the several States, to estab- 
 lish post roads, and to raise and support armies: 
 Therefore : 
 
 Be it enacted by the Senate and House of Representa- 
 tives of the United States, etc., That every railroad 
 company in the United States, whose road is operated 
 by steam, its successors and assigns, be, and is hereby 
 authorized to carry upon and over its road, boats, 
 bridges, and ferries, all passengers, troops, govern- 
 ment supplies, mails, freight, and property on their 
 way from any State to another State, and to receive 
 compensation therefor, and to connect with roads of 
 other States so as to form continuous lines for the 
 transportation of the same to the place of destination. 
 
 1 See A Congressional History of Railways in the United States, 
 by Lewis H. Haney, vol. ii., pp. 214-230. 
 
198 The Changing Order 
 
 This law (subsequently carried into the Revised 
 Statutes as Section 5258) has been followed by a 
 large number of acts of Congress regulating inter- 
 state commerce in various particulars. Many of 
 those statutes are enumerated in Mr. Justice 
 Brewer's opinion in the Debs case, * and all opera- 
 tion by State railroad companies as agencies of 
 interstate commerce since 1866, has been carried 
 on under the authority granted by that act, and 
 the subsequent acts regulating interstate com- 
 merce. Obviously, as Mr. Justice Brewer said in 
 the Debs case: 
 
 these powers given to the national government over 
 interstate commerce and in respect to the transporta- 
 tion of the mails were not dormant and unused. Con- 
 gress had taken hold of these two matters, and by 
 various and specific acts had assumed and exercised 
 the powers given to it, and was in the full discharge 
 of its duty to regulate interstate commerce and carry 
 the mails. The validity of such exercise and the 
 exclusiveness of its control had been again and again 
 presented to this Court for consideration. It is 
 curious to note the fact that in a large proportion of 
 the cases in respect to interstate commerce brought 
 to this Court the question presented was of the validity 
 of State legislation in its bearings upon interstate 
 commerce, and the uniform course of decision has been 
 to declare that it is not within the competency of a 
 State to legislate in such a manner as to obstruct 
 interstate commerce. 
 
 1 In re Debs, 158 U. S., 564, 580. 
 
Federal Control of Stocks and Bonds 199 
 
 In the light of these authorities, it would seem 
 clear that the right of a corporation — certainly 
 of a railroad corporation — of one State to carry on 
 business in interstate commerce, depends upon the 
 will of Congress. 
 
 It is contended however that the right to carry 
 on commerce between the States is not one created 
 by the Federal Constitution, but a right which the 
 Constitution found in existence and which it gave 
 Congress power to regulate. This is perfectly true 
 as to individuals, but not as to corporations. 
 Until Congress legislated on the subject, the States, 
 under the rulings of the Supreme Court, enjoyed 
 in unrestrained right to legislate regarding the 
 instrumentalities of commerce. 
 
 For, as was pointed out in Louisville & Nash- 
 ville Railroad Co. v. Kentucky, " while the police 
 power of a State cannot be directly exercised by 
 imposing a restriction or burden upon commerce 
 itself, this is not true with respect to the instru- 
 ments of such commerce; and with respect to 
 legislation respecting the instrumentalities of 
 commerce it was said in Chicago, Milwaukee, etc.» 
 Railway Co. i>. Solan 2 : 
 
 So long as Congress has not legislated upon the 
 particular subject, they are rather to be regarded as 
 legislation in aid of such commerce, and as a rightful 
 exercise of the police power of the State to regulate the 
 relative rights and duties of all persons and corpora- 
 tions within its limits. 
 
 1 161 U. S., 677. ■ 69 U. S., 133. 
 
200 The Changing Order 
 
 In Sherlock et al v. Ailing, 1 Mr. Justice Field 
 said: 
 
 It is true that the commercial power conferred 
 by the Constitution is one without limitation. It 
 authorizes legislation with respect to all the subjects 
 of foreign and inter-State commerce, the persons en- 
 gaged in it, and the instruments by which it is carried 
 on. And legislation has largely dealt, so far as com- 
 merce by water is concerned, with the instruments of 
 that commerce. It has embraced the whole subject 
 of navigation, prescribed what shall constitute 
 American vessels, and by whom they shall be navi- 
 gated; how they shall be registered or enrolled and 
 licensed; to what tonnage, hospital, and other dues 
 they shall be subjected; what rules they shall obey 
 in passing each other ; and what provision their owners 
 shall make for the health, safety, and comfort of their 
 crews. Since steam has been applied to the propulsion 
 of vessels, legislation has embraced an infinite variety 
 of further details, to guard against accident and 
 consequent loss of life. 
 
 The power to prescribe these and similar regulations 
 necessarily involves the right to declare the liability 
 which shall follow their infraction. Whatever, there- 
 fore, Congress determines, either as to a regulation 
 or the liability for its infringement, is exclusive of 
 State authority. But with reference to a great variety 
 of matters touching the rights and liabilities of persons 
 engaged in commerce, either as owners or navigators 
 of vessels, the laws of Congress are silent, and the laws 
 of the State govern. 
 
 1 93 U. S., 99. 
 
Federal Control of Stocks and Bonds 201 
 
 It is recognized and implied in all of such state- 
 ments that when Congress does legislate on any 
 of these incidental subjects, "touching the rights 
 and liabilities of persons engaged in commerce" 
 its legislation becomes "the supreme law of the 
 land, anything in the constitution or laws of any 
 State notwithstanding." 
 
 So in Crutcher v. Kentucky, ' the Supreme Court 
 held an act of the Legislature of Kentucky requir- 
 ing the agent of a foreign express company to 
 take out a license on certain specified conditions 
 before carrying on express business between that 
 State and others, to be a regulation of interstate 
 commerce, and to that extent repugnant to the 
 Constitution. 
 
 Congress [said Mr. Justice Bradley] would un- 
 doubtedly have the right to exact from associations 
 of that kind any guarantees it might deem necessary 
 for the public security, and for the faithful transaction 
 of business; and as it is within the province of Con- 
 gress, it is to be presumed that Congress has done, or 
 will do, all that is necessary and proper in that regard. 
 
 To carry on interstate commerce is not a franchise or 
 a privilege granted by the State; it is a right which 
 every citizen of the United States is entitled to exercise 
 under the Constitution and laws of the United States; 
 and the accession of mere corporate facilities, as a 
 matter of convenience in carrying on their business, 
 cannot have the effect of depriving them of such right, 
 
 ■ 141 U. S., 47. 
 
202 The Changing Order 
 
 unless Congress should see fit to interpose some con- 
 trary regulation on the subject. 
 
 And [he adds] it has frequently been laid down by 
 this Court that the power of Congress over interstate 
 commerce is as absolute as it is over foreign com- 
 merce. 
 
 This statement of the law is cited with approval 
 in the prevailing opinion of the Supreme Court in the 
 recent cases of Western Union Telegraph Co. v. 
 Kansas, r and International Text-book Co. v. Pigg. 2 
 
 The right of a corporation organized under the 
 laws of any State to engage in interstate commerce 
 therefore depends, first, upon the powers given to 
 it by the State of its creation, and second, upon 
 the will of Congress. In the absence of any expres- 
 sion by Congress of that will, it may conduct its 
 business in a State other than that of its creation, 
 in accordance with the comity extended to foreign 
 corporations of its class by such State, either 
 impliedly or by express legislation; and if there 
 be such legislation, then on compliance with its 
 requirements, provided such requirements do not 
 amount to creating a burden upon interstate 
 commerce, or conflict with any Federal regulation 
 of interstate commerce, or other rights secured by 
 the Federal Constitution. 
 
 The authorities on the subject of the right of 
 corporations to carry on business outside of the 
 State creating them, without interference from 
 State authorities, have been the subject of too much 
 
 x 2i6 U. S., i, 19. 3 2i7 U. S., 91, 108. 
 
Federal Control of Stocks and Bonds 203 
 
 well-known discussion to need more than passing 
 reference here to the decision in Bank of Augusta 
 v. Earle, 1 and the very recent cases of Western 
 Union Telegraph Co. v. Kansas, 2 Pullman Car Co. 
 v. Kansas, 3 and International Text-book Co. v. 
 
 Pigg.4 
 
 In Paul v. Virginia 5 where the power of a State 
 to exclude foreign insurance companies from doing 
 business within its limits, except upon conditions 
 prescribed by it, was under discussion, the Court 
 said: 
 
 It is undoubtedly true, as stated by counsel, that the 
 power conferred upon Congress to regulate commerce 
 includes as well commerce carried on by corporations 
 as commerce carried on by individuals. 
 
 This state of facts forbids the supposition that it 
 was intended in the grant of power to Congress to 
 exclude from its control the commerce of corporations. 
 The language of the grant makes no reference to the 
 instrumentalities by which commerce may be carried 
 on; it is general, and includes alike commerce by 
 individuals, partnerships, associations and corpora- 
 tions. 
 
 But in that case it was held that issuing a policy 
 of insurance was not a transaction of commerce, 
 and that such contracts were not articles of com- 
 merce in the proper meaning of the word, although 
 
 1 13 Peters, 519, 589. 3 2i6 U. S., 1. 
 
 »2i6 U. S., 56. 4217 U. S., 91. «8 Wall., 168. 
 
204 The Changing Order 
 
 the parties to such contracts were domiciled in 
 different States. These paragraphs from the 
 opinion in Paul v. Virginia were cited with ap- 
 proval in Western Union Telegraph Co. v. Kansas. r 
 
 The control of Congress being therefore sover- 
 eign and plenary over commerce among the States, 
 and the instrumentalities of such commerce, its 
 power to create national corporations to conduct 
 such commerce being established, its right to 
 prohibit such commerce when essential to the 
 public welfare being adjudged, even to the extent 
 of forbidding a State railroad corporation to carry- 
 in interstate commerce a commodity in which 
 it has any legal interest, direct or indirect, al- 
 though the effect of such prohibition would be 
 substantially to render buying and selling by an 
 interstate carrier of a commodity which it trans- 
 ports practically impossible; how can it be doubted 
 that Congress might repeal the act of 1866 and 
 forbid any railroad company to transport goods 
 in interstate commerce unless incorporated by 
 Congress? 
 
 But Congress has not seen fit to legislate in 
 that way. While in certain cases creating cor- 
 porations to build and operate railroads and 
 bridges, it has in general specifically empowered 
 corporations of States to transport passengers 
 and property in interstate commerce subject to 
 rules and regulations which it has from time to 
 time prescribed. 
 
 '216 U. S., 134. 
 
Federal Control of Stocks and Bonds 205 
 
 In Cherokee Nation v. Kansas Railway Co., 1 it 
 was expressly held that in the execution of the 
 power to regulate commerce, Congress may employ 
 as instrumentalities corporations created by it or 
 by the States. 
 
 Congress had granted to the defendant in that 
 case, a corporation organized under the laws of 
 Kansas, the right to construct a railroad through 
 the Indian territory. Justice Harlan, writing the 
 opinion of the Court, said: 
 
 It is true that the company authorized to construct 
 and maintain is a corporation created by the laws of a 
 State, but it is none the less a fit instrumentality to 
 accomplish the public objects contemplated by the 
 Act of 1 884. Other means might have been employed, 
 but those designated in that act, although not indis- 
 pensably necessary to accomplish the end in view, are 
 appropriate and conducive to that end, and therefore 
 within the power of Congress to adopt. The question 
 is no longer an open one, as to whether a railroad is a 
 public highway, established primarily for the conven- 
 ience of the people, and to subserve public ends, and, 
 therefore, subject to governmental control and regula- 
 tion. 
 
 A State corporation availing of the powers con- 
 ferred by acts of Congress becomes thereby sub- 
 ject, in those respects in which Congress has 
 legislated, to all the conditions and limitations im- 
 posed by Congress on the exercise of those pow- 
 
 • 135 U. S., 641, 657. 
 
206 The Changing Order 
 
 ers, as completely as though they were written 
 into the charter of such corporation. 
 
 This was made clear in Hale z>. Henkel, x where 
 the right of an officer or employee of a State 
 corporation, summoned before a grand jury as 
 a witness, to refuse to produce the books and docu- 
 ments of such corporation, upon the ground that 
 they would tend to incriminate the corporation 
 itself, was under discussion. The Court discrim- 
 inated between the rights of the witness, as an 
 individual, and the rights of the corporation, a 
 mere creature of the State, presumed to be in- 
 corporated for the benefit of the public, receiving 
 certain privileges and franchises and holding them 
 subject to the laws of the State and the limitations 
 of its charter; and held, that while an individual 
 might lawfully refuse to answer incriminating ques- 
 tions, unless protected by a statute, it did not follow 
 that a corporation vested with special privileges 
 and franchises could refuse to show its hand when 
 charged with an abuse of such privileges. So far as 
 the right of such corporation to carry on interstate 
 commerce was involved, the Court treated that as 
 a franchise derived from the Federal government 
 which entailed a corresponding responsibility to it. 
 
 Mr. Justice Brown, writing the opinion of the 
 Court, said: 
 
 It is true that the corporation in this case was 
 chartered under the laws of New Jersey, and that it 
 
 " 201 U. S., 43. 
 
Federal Control of Stocks and Bonds 207 
 
 receives its franchise from the legislature of that State; 
 but such franchises, so far as they involve questions 
 of interstate commerce, must also be exercised in 
 subordination to the power of Congress to regulate 
 such commerce, and in respect to this, the General 
 Government may also assert a sovereign authority to 
 ascertain whether such franchises have been exercised 
 in a lawful manner, with a due regard to its own laws. 
 Being subject to this dual sovereignty, the General 
 Government possesses the same right to see that its 
 own laws are respected as the State would have with 
 respect to the special franchises vested in it by the 
 laws of the State. The powers of the General Govern- 
 ment in this particular in the vindication of its own laws, 
 are the same as if the corporation had been created by an 
 act of Congress. 
 
 In the light of these authorities, it may be confi- 
 dently asserted that while Congress may itself 
 create corporations for the purpose of carrying 
 on interstate commerce, it may also prescribe rules 
 and regulations under which a corporation created 
 by the laws of a State may conduct such commerce, 
 and that when it does so, such State corporation 
 may only engage in such commerce upon conformity 
 with the rules and regulations so laid down by 
 Congress; and these rules may have reference, 
 to use the language of Justice Johnson in Gibbons 
 v. Ogden, not only to the exchange of goods and 
 commodities, but to the subject, the vehicle, and 
 the agent of such commerce, and their various 
 operations. 
 
 Now, economists and courts alike have con- 
 
208 The Changing Order 
 
 demned the reckless issue of stock and bonds by 
 railroad companies without adequate considera- 
 tion, which has come to be generally regarded as 
 an evil, certainly as demoralizing in its effect upon 
 the public as the carriage of lottery tickets from 
 one State to another. The twenty years period of 
 railroad receiverships and foreclosures, the records 
 of which fill many volumes of reports of decisions 
 of the Federal courts, testifies eloquently to the 
 practical effect of such unwarranted issues of se- 
 curities upon the ability of railroad companies to 
 properly perform their functions as instrumentali- 
 ties of interstate commerce; while the utterance 
 of stock for inadequate or fictitious considera- 
 tion, has furnished the opportunity for the most 
 irresponsible and speculative control of these 
 highways of commerce, and has resulted in the 
 injury which always follows a control of property 
 by those who have no real investment in it. Such 
 control, all experience demonstrates, will not 
 generally be exercised in the interest of the road, 
 and in such manner as to insure the safe, conserva- 
 tive management necessary to meet the require- 
 ments of the public and the proper discharge of the 
 obligations imposed upon the carrier by law. On 
 the contrary, it is almost inevitable that such con- 
 trol be employed for purely speculative purposes 
 and to secure immediate profit to those in tem- 
 porary control. It is this public aspect which lends 
 force to the conviction that "watered" and 
 "bonus stock" is one of the greatest abuses con- 
 
Federal Control of Stocks and Bonds 209 
 
 nected with the management of corporations 1 ; 
 and it is this effect upon the fitness of the carriers 
 to perform their duties under national legislation 
 which is relied upon to require and justify Federal 
 supervision and control of the subject. 
 
 Of course, the Federal government cannot con- 
 fer upon a State corporation power to borrow 
 money and issue obligations therefor, nor to 
 create and issue shares of stock. Only the power 
 which erected the corporation can vest it with 
 authority for those purposes. But under all the 
 rules and analogies, to which reference has been 
 made, Congress assuredly may regulate and re- 
 strain the State corporation in the exercise of these, 
 as well as of other, corporate powers, and may 
 prohibit it from issuing obligations or stock for 
 any purpose relating to interstate or foreign 
 commerce, except in accordance with rules and 
 restrictions prescribed by it for the purpose of 
 preventing the evils above referred to. In that 
 respect, the national government, having adopted 
 the State corporation as an agency of interstate 
 commerce, may subject it to the same regulations 
 with respect to the means of raising money for the 
 purpose of carrying on such commerce, as it could 
 impose upon a corporation of its own creation. 
 The end is legitimate, viz., the regulation of 
 interstate commerce; it is within the scope of the 
 Constitution. The means suggested are appro- 
 
 1 Mitchell, J., in Hospes v. N. W. Mfg. & Car Co., 48 Minn., 
 174, 196; see also Handley v. Stutz, 139 U. S., 147-28. 
 
210 The Changing Order 
 
 priate to correct an evil which has had in the past 
 a very real effect upon the ability of these instru- 
 mentalities to carry on commerce among the States 
 in conformity with rules and regulations constitu- 
 tionally established by Congress; and the means 
 are plainly adapted to that end. On reason, and 
 on authority, therefore, such legislation is within 
 the scope of the constitutional power of Congress. 
 
 Again, the amount of stock which a carrier cor- 
 poration may issue, and the extent of the obligations 
 which it may incur, have a direct effect upon the 
 determination of the reasonableness of rates of 
 interstate transportation. 
 
 It is a principle of the common law that a com- 
 mon carrier must charge reasonable rates for his 
 services, and this is now the express mandate of 
 the Federal statute under which the power of 
 fixing the maximum rate to be charged is devolved 
 upon the Interstate Commerce Commission. It 
 is, however, well settled that in the exercise of this 
 power — as in the exercise of similar powers con- 
 ferred by State laws upon the State commissions — 
 the carrier may not be deprived of a reasonable 
 return upon its invested capital, because this 
 would be, in effect, the confiscation of private 
 property for public use ; or, in case of State action, 
 would tend to deprive the corporation — a person 
 within the meaning of the Fourteenth Amend- 
 ment — of property without due process of law. 1 
 
 1 Railroad Commission cases, 116 U. S. f 307; Smyth v. Ames, 
 169 U. S., 466, 522. 
 
Federal Control of Stocks and Bonds 211 
 
 In Chicago, Milwaukee, & St. Paul Railway 
 Company v. Minnesota 1 the Court said: 
 
 If the company is deprived of the power of charging 
 reasonable rates for the use of its property, and such 
 deprivation takes place in the absence of an investiga- 
 tion by judicial machinery, it is deprived of the lawful 
 use of its property, and thus, in substance and effect, 
 of the property itself, without due process of law and 
 in violation of the Constitution of the United States; 
 and in so far as it is thus deprived, while other persons 
 are permitted to receive reasonable profits upon their 
 invested capital, the company is deprived of the equal 
 protection of the laws. 
 
 In Reagan v. Farmers Loan & Trust Company, a 
 which involved the question of the validity of 
 railroad rates established by the State Board of 
 Railroad Commissioners in Texas, the Court, in 
 determining the question whether or not the rates 
 prescribed were so unjust and unreasonable as to 
 work a practical destruction to rights of property 
 of the company affected thereby, entered upon an 
 examination of the amount of stocks and bonds 
 of the company outstanding which "were issued 
 for and represent value." As a result of such 
 inquiry, the Court found that the rates were "not 
 sufficient to enable the company to pay all the 
 interest on the bonds;" that the bonds and stock 
 outstanding represented money invested in the 
 construction of this road; 
 
 * 134 U. S., 418. » 154 u. S., 362. 
 
212 The Changing Order 
 
 that the owners of the stock have never received a 
 dollar's worth of dividends in return for their invest- 
 ment. The road was thrown into the hands of a 
 receiver for default in payment of the interest on the 
 bonds. The earnings for the last three years prior 
 to the establishment of these rates were insufficient 
 to pay the operating expenses and the interest on the 
 bonds . . . 
 
 and that the operation of the tariff sought to be 
 enjoined so reduced the receipts as to be unjust and 
 unreasonable. The defendants therefore were en- 
 joined from enforcing the rates established by them. 
 In Smyth v. Ames 1 the Court in determining 
 the validity of rates prescribed by the Railroad 
 Commission of the State of Nebraska, said: 
 
 If a railroad corporation has bonded its property 
 for an amount that exceeds its fair value, or if its 
 capitalization is largely fictitious, it may not impose 
 upon the public the burden of such increased rates 
 as may be required for the purpose of realizing profits 
 upon such excessive valuation or fictitious capitaliza- 
 tion; and the apparent value of the property and 
 franchises used by the corporation, as represented by 
 its stocks, bonds and obligations, is not alone to be 
 considered when determining the rates that may be 
 reasonably charged. 
 
 Again: 
 
 We hold, however, that the basis of all calculations 
 as to the reasonableness of rates to be charged by a 
 
 1 169 U. S., 466. 
 
Federal Control of Stocks and Bonds 213 
 
 corporation maintaining a highway under legislative 
 sanction must be the fair value of the property being 
 used by it for the convenience of the public. And in 
 order to ascertain that value, the original cost of 
 construction, the amount expended in permanent 
 improvements, the amount and market value of its 
 bonds and stock, the present as compared with the 
 original cost of construction, the probable earning 
 capacity of the property under particular rates pre- 
 scribed by statute, and the sum required to meet 
 operating expenses, are all matters for consideration, 
 and are to be given such weight as may be just and 
 right in each case. 
 
 This necessarily elaborate and tedious inquiry 
 concerning the consideration for outstanding bonds 
 and stock, which is always a subject pressed for 
 consideration in such cases, would be entirely 
 obviated, and the work of the Interstate Commerce 
 Commission greatly facilitated, if before stock 
 and bonds were issued the consideration were 
 ascertained by the Commission to be full and 
 adequate. 
 
 In Knoxville v. Water Company, 1 in determining 
 the validity of an ordinance of a city fixing the 
 maximum rates to be charged for water by the 
 defendant company, counsel for the company 
 urged "rather faintly," says Justice Moody in 
 writing the opinion, that the capitalization of the 
 company ought to have some influence in the case 
 in determining the value of the property. But the 
 
 «2I2U. S., I. 
 
214 The Changing Order 
 
 Court said that it was a sufficient answer to the 
 contention — 
 
 that the capitalization is shown to be considerably in 
 excess of any valuation testified to by any witness, or 
 which can be arrived at by any process of reasoning. 
 The cause for the large variation between the real 
 value of the property and the capitalization in bonds 
 and preferred common stock is apparent from the 
 testimony. All, or substantially all, the preferred 
 and common stock was issued to contractors for the 
 construction of the plant, and the nominal amount 
 of the stock issued was greatly in excess of the true 
 value of the property furnished by the contractors. 
 
 The fact is, that while the amount of the issued 
 stock and bonds is not controlling upon the Court 
 in determining the effect of the establishment of 
 rates by a body delegated with legislative power 
 over the subject, yet it is always a factor of greater 
 or less importance, and is always the subject of 
 inquiry when the reasonableness of an order relat- 
 ing to rates is under consideration. 
 
 The enactment of a law regulating the issue of 
 stocks and bonds by railroad companies is not 
 nearly so radical a step as was the enactment of 
 the permissive act of 1866, or the Interstate Com- 
 merce Act of 1887. It certainly goes no further 
 than the acts regulating the ownership and devo- 
 lution of interests in ships employed in interstate or 
 foreign commerce, and involves no principle so 
 new and startling as the acts regulating the hours 
 
Federal Control of Stocks and Bonds 215 
 
 of labor of employees, the relations between the 
 railroad companies and their employees, or of the 
 act of Congress prohibiting a railroad company 
 to carry from one State to another pursuant to 
 power vested in it by the State of its creation, a 
 commodity which it has produced and owns. 
 
 The growing strength of the National Government 
 in the United States [says Mr. Bryce] is largely due to 
 sentimental forces that were weak a century ago, and 
 to a development of internal communications which 
 was then undreamt of. * 
 
 In the debates in 1865 over the bill to authorize 
 the Cleveland and Mahoning Railroad Co., an 
 Ohio corporation, to construct its railroad from the 
 village of Youngstown, Ohio, to and into the State 
 of Pennsylvania to the city of Pittsburg, to estab- 
 lish it as a military, postal, and commercial railway 
 of the United States, and to guarantee its rights, 
 Representative Bland argued against the measure 
 lest it should prove a stepping-stone to the 
 formation of great congressional corporations, 
 strike down the rights of the States, and be the 
 entering wedge of centralized government. Sim- 
 ilar opposition has been made to every progressive 
 measure of commerce regulation. But the cen- 
 tralizing tendency steadily has gone on, and the 
 control of Congress over interstate railroad com- 
 panies has been exercised in an increasingly 
 comprehensive manner. Such progress is insep- 
 
 x The American Commonwealth, i., p. 358, 3d ed. 
 
216 The Changing Order 
 
 arable from growth. The great arteries of com- 
 munication between different parts of the country 
 and the instrumentalities which control their 
 operation can only be properly regulated in the 
 public interest by the central national power; 
 a power which is sovereign, which is exclusive 
 when exercised ; and which should be exercised to 
 correct every evil of a public character which 
 experience demonstrates to be susceptible of cor- 
 rection only by national legislation. 
 
XII 
 
 NEW STATES AND CONSTITUTIONS 1 
 
 CURRENT discussion in and out of Congress 
 concerning the admission as States of the 
 Territories of Arizona and New Mexico has taken 
 a wide range, and has involved much debate 
 concerning the nature and effect of many of the 
 provisions contained in the constitutions proposed 
 by the new States respectively, not only as applic- 
 able to them, but as institutional features which 
 may be applied to other communities. 
 
 That a frequent recurrence to fundamental 
 principles is necessary to preserve the blessings 
 of liberty and keep government free, is recognized 
 and declared in the constitutions of more than 
 one of the States. 2 
 
 It is a fortunate circumstance, therefore, that 
 the nature of these proposed constitutions should 
 have been so prominently brought before the 
 
 1 Address before the Law School of Yale University, June 19, 
 1911. 
 
 a See, e. g. t constitution of Vermont, 1777, Chap. I., par. XVI.; 
 Virginia Bill of Rights, 1776, Sec. 15; New Hampshire consti- 
 tution of 1792, Parti., Art. 38; Pennsylvania constitution of 
 1776, Declaration of Rights, Sec. XIV. 
 
 217 
 
2i 8 The Changing Order 
 
 people as to provoke discussion, not only of their 
 provisions, but of the fundamental principles 
 upon which our system of government is founded 
 and maintained, and of the nature and effect upon 
 them of the conceptions underlying the organiza- 
 tion of one at least of these proposed new States, 
 and which, to a certain extent, already have been 
 adopted in some of the admitted States. * 
 
 While a free, enterprising, and progressive people 
 will not reject improvements simply because they 
 are new or untried, yet thoughtful Americans 
 must ever consider any radical changes proposed 
 in their government, state or national, in the 
 light of Washington's warning to resist with care 
 the spirit of innovation upon the principles of the 
 institutions established by the Constitution of the 
 United States, lest alterations in the forms of our 
 fundamental structures of government "impair 
 the energy of the system and undermine what 
 cannot be directly overthrown." 
 
 The Constitution of the United States estab- 
 lished a union of thirteen States, each of which had 
 been separately organized under a government 
 republican in form; that is to say, a government 
 in which it was recognized that the ultimate 
 sovereignty resided in the adult male people — with 
 some exceptions, differing in different States, de- 
 pendent upon color, race, condition of servitude, 
 or property qualifications. This sovereignty was 
 
 1 Constitution of Michigan, 1909, Art. XVII; Constitution of 
 Oklahoma, Art V.; Oregon, Laws of 1903, p. 244. 
 
New States and Constitutions 219 
 
 exercised by means of a general scheme of govern- 
 ment under which (1) a constitution or funda- 
 mental law was formulated by delegates chosen 
 from among the qualified voters, in some cases 
 empowered to ordain and establish the constitu- 
 tion as binding upon all the people, and in others 
 merely to submit it, when formulated, for popular 
 approval, under conditions making the same bind- 
 ing upon all, if affirmatively approved by the votes 
 of a specified percentage of the qualified male 
 voters ; and (2) within the limitations prescribed in 
 such constitutions, laws were made by representa- 
 tives periodically chosen for such purpose, generally 
 distributed between two legislative bodies having 
 different tenures and qualifications; all laws to be 
 executed by governors and other executive officials 
 chosen for limited periods by popular vote, or 
 appointed by those so chosen ; the laws to be inter- 
 preted and applied by judges, generally appointed 
 to hold office during good behavior, but subject 
 to removal on joint address of both branches of the 
 legislature, or in proceedings for impeachment. 
 
 Differing in many details, the governments of 
 all the thirteen States in their general outlines were 
 conformable to the foregoing description, and 
 were all denominated republican. 
 
 The Constitution provided in Section 3 of Article 
 IV.: 
 
 New States may be admitted by the Congress into 
 this Union; but no new States shall be formed or 
 
220 The Changing Order 
 
 erected within the jurisdiction of any other State; 
 nor any State be formed by the junction of two or more 
 States, or parts of States, without the consent of the 
 Legislatures of the States concerned, as well as of the 
 Congress. 
 
 By Section 4: 
 
 The United States shall guarantee to every State 
 in this Union a republican form of government, and 
 shall protect each of them against invasion; and on 
 application of the Legislature, or of the Executive 
 (when the Legislature cannot be convened), against 
 domestic violence. 
 
 The general purpose of the provisions in Section 
 4 was indicated in the debate over them in the 
 Constitutional Convention. Mr. Randolph said 
 they had two objects: (1) to secure republican 
 government, (2) to suppress domestic commotions. 
 He urged the necessity of both these provisions. 
 Mr. Madison moved to substitute "that the 
 Constitutional authority of the States shall be 
 guaranteed to them respectively agst. domestic 
 as well as foreign violence." But other delegates 
 objected to this as perpetuating the existing con- 
 stitutions of the States, some of which Mr. Houston 
 thought were very bad and ought to be revised and 
 amended. In reply to a suggestion that the 
 States should be left to suppress their own rebel- 
 lions, Mr. Gorham thought it would be very 
 strange were a rebellion known to exist and the 
 general government restrained from subduing it. 
 
New States and Constitutions 221 
 
 At this rate [he said], an enterprising Citizen might 
 erect the standard of Monarchy in a particular State, 
 might gather together partizans from all quarters, 
 might extend his views from State to State, and 
 threaten to establish a tyranny over the whole, & 
 the Genl. Govt, be compelled to remain an inactive 
 witness of its own destruction. With regard to 
 different parties in a State [he humorously added], as 
 long as they confine their disputes to words they will 
 be harmless to the Genl. Govt. & to each other. 1 
 
 Chief Justice Taney, in delivering the opinion 
 in Luther v. Borden, 2 said that under the above 
 quoted provision of the Constitution — 
 
 it rests with Congress to decide what government is 
 the established one in a State. For as the United 
 States guarantee to each State a republican govern- 
 ment, Congress must necessarily decide what govern- 
 ment is established in the State before it can determine 
 whether it is republican or not. And when the sena- 
 tors and representatives of a State are admitted 
 into the councils of the Union, the authority of the 
 government under which they are appointed, as well 
 as its republican character, is recognized by the proper 
 constitutional authority. And its decision is binding 
 on every other department of the government, and 
 could not be questioned in a judicial tribunal. 
 
 "The guaranty," said Chief Justice Waite in a 
 later case 3 — 
 
 1 Records of the Federal Convention, Farrand, vol. ii., p. 48. 
 
 2 7 Howard, 1-42. 
 
 3 Minor v. Happersett, 21 Wall., 162, 175. 
 
222 The Changing Order 
 
 is of a republican form of government. No particular 
 government is designated as republican, neither is the 
 exact form to be guaranteed, in any manner especially 
 designated. Here, as in other parts of the instrument, 
 we are compelled to resort elsewhere to ascertain 
 what was intended. 
 
 The guaranty necessarily implies a duty on the part 
 of the States themselves to provide such a govern- 
 ment. All the States had governments when the 
 Constitution was adopted. In all, the people partici- 
 pated to some extent, through their representatives, 
 elected in the manner specially provided. These 
 governments the Constitution did not change. They 
 were accepted precisely as they were, and it is, there- 
 fore, to be presumed that they were such as it was the 
 duty of the States to provide. Thus we have unmistak- 
 able evidence of what was republican in form, within the 
 meaning of that term as employed in the Constitution. 
 
 The general scheme of government running 
 through the constitutions of all the eleven States 
 which had adopted constitutions at the time of the 
 adoption of the Federal Constitution, the salient 
 outlines of which have been indicated, and even 
 that embodied in or established under the char- 
 ters of Connecticut and Rhode Island, constituted 
 the American system of republican government 
 which Chief Justice Fuller in In Re Duncan 1 
 said was that whose distinguishing feature — 
 
 is the right of the people to choose their own officers 
 for governmental administration and pass their own 
 
 1 139 U. S., 449, 461. 
 
New States and Constitutions 223 
 
 laws in virtue of the legislative power reposed in 
 representative bodies, whose legitimate acts may be 
 said to be those of the people themselves. 
 
 The nature of the governments established in 
 the States is therefore a matter of necessary con- 
 cern to Congress, for it must guarantee to each 
 State a republican form of government, and as 
 the national government must also protect every 
 State against domestic violence, common prudence 
 requires a careful scrutiny of the qualifications of 
 a new applicant for admission to the family of 
 States, in order to determine whether or not its elec- 
 torate is properly qualified to maintain stable and 
 peaceable conditions under the particular form of 
 republican government which it proposes to adopt. 
 
 The Council of Safety, meeting at Halifax, 
 North Carolina, on August 9, 1776, recommended 
 to the people of that "now Independent State" 
 the election of delegates to represent them in 
 Congress, and that the greatest attention be paid 
 to such election, particularly in view of this impor- 
 tant consideration: 
 
 That it will be the Business of the Delegates then 
 Chosen not only to make Laws for the good govern- 
 ment of, but also to form a constitution for, this 
 State; that this last, as it is the Corner Stone of all 
 Law, so it ought to be fixed and Permanent, and that 
 according as it is well or ill Ordered, it must tend in 
 the first degree to promote the happiness or Misery 
 of the State. 1 
 
 1 Lobingier, The People's Law, p. 152. 
 
224 The Changing Order 
 
 Among the principles which the political expe- 
 rience of the colonists had supplied was "the idea 
 of a constitution superior to legislative enact- 
 ments, and of certain natural rights secured by 
 such a constitution/* 1 
 
 " Unquestionably/ ' says Professor George El- 
 liott Howard in his introduction to Judge Lobin- 
 gier's interesting work entitled The People's Law, 
 or Popular Participation in Law-Making, — "Un- 
 questionably the American people have made three 
 great contributions to the political organism and 
 to political science : the constitutional convention, 
 the written constitution, and constitutional law. " 
 He further points out that while each of these 
 institutions has an earlier history more or less 
 distinct, yet that 
 
 as a distinct political organ, with a special function to 
 perform — an organ to be compared to a court, an 
 executive, or a legislature — the constitutional con- 
 vention was born and developed in America. As a 
 representative body, created according to definite 
 principles to discharge a single special function, that 
 of enacting organic as opposed to mere statute law, 
 it first made its appearance, fully differentiated, in 
 the Massachusetts convention of 1780 (the type of 
 subsequent state constitutional conventions) and in 
 the national convention of 1787. Since then it has 
 gained its own law and its own literature, and it has 
 taken its proper place in the Staatsrecht of the world. 
 
 1 Dodd, The Revision and Amendment of State Constitutions, 
 p. 2. 
 
New States and Constitutions 225 
 
 In like manner, he says, while in English and 
 Colonial history there were forerunners of consti- 
 tutions — 
 
 Nevertheless, the written constitution as an actuality, 
 as a recognized and permanent form of organic law, is 
 essentially the product of American political evolution. 
 
 Hence Professor Stimson says: 
 
 The Constitution is the permanent will of the 
 people ; a law is but the temporary act of their repre- 
 sentatives, who have only such power as the people 
 choose to give them. 1 
 
 It was in the light of these principles that the 
 constitution of Massachusetts was framed in 1780 
 — that constitution which has been described as 
 4 'the most perfect expression of the American the- 
 ory as understood at the close of the Revolution,' ' 
 and which has not only remained as the funda- 
 mental law of the great Commonwealth of Massa- 
 chusetts to this day, but which has also served 
 as a model for many others. It has called forth 
 the highest encomiums from even the advocates 
 of latter-day democracy 2 and must ever remain 
 a monument to the patriotism, sagacity, and states- 
 manship of the illustrious men who framed it. 
 
 With even greater patience, skill, and foresight 
 the delegates to the National Convention of 1787 
 wrought out a Constitution for the union of States. 
 
 1 The American Constitution p. 7. 
 a See Lobingier, pp. 171, 177-9. 
 15 
 
226 The Changing Order 
 
 They sought to construct a fundamental law for the 
 Union with the same view to permanence and stabil- 
 ity as that with which the Massachusetts constitu- 
 tion was framed ; in order to secure the blessings of 
 liberty and good government , not only to themselves, 
 but to their posterity. Justice Story said of it: 
 
 The constitution unavoidably deals in general lan- 
 guage. It did not suit the purposes of the people, in 
 framing this great charter of our liberties, to provide 
 for minute specifications of its powers, or to declare 
 the means by which those powers should be carried 
 into execution. It was foreseen that this would be 
 a perilous and difficult, if not an impracticable, task. 
 The instrument was not intended to provide merely 
 for the exigencies of a few years, but was to endure 
 through a long lapse of ages, the events of which were 
 locked up in the inscrutable purposes of Providence. 
 It could not be foreseen, what new changes and 
 modifications of power might be indispensable to 
 effectuate the general objects of the charter; and 
 restrictions and specifications, which, at the present, 
 might seem salutary, might, in the end, prove the 
 overthrow of the system itself. Hence, its powers 
 are expressed in general terms, leaving to the legis- 
 lature, from time to time, to adopt its own means to 
 effectuate legitimate objects, and to mould and model 
 the exercise of its powers, as its own wisdom, and the 
 public interests should require. « 
 
 In providing in the Constitution for the admis- 
 sion of new States, it was specified that they might 
 
 1 Martin v. Hunter, I Wheat., 304-26. 
 
New States and Constitutions 227 
 
 be admitted as States "into this Union." There 
 was to be no discrimination between them and the 
 original thirteen States. This was the deliberate 
 conclusion of the Convention. Various proposi- 
 tions looking to a different result were submitted. s 
 Gouverneur Morris suggested that "the rule of 
 representation ought to be so fixed as to secure to 
 the Atlantic States a prevalence in the national 
 councils. " Elbridge Gerry expressed a like view. 2 
 It was proposed by another to apportion represen- 
 tation among the States "upon the principles of 
 their wealth and number of inhabitants." But 
 the contrary view prevailed. 
 
 What Congress understood this constitutional 
 provision to mean, was shown when Vermont and 
 Kentucky, the first two States to be admitted, were, 
 by acts of Congress passed respectively March 4, 
 1 79 1, and June 1, 1792, each, "received and 
 admitted into this Union as a new and entire 
 member of the United States of America.' ' 
 Tennessee was admitted in 1796 as "one of the 
 United States of America," "on an equal footing 
 with the original States in all respects whatso- 
 ever;" and substantially the same language was 
 employed with respect to all the States subse- 
 quently admitted. 
 
 It is the almost universal judgment of our people 
 that the convention decided wisely in providing 
 for the admission of States without discrimination 
 
 1 Elliott's Debates, vol. v., pp. 155-6, 128, 228. 
 3 Ibid., pp. 279, 310. 
 
228 The Changing Order 
 
 between the original and the later ones, but it is 
 interesting to note in passing that the fundamental 
 laws for the creation of the three other great 
 federations of English-speaking states — those of 
 British North America, Australasia, and South 
 Africa — all contain provisions authorizing the 
 federal parliament to admit new states upon such 
 conditions as it may deem expedient to impose, and 
 to discriminate as between the original members 
 of the union and those subsequently admitted. ' 
 
 No uniformity of procedure to be observed in 
 the admission of States was established by the 
 Constitution, nor has resulted from common prac- 
 tice. A constitution was adopted by the Legisla- 
 
 1 Commonwealth of Australia Constitution Act, July 9, 1900, 
 Chap. VI.— 
 
 "121. The Parliament may admit to the Commonwealth 
 or establish new States, and may upon such admission or 
 establishment make or impose such terms and conditions, 
 including the extent of representation in either House of 
 Parliament, as it thinks fit." 
 
 Modern Constitutions, by W. F. Dodd, vol. i., p. 65. The 
 Constitution of Australia, by W. H. Moore, Melbourne, 1910. 
 
 The British North America Act (March 29, 1867), Section 
 146 — 
 
 " . . .on such terms and conditions in each case as 
 are in the addresses expressed and as the queen thinks fit to 
 approve, subject to the provisions of this act." 
 
 The British North America Act, 1871. The British North 
 America Act, 1886. Modern Constitutions, pp. 220, 221, 224. 
 
 South Africa Act, 1909, Sees. 149-150 — "on such terms 
 and conditions as to representation and otherwise in each case 
 as are expressed in the addresses and approved by the King. 
 ..." Brand, The Union of South Africa, Oxford, 1909. 
 
New States and Constitutions 229 
 
 ture of Vermont in March, 1787, which, after 
 reciting that — 
 
 it is absolutely necessary, for the welfare and safety 
 of the inhabitants of this State, that it should be 
 henceforth a free and independent State, and that a 
 just, permanent, and proper form of government 
 should exist in it, derived from and founded on the 
 authority of the people only, agreeable to the direction 
 of the honourable American Congress, 
 
 declared that — 
 
 We, the Representatives of the freemen of Vermont, 
 in General Convention met, ... do, by virtue of 
 authority vested in us by our constituents, ordain, 
 declare and establish the following Declaration of 
 Rights and Frame of Government, to be the Constitu- 
 tion of this Commonwealth, and to remain in force 
 therein forever unaltered, except in such articles as 
 shall hereafter on experience be found to require 
 improvement, and which shall, by the same authority 
 of the people, fairly delegated, as this Frame of 
 Government directs, be amended or improved, for the 
 more effectual obtaining and securing the great end 
 and design of all government hereinbefore men- 
 tioned. 1 
 
 The act of Congress approved February 18, 
 1 79 1, merely recites that the State of Vermont has 
 petitioned Congress "to be admitted a member 
 of the United States," and enacts that on 
 March 4, 1791, the said State "be received and 
 
 1 Thorpe's American Charters, etc., vol. vi., p. 3751. 
 
230 The Changing Order 
 
 admitted into this Union as a new and entire 
 member of the United States of America." 
 
 The act admitting Kentucky into the Union, 
 passed February 4, 1791, 1 recited that the Com- 
 monwealth of Virginia had consented that the 
 District of Kentucky, within its jurisdiction, 
 should be formed into a new State, and that a con- 
 vention of delegates, chosen by the people of the 
 district, had petitioned Congress to consent, and 
 it was thereupon enacted that the said district 
 be formed into a new State, separate from and 
 independent of Virginia, and be received and 
 admitted into the Union "as a new and entire 
 member of the United States of America." 
 
 The act of June 1, 1796, declared that 
 
 The whole of the territory ceded to the United 
 States by the State of North Carolina shall be one 
 State, and the same is hereby declared to be one of the 
 United States of America, on an equal footing with the 
 original States in all respects whatever, by the name 
 and title of the State of Tennessee. 2 
 
 A constitution had been adopted for that State 
 in February, 1796, but no reference to it is con- 
 tained in the act admitting the State into the 
 Union. 
 
 The first enabling act of Congress, or act specifi- 
 cally authorizing the inhabitants of a portion of 
 territory to form for themselves a constitution and 
 State government upon which to be admitted into 
 
 1 Poore, Charters and Constitutions, vol. i., p. 647. a Id. vol ii., 
 1676. 
 
New States and Constitutions 231 
 
 the Union, was that providing for the admission 
 of the State of Ohio, approved April 30, 1802. * 
 It authorized: 
 
 All male citizens of the United States, who shall have 
 arrived at full age, and resided within the said territory 
 at least one year previous to the day of election, and shall 
 have paid a territorial or county tax, and all persons hav- 
 ing in other respects the legal qualifications to vote for 
 representatives in the general assembly of the territory, 
 
 to choose representatives to form a convention, to 
 first determine by a majority of the whole number 
 elected whether it be expedient to form a constitu- 
 tion and State government, and if so, by ordinance 
 to provide for electing representatives to form a 
 constitution or frame of government, "provided 
 the same shall be republican and not repugnant 
 to " the Ordinance for the government of the North- 
 western Territory. The convention so authorized 
 met and framed a constitution, which was not sub- 
 mitted to the people, 2 but Congress, by act approved 
 February 19, 1803, declared that the State of Ohio 
 had become one of the United States of America. 3 , 4 
 
 1 Poore, Charters and Constitutions, vol. ii., p. 1453. a Id., 1455. 
 
 3 Id., 1464. 
 
 4 The Ordinance of 1787 for the government of the Northwest- 
 ern Territory provided in Article V. for the formation of States and 
 their admission into the Union, and that whenever any of said 
 States should have sixty thousand free inhabitants therein, they 
 should be at liberty to form a permanent constitution and State 
 government, "Provided, the Constitution and government so to 
 be formed shall be republican, and in conformity to the principles 
 contained in these articles. . . . " 
 
232 The Changing Order 
 
 The first effort to bind a new State to terms and 
 conditions other than those to which it would be 
 subject in like manner as all other States under 
 and by force of the provisions in the Constitution 
 of the United States was expressed in the Enabling 
 Act for Louisiana, passed February 20, 181 1. 1 
 
 That act authorized 
 
 all free white male citizens of the United States, who 
 shall have arrived at the age of twenty-one years, 
 and resided within 
 
 the territory described in the act 
 
 at least one year previous to the day of election, and 
 shall have paid a territorial, county, district or parish 
 tax : and all persons having in other respects the legal 
 qualifications to vote for representatives in the general 
 assembly of the said territory, 
 
 to choose representatives to form a convention to 
 frame a constitution and State government for the 
 people within the territory, and by Section 3 that 
 if it be determined to be expedient so to do, then 
 the convention might 
 
 in like manner declare, in behalf of the people of the 
 said territory, that it adopts the constitution of the 
 United States; whereupon the said convention shall 
 be, and hereby is, authorized to form a constitution 
 and state government, for the people of the said terri- 
 tory: Provided, the constitution to be formed, in 
 virtue of the authority herein given, shall be republi- 
 
 1 2 Stat., 641. 
 
New States and Constitutions 233 
 
 can, and consistent with the constitution of the United 
 States; that it shall contain the fundamental prin- 
 ciples of civil and religious liberty; . . . * 
 
 besides certain other specified provisions. 
 
 It was further provided that if such constitution 
 should be adopted by the State, it should be trans- 
 mitted to Congress, and if it were not disapproved 
 by Congress at its next session after receipt thereof, 
 the said State should be admitted into the Union 
 upon the same footing with the original States. 
 A constitution was adopted by the convention in 
 conformity with the provisions of the Enabling Act, 
 and, on April 8, 18 12, Congress passed an act 
 reciting compliance with the previous requirements 
 and declaring that the said State was admitted into 
 the Union, 
 
 on an equal footing with the original states, in all 
 respects whatever, by the name and title of the State 
 of Louisiana : Provided, That it shall be taken as a con- 
 dition upon which the said state is incorporated in the 
 Union, that . . . all . . . conditions and terms 
 contained in the third section of the act, the title 
 whereof is hereinbefore recited, shall be considered, 
 deemed and taken, fundamental conditions and terms, 
 upon which the said state is incorporated in the 
 Union. 2 
 
 In the case of Permoli v. First Municipality 3 it 
 was sought to have it adjudged that an ordinance 
 of the First Municipality of the City of New 
 
 1 2 Stats, at L., 642. a Id., 703. a Howard, 588. 
 
234 The Changing Order 
 
 Orleans prohibiting the carrying to or exposing in 
 any of the Catholic churches of that municipality 
 any corpse, or the celebration by any priest of a 
 funeral at such churches, and requiring all funeral 
 rites to be performed in a designated obituary 
 chapel, was void, as being in violation of the pro- 
 visions of the above-mentioned Enabling Act, as 
 well as of the act admitting the State into the 
 Union upon condition that its constitution should 
 contain the fundamental principles of civil and 
 religious liberty. But the Court pointed out that 
 the Constitution of the United States makes no 
 provision for protecting the citizens of the respec- 
 tive States in their religious liberties, leaving that 
 subject entirely to the State constitutions and 
 laws; that all that Congress intended by the Enab- 
 ling Acts was to declare in advance, to the people 
 of the territories, the basic principles their con- 
 stitutions should contain: 
 
 . . . this was every way proper under the circum- 
 stances [said Mr. Justice Catron]; the instrument 
 having been duly formed and presented, it was for the 
 national legislature to judge whether it contained 
 the proper principles, and to accept it if it did, or 
 reject it if it did not. Having accepted the con- 
 stitution and admitted the state, "on an equal footing 
 with the original states in all respects whatever," 
 in express terms, by the act of 1812, Congress was 
 concluded from assuming that the instructions con- 
 tained in the act of 181 1 had not been complied with. 
 No fundamental principles could be added by way of 
 
New States and Constitutions 235 
 
 amendment, as this would have been making part of 
 the state constitution; if Congress could make it in 
 part, it might, in the form of amendment, make it 
 entire. The conditions and terms referred to in the 
 act of 1 8 12, could only relate to the stipulations con- 
 tained in the second proviso of the act of 181 1 involv- 
 ing rights of property and navigation; and in our 
 opinion were not otherwise intended. 
 
 A similar question arose in the case of Pollard's 
 Lessee v. Hagan, x where it was held that a declara- 
 tion contained in the compact entered into between 
 the United States and Alabama, when the latter 
 State was admitted into the Union, as a condition 
 to her admission, would be void if inconsistent 
 with the Constitution of the United States. 
 
 It was pointed out by the Court that all con- 
 stitutional laws are binding on the people in the 
 new States and the old ones, whether they consent 
 to be bound by them or not. 
 
 Every constitutional act of Congress [said Mr. 
 Justice McKinley] is passed by the will of the people 
 of the United States, expressed through their repre- 
 sentatives, on the subject-matter of the enactment; 
 and when so passed it becomes the supreme law of the 
 land, and operates by its own force on the subject- 
 matter in whatever state or territory it may happen 
 to be. 
 
 Notwithstanding these decisions, rendered in 
 1845, and the very clear provisions of the Con- 
 
 1 3 How., 212. 
 
236 The Changing Order 
 
 stitution, Congress has proceeded in many sub- 
 sequent acts for the admission of new States to 
 prescribe terms and conditions purporting to bind 
 the new State, which conditions the new State was 
 required to accept by ordinance expressed to be 
 "irrevocable without the consent of the people of 
 the State and of the United States." Such con- 
 ditions were imposed with respect to Missouri in 
 1821 (3 Stat., 645), Nebraska in 1864 (13 Stat., 47), 
 Colorado in 1875 (18 Stat., 474), North Dakota, 
 South Dakota, Montana, and Washington in 1889 
 (25 Stat., 676), Utah in 1894 (28 Stat., 107), and 
 Oklahoma in 1906 (34 Stat., 267). 
 
 The Enabling Act of the State of Oklahoma, 
 passed June 16, 1906 (34 Stat. 267), provided 
 that the constitution to be adopted for the new 
 State 
 
 shall be republican in form, and make no distinction 
 in civil or political rights on account of race or color, 
 and shall not be repugnant to the Constitution of the 
 United States and the principles of the Declaration 
 of Independence. 
 
 The capital of the State, it was enacted, shall 
 be temporarily at Guthrie, and shall not be 
 changed therefrom previous to 191 3, but shall 
 after that year be located by the electors of said 
 State at an election to be provided for by the 
 Legislature. 
 
 The act further required the convention to 
 provide in the constitution so to be adopted : 
 
New States and Constitutions 237 
 
 First. That perfect toleration of religious senti- 
 ment shall be secured, and that no inhabitant of said 
 State shall ever be molested in person or property 
 on account of his or her mode of religious worship, 
 and that polygamous or plural marriages are forever 
 prohibited. 
 
 Second. That the manufacture, sale, barter, giv- 
 ing away, or otherwise furnishing . . . intoxicat- 
 ing liquors within those parts of said State, now known 
 as the Indian Territory and the Osage Indian Reserva- 
 tion, and within any other parts of said State which 
 existed as Indian reservations . . . [shall be pro- 
 hibited.] 
 
 Sixth. That said State shall never enact any law 
 restricting or abridging the right of suffrage on account 
 of race, color, or previous condition of servitude. 
 
 And finally, 
 
 That the constitutional convention provided for 
 herein shall, by ordinance irrevocable, accept the 
 terms and conditions of this Act. 
 
 The convention was held, a constitution and an 
 "ordinance irrevocable" adopted, and thereupon 
 Oklahoma was admitted to the Union by pro- 
 clamation of President Roosevelt, November 16, 
 1907. Three years later, on December 29, 1910, 
 its Legislature passed an act providing for the 
 removal of the capital from Guthrie to Oklahoma 
 City, notwithstanding its covenant with the United 
 States not to so remove prior to 19 13. Whatever 
 
238 The Changing Order 
 
 might be said of the ethics of this act, the Supreme 
 Court of the United States in the very recent case 
 of Coyle v. Smith, decided May 29, 191 1, ' held that 
 the power to locate its own seat of government and 
 to determine when and how it should be changed 
 from one place to another was essentially and 
 peculiarly a State power, which was acquired by 
 Oklahoma when it was admitted into the Union 
 on an equality with the other States, and that 
 Congress might not, as a condition to the admis- 
 sion of a new State, constitutionally restrict its 
 authority or impose upon it any limitations not 
 common to the other States of the Union. "It 
 may well happen," said Mr. Justice Lurton, in 
 delivering the opinion of the Court, 
 
 that Congress should embrace in an enactment intro- 
 ducing a new State into the Union legislation intended 
 as a regulation of commerce among the States or with 
 Indian tribes situated within the limits of such new 
 State, or regulations touching the sole care and dis- 
 position of the public lands or reservations therein, 
 which might be upheld as legislation within the sphere 
 of the plain power of Congress. But in every such 
 case such legislation would derive its force not from any 
 agreement or compact with the proposed new State, 
 nor by reason of its acceptance of such enactment as a 
 term of admission, but solely because the power of 
 Congress extended to the subject, and, therefore, 
 would not operate to restrict the State's legislative 
 power in respect of any matter which was not plainly 
 within the regulating power of Congress. 
 1 221 U. S., 559. 
 
New States and Constitutions 239 
 
 An interesting variation from the rules observed 
 with respect to the admission of all other States 
 is furnished by the case of the State of Utah. 
 It is familiar history that the especial problem 
 with which the national government had to grapple 
 during the territorial days of Utah, was the institu- 
 tion of polygamy, or plural marriages, a problem 
 which led to the drastic legislation of Congress 
 repealing the charter of the "Church of Jesus 
 Christ of Latter Day Saints," commonly known 
 as the Mormon Church, the appointment of a 
 receiver of its property and the application of it 
 on principles of cy pres — all of which were sustained 
 by the Supreme Court of the United States in the 
 case of Mormon Church v. United States. x When, 
 therefore, Congress came to deal with the estab- 
 lishment of a government for Utah, upon its 
 admission as a State into the Union, it provided 
 for the formation of a constitution and State 
 government for the proposed State which should 
 be "republican in form and make no distinction 
 in civil or political rights on account of race or 
 color, except as to Indians not taxed, and not to be 
 repugnant to the Constitution of the United States 
 and the principles of the Declaration of Independ- 
 ence." The Enabling Act further required the 
 constitutional convention to provide by ordinance, 
 irrevocable without the consent of the United 
 States, and the people of said State, among other 
 things, 
 
 1 136 U. S., 1. 
 
240 The Changing Order 
 
 That perfect toleration of religious sentiment shall 
 be secured and that no inhabitant of said State shall 
 ever be molested in person or property on account of 
 his or her mode of religious worship: Provided, That 
 polygamous or plural marriages are forever prohibited. 
 
 The constitutional convention thereupon framed 
 and the people adopted a constitution, which con- 
 tained in itself, as Article 3 thereof, the above- 
 mentioned required provisions, and declared that 
 such provisions "shall be irrevocable without the 
 consent of the United States and the people of 
 this State." Nevertheless, by the twenty-third 
 article of the constitution, provision was made for 
 the adoption of any amendment to the constitu- 
 tion without exception, by the vote of two thirds 
 of the members of each house of the Legislature, 
 and of a majority of the electors of the State 
 voting thereon. So that this so-called irrevocable 
 ordinance thus stipulated in one part of the con- 
 stitution to be beyond change without the con- 
 sent of the United States and the people of the 
 State, under the subsequent articles may be 
 modified or repealed at any time by the vote of a 
 majority of each house of the Legislature of the 
 State, confirmed by that of a majority of the 
 qualified electors voting thereon. Perfect toler- 
 ation of religious sentiment, and the prohibition of 
 polygamous or plural marriages, sought to be 
 accomplished by Congress, therefore rest for their 
 continuance, not upon any binding compact 
 between the State and the general government, 
 
New States and Constitutions 241 
 
 but solely upon the continued willingness of a 
 majority of the qualified electors of the State to 
 retain such provisions as a part of its fundamental 
 law. 
 
 It is well to keep clearly in mind the precise 
 conditions under which new States are admitted 
 into the Union, and the powers and privileges 
 which they will possess after such admission, in 
 determining whether or not a particular applicant 
 shall be received into full fellowship in the nation. 
 
 Prior to the admission of the State of Oklahoma 
 no radical departure in the general scheme of 
 State government from the recognized common 
 standard was proposed by the constitution of any 
 new State. Every one of them, judged' by the 
 principles above referred to, and tested by the 
 general schemes embodied in the constitutions of 
 the original States, could be fairly said to be 
 republican in character, and to contain nothing 
 inconsistent with the principles of the Federal 
 Constitution. Every one presented a government 
 which in general conformed to the type which 
 has become recognized as the American representa- 
 tive republican form of government. 
 
 The constitution of Oklahoma presented new 
 considerations, and was the occasion of much 
 discussion and considerable hesitation over its 
 approval. 
 
 The special census of Oklahoma and Indian 
 Territory which were combined into the State 
 of Oklahoma, taken as of July 1, 1897, showed a 
 16 
 
242 The Changing Order 
 
 total population of 1,414,042. Of this number, 
 334,035 were white males upwards of twenty-one 
 years of age. The vote on the adoption of the 
 Constitution was, for its adoption, 180,333; 
 against it, 75,059; total, 253,392. The total vote 
 was therefore upwards of seventy-five per cent, 
 of the entire number of adult white males, and 
 the total vote on the constitution was nearly 
 nineteen per cent, of the entire population. It 
 obviously met with the approval of the general 
 body of the people of the State. By proclamation 
 dated November 16, 1907, President Roosevelt 
 declared that — 
 
 The said constitution and government of the pro- 
 posed State of Oklahoma are republican in form, and 
 that the said constitution makes no distinction in civil 
 or political rights on account of race or color and is 
 not repugnant to the Constitution of the United States 
 or to the principles of the Declaration of Independence, 
 and that it contains all of the six provisions expressly 
 required by Section 3 of the said act to be therein 
 contained 1 . . . 
 
 and declared it to be admitted as a State into the 
 Union. 
 
 Mr. Bryce, in The American Commonwealth , 
 notes that the chief of the tendencies revealed by 
 the constitutions of the last forty years is for the 
 constitutions to grow longer. This, he says, is 
 an absolutely universal rule. 2 Woodrow Wil- 
 
 * 35 Stat., Part 2, p. 2 161. » Vol. i„ p. 454 (3d ed.). 
 
New States and Constitutions 243 
 
 son says in his work, The State: "The danger 
 is that constitution making will become with us 
 only a cumbrous mode of legislation." 1 In the 
 constitution of Oklahoma it has become so. 
 That constitution is of inordinate length. It is 
 divided into 24 articles and 312 sections, and it 
 fills 70 closely printed octavo pages. A large 
 part of its provisions are matters which may 
 be the proper subjects of legislation, but which 
 have no place in the fundamental law, tested by 
 established American standards. While providing 
 for a bicameral Legislature, it reserves to the people 
 powers of initiative and referendum respecting leg- 
 islation. Eight per cent, of the entire number of 
 qualified voters are given the right to propose laws, 
 and fifteen per cent, amendments to the constitu- 
 tion. The referendum of any law passed by the 
 Legislature may be ordered by petition signed by 
 five per cent, of the qualified voters. Percentages 
 are to be based on the total number of votes cast 
 at the last preceding general election for the State 
 officer receiving the highest number of votes cast 
 at such election. A measure rejected on refer- 
 endum cannot again be proposed within three 
 years, except on petition of twenty-five per cent, of 
 the qualified voters. The constitution may be 
 amended in any particular, if agreed to by a major- 
 ity of the members elected to each house, and 
 then voted for by a majority of all the electors 
 voting upon the proposition. But it is provided 
 
 1 Ed. of 1899, p. 475. 
 
244 The Changing Order 
 
 that no convention shall be called by the Legisla- 
 ture to propose alterations, revisions, or amend- 
 ments to the constitution, or to propose a new 
 constitution, unless the law for it be first approved 
 by the people, on a referendum vote. The question 
 of such proposed convention must be submitted to 
 the people at least once in twenty years. These 
 provisions, however, are not to impair the right of 
 the people to amend by vote on an intitiative 
 proposition. 
 
 The Oklahoma Enabling Act also provided for 
 submitting to the people of the Territories of 
 Arizona and New Mexico the question whether or 
 not they should become one State, and, if so, then 
 for a convention to frame a constitution for such 
 State and to provide for its admission into the 
 Union. A vote was had on this proposition and 
 the decision was in the negative. 
 
 Subsequently, on June 20, 1910, an act was 
 passed providing for the admission of the Terri- 
 tories as separate States. 1 This act authorized 
 the election of delegates in each Territory to a 
 convention empowered to form a constitution and 
 provide a government for the proposed State, which 
 constitution "shall be republican in form and 
 make no distinction in civil or political rights on 
 account of race or color, and shall not be repugnant 
 to the Constitution of the United States and the 
 principles of the Declaration of Independence." 
 
 The convention was further required to provide 
 
 1 36 Stats., 557. 
 
New States and Constitutions 245 
 
 "by an ordinance irrevocable without the consent 
 of the United States and the people of said State — " 
 a number of provisions. The constitution, when 
 formed, was to be submitted for the approval of the 
 qualified voters of the Territory at a convention 
 to be held to consider the same, and 
 
 when said constitution and such provisions thereof as 
 have been separately submitted shall have been duly 
 ratified by the people of New Mexico as aforesaid a 
 certified copy of the same shall be submitted to the 
 President of the United States and to Congress for 
 approval, together with a statement of the votes cast 
 thereon and upon any provisions thereof which were 
 separately submitted to and voted upon by the people. 
 And if Congress and the President approve said con- 
 stitution and the said separate provisions thereof, or, 
 if the President approves the same and Congress fails 
 to disapprove the same during the next regular session 
 thereof, then and in that event the President shall 
 certify said facts to the Governor of New Mexico, who 
 shall, within thirty days after the receipt of said 
 notification from the President of the United States, 
 issue his proclamation for the election of the state and 
 county officers, etc. 
 
 A similar provision was made as to Arizona. 
 
 When the result of the election should be cer- 
 tified to the President, he was required imme- 
 diately to issue his proclamation announcing the 
 result of said election so ascertained. 
 
 And upon the issuance of said proclamation by the 
 President of the United States, the proposed state of 
 
246 The Changing Order 
 
 New Mexico shall be deemed admitted by Congress 
 into the Union, by virtue of this Act, on an equal foot- 
 ing with the other States — s 
 
 and in like manner as to Arizona. 
 
 There has been some discussion as to the precise 
 function of the President under these provisions, 
 and the criteria governing his action in approving 
 or disapproving the constitution to be submitted 
 pursuant thereto. It is quite clear that Congress 
 may not delegate to the President its power to 
 determine whether or not a State shall be ad- 
 mitted into the Union. Article 4, Section 4, of 
 the Constitution declares "New States may be 
 admitted by the Congress into this Union.' ' But 
 that Congress may exercise a legislative power 
 to take effect upon the ascertainment by the 
 President of a specified fact, is well established. 
 In such case the President is not exercising a 
 delegated legislative power, but is the mere agent 
 of the law-making department to ascertain and 
 declare the event upon which its expressed will is 
 to take effect. 2 While therefore Congress may 
 not empower the President to admit a Territory as 
 a State whenever it shall present to him a con- 
 stitution which meets with his individual approval, 
 it may provide for the admission of a State when- 
 ever it shall adopt a constitution which shall be 
 republican in form, and make no distinction in 
 
 1 36 Stat., 561. 
 
 2 See Field v. Clark, 143 U. S., 649, 692; Buttfield v. Stranahan, 
 192 U. S., 470, 476. 
 
New States and Constitutions 247 
 
 civil or political rights on account of race or color, 
 and shall not be repugnant to the Constitution of 
 the United States and the principles of the Declar- 
 ation of Independence ; and empower the President 
 to ascertain and determine whether a particular 
 constitution meets that description. If, therefore, 
 the President should act pursuant to the provisions 
 of the above-mentioned act, it would be presumably 
 upon the ascertainment that the constitution 
 presented met the requirements specified by 
 Congress; no other consideration being submitted 
 for his determination. But Congress is not bound 
 to approve the constitution and admit a State, even 
 though it do conform with the conditions specified 
 in the Enabling Act . Congress may , because of the 
 general nature of the institutions provided in the 
 proposed constitution; because of the conditions 
 under which the constitution was adopted ; because 
 of the character or number of the electorate upon 
 whose vote it was adopted ; or because of any other 
 reason which it may deem sufficient, or without any 
 reason, reject a proposed constitution in toto, or 
 require it to be modified in any given particular 
 as a condition to admitting the State. 
 
 To be sure, except in so far as it might conflict 
 with some provision of the Federal Constitution, 
 the new State might immediately after its admis- 
 sion into the Union amend its constitution or 
 adopt a new one, x and Congress would be powerless 
 
 1 As Arizona did with respect to provisions for the recall of 
 judges, after the admission to statehood. 
 
248 The Changing Order 
 
 to prevent. Its only protection against such an 
 act would be to require it to embody provisions so 
 regulating the means of amendment as to ensure 
 against hasty or ill-considered changes. Thus, 
 e. g.y it might require the constitution to provide 
 that it should only be amended with the consent 
 of at least a majority of all the qualified voters of 
 the State. 
 
 The constitution of New Mexico was adopted 
 by the convention and submitted to the people of 
 that Territory. The returns of the Thirteenth 
 Census gave New Mexico, in 19 10, a total popula- 
 tion of 327,301, of which 76,233 were native-born 
 males over twenty-one years of age, and 4269 
 naturalized foreign-born males over twenty-one 
 years of age, making an apparent total voting 
 population of 80,502. There were cast for the 
 constitution 31,742 votes; against it 13,399 votes, 
 or a total of 45,141 on the question of its adoption, 
 — being about fifty-six per cent, of the total 
 number of the qualified voters, and slightly less 
 than fourteen per cent, of the total population. 
 
 The constitution so adopted, while exhibiting 
 the tendency to undue length and minutiae above 
 noted, yet compares favorably in that respect with 
 the constitution of Oklahoma. It contains 22 
 articles divided into 257 sections, and fills 38 ordi- 
 nary printed octavo pages. 
 
 Legislative power is vested in a Legislature 
 divided into two chambers and there is a provision 
 reserving to the people the power to disapprove, 
 
New States and Constitutions 249 
 
 suspend, and annul any law enacted by the Legis- 
 lature except appropriation and health laws, etc. 
 This right must be exercised by petition signed 
 by not less than ten per cent, of the qualified 
 electors in each of three fourths of the counties, 
 and in the aggregate by not less than ten per cent. 
 of the qualified electors of the State, as shown by 
 the total number of votes cast at the last preceding 
 general election. The question of the approval 
 or rejection of such laws must be submitted to the 
 electorate at the next general election; and if a 
 majority of the legal votes cast thereon, and not 
 less than forty per cent, of the total number of such 
 votes, be cast at such general election for the rejec- 
 tion of such law, it shall be annulled and thereby 
 repealed, with the same effect as if the Legislature 
 had then repealed it. If such petitions be signed 
 by not less than twenty-five per cent, of the 
 qualified electors under each of the foregoing 
 conditions, and filed with the secretary of state 
 within ninety days after the adjournment of the 
 session of the Legislature at which the law was 
 enacted, the operation of the law shall be thereby 
 suspended and the question of its approval or 
 rejection shall be likewise submitted to a general 
 vote at the next ensuing general election. If a 
 majority of the votes cast thereon, being not less 
 than forty per cent, of the total number of votes 
 cast at such general election be cast for the rejec- 
 tion of such law, it shall be thereby annulled; 
 otherwise it shall go into effect. In the matter of 
 
250 The Changing Order 
 
 amending the constitution, there is a marked 
 reaction towards earlier standards. The framers 
 of this proposed constitution evidently propose 
 that any changes in it shall be supported by 
 an active public demand. They have therefore 
 provided that the constitution may be amended 
 by the vote of two thirds of all members elected 
 to each of the two houses of the Legislature, vot- 
 ing separately, and submitted to the electors of 
 the State for their approval or rejection. But the 
 proposal must be ratified by a majority of the 
 electors voting thereon and by an affirmative vote 
 equal to at least forty per cent, of all the votes cast 
 at said election in the State in at least one half 
 of the counties thereof. In that event, and not 
 otherwise, such amendment shall become a part 
 of the constitution. Not more than three amend- 
 ments may be submitted at one election, and if 
 two or more amendments are proposed they shall 
 be so submitted as to enable the electors to vote 
 on each of them separately. Provision is also 
 made for a constitutional convention to revise or 
 amend the constitution, at any time within twenty- 
 five years by three fourths vote of the members 
 elected to each house, at any time after twenty- 
 five years by two thirds votes of the members of 
 each house; and that in either event the question 
 of calling a convention shall be submitted to the 
 electors at the next general election. If a majority 
 of the electors voting at such election in the State, 
 and in at least one half of the counties thereof, 
 
New States and Constitutions 251 
 
 shall vote in favor of calling a convention, the 
 Legislature shall at the next session provide by law 
 for calling the same. The compact with the 
 United States required by the Enabling Act is 
 embodied in the twenty -first article of the constitu- 
 tion, which is declared to be irrevocable without 
 consent of the United States and the people of 
 the State ; and that no change or abrogation of its 
 provisions in whole or in part shall be made by any 
 constitutional amendment without the consent of 
 Congress. 
 
 This constitution has received the formal 
 approval of the President and is now before the 
 Congress. x 
 
 In very marked contrast with the constitution 
 of New Mexico, both as to the number of votes cast 
 for its adoption, the percentage of the whole 
 population voting with respect to it, and the 
 provisions of the constitution itself, is the con- 
 stitution of Arizona, which was adopted by the 
 people of that Territory on February 9 , 1 9 1 1 . The 
 returns of the Thirteenth Census give Arizona 
 in 1910 a total population of 204,354, of which 155,- 
 
 1 By joint resolution of Congress approved Aug. 21, 191 1, the 
 admission of New Mexico and Arizona respectively was provided 
 for, conditioned upon the modification in specified particulars of 
 the tentative constitutions theretofore adopted by them (37 
 Stats, at L., 39), and by proclamations dated respectively Jan. 
 6, 1912, and Feb. 14, 1912, President Taft declared that these 
 conditions had been complied with, and that New Mexico and 
 Arizona respectively were admitted into the Union on the same 
 footing as the other States (37 Stats, at L., vol. ii., pp. 1723, 
 1728). 
 
252 The Changing Order 
 
 550 are native born, and 48,804 foreign born. Of 
 this population, 118,576 are males, and 85,778 are 
 females. The total number of white males over 
 twenty-one years of age is 65,133, of which number 
 39,427 are native born and 5896 naturalized 
 citizens, so that the total voting population is, 
 apparently, 45,323. There were cast for the 
 constitution 12,187 votes, against it 3822 votes, 
 or a total of 16,009 on the question of its adoption, 
 being about thirty -five per cent, of the total number 
 of qualified voters, and slightly less than eight 
 per cent, of the total population. The vote for 
 the constitution was by less than twenty-seven 
 per cent, of the voting population, and about six 
 per cent, of the total population. 
 
 Congress may well consider whether or not a 
 Territory in which only thirty-five per cent, of the 
 qualified electors exhibit sufficient interest to vote 
 upon the adoption of the fundamental law on 
 which it seeks admission to the Union, gives evi- 
 dence of that capacity for self-government which 
 is so essential to the maintenance of free institutions. 
 
 The constitution thus adopted by the vote of this 
 small percentage of the people of Arizona contains 
 provisions without precedent in any constitution 
 ever submitted to Congress for approval by an 
 applicant for admission to statehood. While declar- 
 ing generally that the powers of the government 
 shall be divided into three separate departments, 
 the legislative, the executive, and the judicial, 
 and vesting the legislative authority in a Legisla- 
 
New States and Constitutions 253 
 
 ture consisting of a senate and house of repre- 
 sentatives, provision is made for the exercise of 
 legislative power by small percentages of the 
 qualified electors. Under the power to initiate 
 legislation, ten per cent, of the qualified electors 
 are authorized to propose any measure, and 
 fifteen per cent, to propose any amendment to the 
 constitution. Under the referendum power, five 
 per cent, of the qualified electors may order the 
 submission to the people at the polls of any meas- 
 ure, or of any item, section, or part of any measure 
 enacted by the Legislature, except public health 
 laws, etc.; and no act passed by the Legislature 
 shall become operative for ninety days after the 
 close of its session, in order to allow opportunity 
 for referendum petitions to be filed. Any measure 
 referred to a vote of the qualified electors under 
 the initiative or referendum shall become a law 
 when approved by a simple majority of the votes 
 cast thereon; and the veto power of the governor 
 shall not extend to initiative or referendum 
 measures approved by a majority of the qualified 
 voters. The total number of all votes cast for all 
 candidates for governor at the last preceding 
 general election, is made the basis on which the 
 number of qualified electors required to sign the 
 petition shall be computed. These rights of ini- 
 tiative and referendum are also reserved to the 
 qualified electors of every incorporated city, town, 
 and county, as to all local, city, town, or county 
 matters on which such incorporated cities, towns, 
 
254 The Changing Order 
 
 or counties shall be empowered by general laws 
 to legislate. Under the power of the initiative, 
 fifteen per cent, of the qualified electors may pro- 
 pose measures on such matters, and ten per cent, 
 may propose the referendum on legislation enacted 
 by or within such city, town, or county. If two 
 or more conflicting measures or amendments to the 
 constitution shall be approved by the people at 
 the same election, the measure or amendment 
 receiving the highest number of votes shall prevail 
 in all particulars as to which there is conflict. 
 
 It will be observed that there is no requirement 
 respecting the minimum number of votes which 
 must be cast, in order that an act of the legislature 
 may be overruled, or a law directly enacted upon 
 the initiative, or the constitution amended in any 
 particular. All that is required is that the measure 
 shall be proposed, or the machinery set in motion 
 by the above-mentioned small percentages of 
 the qualified electors who voted for governor at the 
 previous election, and then, if a majority of the 
 votes cast at the popular election is in favor of 
 the proposed action or measure, it becomes effective, 
 no matter how small a proportion of the total 
 electorate of the State may be the vote, and with- 
 out the slightest regard to its territorial distribu- 
 tion. Thus, if we should assume that the total of 
 the vote cast for all candidates for governor at the 
 last preceding election was that cast upon the 
 proposition to adopt this proposed constitution, 
 viz., 16,009, then the constitution could be amended 
 
New States and Constitutions 255 
 
 on the proposal of fifteen per cent, of that number, 
 or 2402 votes — that is less than one and two tenths 
 per cent, of the whole population, or about five and 
 one fourth per cent, of the whole body of qualified 
 electors of the State, — and carried by a majority of 
 the 16,009 votes cast, that is, by 8,005 votes, — or, 
 indeed, for that matter, by any smaller number 
 which might constitute a majority of the votes 
 cast on the proposition to amend. 
 
 The end of the institution, maintenance and admin- 
 istration of government [runs the preamble to the 
 constitution of Massachusetts] is to secure the exist- 
 ence of the body-politic, to protect it, and to furnish 
 the individuals who compose it with the power of 
 enjoying, in safety and tranquillity, their natural rights 
 and the blessings of life. ... It is the duty 
 of the people, therefore, in framing a constitution of 
 government, to provide for an equitable mode of 
 making laws, as well as for an impartial interpretation 
 and a faithful execution of them ; that every man may, 
 at all times, find his security in them. 1 
 
 The uncertain sands of shifting popular inclina- 
 tion, upon which the security of life, liberty, and 
 property depend under the constitution of Arizona, 
 are far remote from the conceptions of the framers 
 of either the Massachusetts constitution of 1780 
 or the Constitution of the United States. 
 
 But this is not all. Every public officer in the 
 State of Arizona holding a public office, either by 
 
 1 Poore's Charters and Constitutions, p. 956. 
 
256 The Changing Order 
 
 election or appointment, whether it be executive, 
 legislative, or judicial, is made subject to recall by 
 qualified electors for the district for which he is 
 elected to such office, which district may include 
 the whole State. Electors to the number of 
 twenty -five per cent, of the vote cast at the last 
 preceding general election for all of the candidates 
 for the office held by such officer, may, by petition, 
 demand his recall. This petition must contain a 
 general statement in not more than two hundred 
 words of the grounds of such demand, and unless 
 the officer against whom it is directed shall offer 
 his resignation within five days after it is filed, 
 a special election must be ordered, to be held not 
 less than twenty nor more than thirty days after 
 such order, to determine whether he shall be 
 recalled. On the ballots at said election shall be 
 printed the reasons as set forth in the petition for 
 demanding his recall, and in not more than two 
 hundred words, the officer's justification of his course 
 in office. Unless he otherwise request, in writing, 
 his name shall be placed as a candidate on the 
 official ballot without nomination. Other candi- 
 dates for the office may be nominated to be voted 
 for at such election, and the candidate who shall 
 receive the highest number of the votes cast shall 
 be declared to be elected for the remainder of the 
 term; and thereupon, if the incumbent does not 
 receive the highest number of votes cast, he shall 
 be deemed to be removed from office, upon 
 qualification of his successor. Such recall petition 
 
New States and Constitutions 257 
 
 may be circulated against any officer after he has 
 held his office for a period of six months, and 
 against a member of the Legislature at any time 
 after five days from the beginning of the first 
 session after his election. 
 
 After one recall petition and election no further 
 recall petition shall be filed against the same officer 
 during the term for which he was elected, unless 
 petitioners signing such petition shall first pay into 
 the public treasury which has paid such election ex- 
 penses all expenses of the preceding election. 
 
 Subject only to this provision, any number of 
 recall petitions may be directed at the same official 
 until his ejection shall have been secured. 
 
 Provision is also made for amending the constitu- 
 tion by a vote of a majority of the members elected 
 to each of the two houses of the Legislature, and 
 submission to popular vote. No convention may 
 be called by the Legislature to propose amendments 
 to the constitution, or a new constitution, unless 
 the law providing for such convention shall first 
 be approved by the people on a referendum vote 
 at a regular or special election; and any amend- 
 ments, alterations, revisions, or new constitution 
 proposed by such convention shall be submitted 
 to the electors at a general or special election, and 
 be approved by the majority of the electors voting 
 thereon before the same shall become effective. 
 
 The advocates of the scheme of so-called popular 
 government embodied in the Arizona constitution 
 17 
 
258 The Changing Order 
 
 have vigorously opposed the approval of that of 
 New Mexico as reactionary, and have as strenu- 
 ously asserted the republican character of the 
 plan proposed for Arizona. It is an interesting 
 paradox that the whole tendency of modifications 
 in the established forms of republican government 
 advocated as accomplishing a greater popular 
 participation in government, is to confer power 
 upon a small minority of the people to control not 
 only the making of laws, but of constitutions. 
 
 The postulate of American political faith is that 
 governments derive their just powers from the 
 consent of the governed. Taken in the literal, 
 etymological sense of the term, no government has 
 ever existed — certainly not on this continent — 
 which was framed with the active conscious agree- 
 ment of all those who were to be subject to it; 
 while, of course, all government has rested, and 
 must necessarily rest upon the more or less passive 
 acquiescence or assent of those governed. 
 
 The Massachusetts constitution of 1780 recites 
 that — 
 
 The people of this commonwealth have the sole and 
 exclusive right of governing themselves as a free, 
 sovereign, and independent State; [and that] the people 
 alone have an incontestable, unalienable and inde- 
 feasible right to institute government, and to reform, 
 alter, or totally change the same when their protection, 
 safety, prosperity, and happiness require it. 1 
 
 v x Poore's Charters and Constitutions, 958. 
 
New States and Constitutions 259 
 
 Yet the right under that constitution to choose 
 representatives to the general assembly is limited 
 to male persons 
 
 being twenty-one years of age, and resident in any 
 particular town in this commonwealth, for the space 
 of one year next preceding, having a freehold estate 
 within the same town, of the annual income of three 
 pounds, or any estate of the value of sixty pounds. 
 
 The right of suffrage, it was held by the Supreme 
 Court of the United States in Minor v. Happersett, x 
 is not a necessary incident to citizenship of the 
 United States, and whether women shall be allowed 
 to vote or no is a matter left entirely to the dis- 
 cretion of the State governments. In his opinion 
 in that case, Chief Justice Waite points out that 
 when the Federal Constitution was adopted, in no 
 State were all the citizens permitted to vote, and 
 he summarizes 2 the various qualifications required 
 in the different States as a condition to participa- 
 tion in elections. In no instance were women, 
 married or single, given the right of suffrage. 
 They were expressly excluded from suffrage in 
 nearly all the States by the express provision of 
 their constitution and laws. "In all," to quote the 
 language of the Chief Justice, "the people partici- 
 pated to some extent, through their representatives 
 elected in the manner specifically provided." 
 
 The fact is, that even government by folkmoot 
 or town meeting, was government by a certain 
 
 1 21 Wall., 163. 'See p. 172 et seq. 
 
260 The Changing Order 
 
 number of the community, less than all, assuming 
 to represent those who, from motives of policy 
 or tradition, were excluded from participation by 
 those who were strong enough to exclude them. 
 So at an early date, in this country, the unwieldy 
 nature of government by a large assembly of the 
 adult male population, possessing agreed qualifica- 
 tions to entitle them to participate, brought about 
 the plan of choosing a practicable number of dele- 
 gates to meet and enact "such laws and ordinances 
 as shall be judged to be good and wholesome for 
 the whole." 
 
 This plan of the qualified electorate choosing 
 representatives to make laws, naturally led to the 
 formulation of charters or constitutions prescrib- 
 ing the rules and limitations within which such 
 representatives should act, and in nearly all of 
 these constitutions, certain inalienable rights are 
 enumerated which must be preserved, and which 
 lawmakers must not trench upon. 
 
 In the framing of the early State constitutions, 
 as indeed in most of the later ones, care was 
 observed to secure their approval by as large a 
 number of the adult male population as was 
 practicable. In general, the delegates were 
 chosen by votes at a special election, and after 
 their work was completed it was submitted to the 
 qualified electors for their assent. The sense of 
 obligation felt by delegates engaged in the high 
 duty of framing the fundamental law is expressed 
 in the address issued by Mr. Bowdoin, the Presi- 
 
New States and Constitutions 261 
 
 dent of the Massachusetts constitutional con- 
 vention of 1779, enjoining upon the members of 
 the convention the exertion of their best abilities 
 in framing "a new and a good Constitution of 
 Government," and stating that "as the framing 
 it, and its acceptance, when framed, must greatly 
 depend on the collective wisdom of the Convention 
 being had, in the final determination on every 
 part of it, but which cannot be had without a 
 general and constant attendance, " he was directed 
 by vote of the convention "to enjoin upon the 
 members, from its necessity and importance, A 
 
 CONSTANT AND GENERAL ATTENDANCE accord- 
 ingly." 1 
 
 It is not to be wondered that a constitution so 
 framed should have remained to this day, with 
 but little amendment, as the living fundamental 
 law of the great Bay State. 
 
 In order to secure the widest possible popular 
 concurrence in the choice of delegates to the 
 Pennsylvania convention of 1777, commissioners 
 were appointed by the assembly 
 
 To go to the house or place of residence of each and 
 every freeman entitled to vote for members of Gen- 
 eral Assembly within their respective townships, 
 buroughs, wards or districts, or to take some other 
 opportunity of meeting with them, 
 
 to secure from every freeman, in writing, his vote 
 or answer to the proposition, which should be 
 
 1 Lobingier, pp. 172-3. 
 
262 The Changing Order 
 
 put in a box provided for the purpose and returned 
 to the general assembly. x 
 
 Unfortunately, the British invasion suspended 
 the carrying out of this rather novel but highly 
 commendable plan; but subsequently, by a more 
 orthodox method, delegates were chosen by 
 popular election who prepared the constitution 
 which remained the fundamental law of Pennsyl- 
 vania until 1838. 
 
 Framed, therefore, by delegates especially 
 chosen for the purpose, with the design of estab- 
 lishing a permanent and stable form of government, 
 until a recent date the constitutions of all the 
 States avoided detail, and laid down merely the 
 general outlines of the frame of government, within 
 whose limits details were to be supplied from time 
 to time by the Legislature constituted accord- 
 ing to its terms; and provisions were embodied 
 with respect to amendments, calculated to se- 
 cure deliberate, matured action, and especially to 
 require the active concurrence in the changes 
 proposed of an actual majority of the qualified 
 electors. 
 
 Jefferson's proposed constitution for Virginia 
 contained a provision that none of the fundamental 
 laws and principles of government should be re- 
 pealed or altered but by the personal consent of 
 the people, at meetings held in the respective 
 counties, the people of two thirds of the counties to 
 give their suffrage for any particular alteration. 2 
 
 1 Lobingier, p. 151. a Ibid., p. 146. 
 
New States and Constitutions 263 
 
 This Jeffersonian theory of making the alteration 
 of the constitution dependent not only upon a 
 certain percentage of the vote cast, but upon the 
 consent of a specified percentage of the geograph- 
 ical subdivisions of the State, as we have seen, 
 is embodied in the proposed constitution of New 
 Mexico. 1 The first constitution of Georgia re- 
 quired the consent of a majority of the counties 
 to any amendment. The Massachusetts consti- 
 tution of 1780 was to take effect upon a vote of 
 two thirds of the free whites voting upon it. 
 
 In general, the State constitutions prior to the 
 very recent ones, required the vote of at least a 
 majority, sometimes of two thirds of each of the 
 houses of the Legislature in favor of a proposed 
 amendment, sometimes at two successive sessions 
 of the Legislature, to be followed by submission 
 to popular vote and adoption by at least a majority 
 of all votes cast with respect to the proposition; 
 sometimes by a certain proportion of the entire 
 qualified electorate. There would seem to be 
 little use in choosing a convention of delegates to 
 carefully and painstakingly frame a constitution, 
 if, after adoption by popular vote, no stability or 
 degree of permanency is secured, but the funda- 
 mental law may be changed as readily as, and per- 
 haps more readily than an ordinary act of the 
 Legislature. The system which was the evolu- 
 
 1 This provision was attacked in Congress with such success 
 that the people of New Mexico were compelled to modify it 
 as a condition to admission into the Union (see 37 Stats., 
 vol. i., p. 39; vol. ii., p. 1723). 
 
264 The Changing Order 
 
 tion of American growth and institutions; the dis- 
 tinctively American plan of government under 
 fundamental law, framed with a view to its con- 
 tinuance unless changed with equal solemnity, 
 is absolutely at variance with the new scheme of 
 government by initiative, referendum, and recall 
 embodied in the constitutions of Oklahoma and 
 Arizona: a scheme which, as Mr. Bryce has pointed 
 out in The American Commonwealth , x first made 
 its appearance in modern Europe as a provision 
 of the French constitution framed by the national 
 convention in 1793, and which has peculiarly 
 flourished as a feature of the government of 
 Switzerland. 2 The real question presented is 
 whether or not all the people shall be governed 
 by representatives chosen for the purpose in an 
 orderly, regular way, acting in accordance with a 
 well-matured fundamental law, adopted by the 
 active concurrence of at least a majority of the 
 adult male population; or by casual minorities 
 acting without direct responsibility, under the hap- 
 hazard system of initiative or referendum. 
 
 By the constitution of Oklahoma, suffrage is 
 restricted to male citizens, except at school dis- 
 trict elections or meetings; and by a recent con- 
 stitutional amendment 3 adopted in deliberate 
 disregard of its solemn compact with the United 
 
 1 Vol. i., p. 465. 
 
 9 2 Dodd, Modern Constitutions, p. 258. 
 
 3 Amendment as section 4A of Article 3 of Constitution Session 
 Laws, 1910, p. 285. See also Atwater v. Hassett, in Pacific 
 Rep., 812. 
 
New States and Constitutions 265 
 
 States, all negroes have been, in effect, disfran- 
 chised; so that out of a total population of 1,414,- 
 042 (according to the 1907 census), not exceeding 
 334,035 white males of the age of twenty-one 
 years and upwards are permitted to vote. Fifteen 
 per cent, of this number, or 50,105 electors, may 
 set in motion a proposition to amend the funda- 
 mental law, which will become effective if ap- 
 proved by a majority of those voting on the 
 proposition, no matter how small a percentage 
 of the whole population or of the qualified voting 
 population that number may be. 
 
 The proposed constitution of Arizona also re- 
 stricts the suffrage to male citizens of the United 
 States of the age of twenty-one years or over, who 
 shall have resided in the State one year immedi- 
 ately preceding the election (Art. VII., sec. 2), so 
 that, out of a total population of 204,354, according 
 to the last census, not exceeding 45,323 white males 
 of twenty-one years and upwards are permitted to 
 vote. Fifteen per cent, of this number, or 6799 
 electors, may set in motion a proposition to amend 
 the fundamental law, which will become operative 
 if approved by a majority of those voting on the 
 proposition, — no matter how small that number 
 might be. 
 
 In other words, under the scheme of govern- 
 ment proposed in the constitution of Arizona, as 
 in that of Oklahoma, all the fundamental rights of 
 person and property which are not specifically 
 guaranteed and secured by the Constitution of 
 
266 The Changing Order 
 
 the United States, but which are left as the sub- 
 jects of State concern — such as the right of religious 
 toleration — are at the mercy of a small minority 
 of the population. Of course, it may be said that 
 eternal vigilance is the price of liberty, and that 
 citizens who fail to assert their rights and to be 
 vigilant in their protection, cannot complain if 
 they find them undermined, impaired, or destroyed. 
 Professor Lobingier argues that statutes which 
 require the concurrence of a majority of the 
 electors in constitutional changes should be con- 
 strued so as to require only the consent of a 
 majority of those voting on a proposition — not a 
 majority of all the electors. He says: 
 
 From the standpoint of public policy, however, it 
 would seem that those decisions are soundest which 
 construe the language wherever possible as requiring 
 only a majority of those actually participating in the 
 vote on the submitted proposition. To declare a 
 constitution or amendment rejected by reason merely 
 of the indifference of those who, while in attendance 
 at the polls, are so unmindful of the privilege of 
 popular ratification as to neglect its exercise when 
 opportunity offers, is certainly to impair its benefits 
 and often to impair its employment when not 
 needed. 1 
 
 But if the constitution is the expression of the 
 will of the whole people, is it not rather to be 
 presumed that, if a majority of the people really 
 feel that a change in the fundamental law is 
 
 1 The People's Laws, p. 330. 
 
New States and Constitutions 267 
 
 necessary, they will affirmatively so express them- 
 selves? Let it be necessary to secure the vote of 
 an actual majority of the qualified votes to a 
 proposed constitutional amendment, and, if the 
 change is really desirable in the interest of all the 
 people, that fact will be made manifest, and 
 the vote will be secured. The anxiety of the ad- 
 vocates of the referendum, initiative, and recall to 
 have them operative at the instance of small 
 minorities of a restricted electorate, furnishes 
 abundant evidence that it is they — not those who 
 oppose these innovations — who do not trust "the 
 people" or even a majority of the people; but 
 that, under the guise of serving the people, they 
 are seeking to lay hands on the power of the 
 people and to arrogate to themselves the popular 
 tribunate. 
 
 Bearing in mind the practical workings of 
 everyday life in a busy, prosperous, commercial 
 community, it is apparent that a large number of 
 the community, generally the most productive 
 portion of the community, do not, and cannot, 
 give constant attention to the affairs of govern- 
 ment. Under a scheme of government such as 
 that proposed in the Arizona constitution, a small 
 minority of the qualified electors organized to 
 accomplish any particular purpose can mold 
 the laws, and the constitution, to accomplish 
 their purposes before the great majority of the 
 electors are even aware of what is going on. The 
 propositions submitted to the electors under the 
 
268 The Changing Order 
 
 scheme of initiative and referendum are fixed, and 
 put before the voters without the advantage of 
 the examination, discussion, and debate which have 
 been, throughout the whole history of English- 
 speaking peoples, the crucible in which legislative 
 projects have been tried out before enactment into 
 law. It is an abuse of language to call such a 
 scheme of government "popular." It is an at- 
 tempt to create a government of all the people, 
 by a minority of the people, for a small minor- 
 ity of the people. To adopt it, would be to sub- 
 stitute for the institutions which are the growth 
 and evolution of centuries of English and American 
 experience, the devices of French revolution and 
 Swiss socialism. 
 
XIII 
 
 THE THEORY OF CONSTITUTIONAL GOV- 
 ERNMENT IN 1787 AND IN 1912 1 
 
 ON December 12, 1787, by the decisive vote 
 of 46 to 23, Pennsylvania, the second of the 
 States to take such action, solemnly expressed its 
 concurrence in the new charter, which created a 
 nation of what theretofore had been a mere confed- 
 eration of separate sovereignties. Immediately 
 after the result was known, as the chronicle of the 
 time tells us, 
 
 the convention (accompanied by his excellency the 
 President, the Vice-President, and the members of 
 the Supreme Executive Council ; also by several mem- 
 bers of Congress, the faculty of the University, the 
 magistrates and militia officers of the City) went in 
 procession to the Court House, where the ratifica- 
 tion of the Constitution of the United States was read, 
 amidst the acclamations of a great concourse of citi- 
 zens. A detachment of the militia train of artillery 
 (in uniform) fired a federal salute, and the bells of 
 Christ Church were rung on this joyful occasion; 
 
 1 Address at the Annual Banquet of the Pennsylvania Society 
 in the city of New York, December 14, 1912. 
 
 269 
 
270 The Changing Order 
 
 after this, the Convention returned to the State House 
 and subscribed the two copies of the ratification. At 
 three o'clock they met and dined with the members 
 of the Supreme Executive Council, several members 
 of Congress and a number of citizens, at Mr. Epple's 
 tavern ; where the remainder of the day was spent in 
 mutual congratulations upon the happy prospect of 
 enjoying once more, order, justice and good govern- 
 ment in the United States. 
 
 The lead of Pennsylvania was rapidly followed 
 by the other States, and more than the requisite 
 number having ratified the Constitution, on July 
 4, 1788, the twelfth anniversary of the Declaration 
 of Independence, the good citizens of Pennsyl- 
 vania celebrated with joyful hearts the adoption 
 of that Constitution which they believed would 
 "form a more perfect union " than the Con- 
 federation of the States had been, and would 
 "establish justice, insure domestic tranquillity, 
 provide for the common defence, promote the 
 general welfare, and secure the blessings of 
 liberty" to the people of the United States and 
 their posterity. 
 
 The new charter of government was not adopted 
 without opposition. In Pennsylvania, as else- 
 where, there was a considerable minority who 
 fought against it until the last moment. Their 
 objections were, in effect, first that the consolida- 
 tion of powers in the new government would be de- 
 structive of the States ; second, that the separation 
 of the executive, legislative, and judicial powers 
 
Constitutional Gov't in 1787 and 191 2 271 
 
 of government was not complete; and, third, and 
 above all, that the Constitution contained no bill 
 of rights. The fifteen amendments proposed in 
 the Pennsylvania convention by Mr. Whitehill 
 contained in substance those which were sub- 
 sequently formulated and proposed to the legis- 
 latures of the several States by the first Congress, 
 and which, having been ratified by the requisite 
 number of States between September, 1789, and 
 December, 1791, became the first ten amendments 
 to the Constitution. Their adoption removed 
 practically every serious objection which had 
 been urged against the Constitution, and left it as 
 the expression of the will of the whole people. 
 With the exception of the nth Amendment, which 
 became effective January 8, 1798, adopted to relieve 
 the wounded susceptibilities of the States, follow- 
 ing the decision in the case of Chisholm against the 
 State of Georgia, that the Federal courts had 
 jurisdiction under the Constitution of suits by 
 citizens against the States; and the 12th Amend- 
 ment, which took effect September, 1804, modify- 
 ing the provisions of Article II. so as to provide for 
 specific and separate votes for President and 
 Vice-President in the Electoral College and in the 
 Congress, no amendments to the Constitution were 
 adopted until the 13th, 14th, and 15th Amend- 
 ments which followed the Civil War, and which 
 embodied the results of a contest respecting 
 slavery, which, admittedly, had been left unsettled 
 by the framers of the Constitution, because then 
 
272 The Changing Order 
 
 incapable of solution, and which could only be 
 settled by the arbitrament of war. 
 
 Of the government under this Constitution, 
 Daniel Webster said, in 1850: 
 
 We have a great, popular, constitutional govern- 
 ment, guarded by law and by judicature, and de- 
 fended by the affections of the whole people. No 
 monarchical throne presses these States together, no 
 iron chain of military power encircles them; they 
 live and stand under a government popular in its form, 
 representative in its character, founded upon prin- 
 ciples of equality, and so constructed, we hope, as to 
 last forever. 
 
 It did survive one of the greatest internecine 
 struggles recorded in history. The war amend- 
 ments to it, perpetuated the removal of slavery 
 from the permissible domestic institutions of the 
 States, and imposed restrictions upon State 
 action concerning individuals, which, in effect, 
 extended as limitations upon the powers of the 
 States, some of the provisions of the Bill of Rights, 
 which the first ten amendments had made restric- 
 tive upon the national legislature. 
 
 The establishment of this Constitution and the 
 growth and development of the national govern- 
 ment under it, for a century commanded the pride 
 of Americans and the admiration of the world. 
 Every new citizen was required by law, as he still 
 is, to declare his attachment to its principles; 
 every officer of the government to swear that he 
 
Constitutional Gov't in 1787 and 1912 273 
 
 would support and defend it. The Constitution 
 was the Ark of the American Covenant, and the 
 author of The American Commonwealth, writing 
 in 1888, said that reverence for it "is itself one of 
 the most wholesome and hopeful elements in the 
 character of the American people." 
 
 The one hundredth anniversary of its adoption 
 was celebrated in 1889, with joyful festivities 
 throughout the United States, and paeans were sung 
 in all parts of the country in praise of the great 
 men whose wisdom and patriotism and prescience 
 had framed for a little confederation of thirteen 
 States, containing but three millions of people, 
 a charter of government adequate to the growing 
 needs of a compact nation of thirty-six States with 
 a population of seventy millions or more. 
 
 Perhaps in the very excess of this praise is to be 
 found the first germ of that analysis and criticism 
 which has resulted in a modern school of political 
 thought which finds little in the Constitution 
 to praise, much to criticize, and a great deal to 
 alter. It was because certain Athenians became 
 tired of hearing Aristides called "The Just" 
 that they united in the movement to ostracize 
 him; and the constant and extreme assertions of 
 the excellences of the Constitution perhaps have 
 led men to charge it with responsibility for con- 
 ditions which might have arisen under any con- 
 stitution, and, without stopping to consider whether 
 or not those evils had any necessary connection 
 with the mere form and structure of government, 
 
 IS 
 
274 The Changing Order 
 
 to make it the goat upon which to load responsi- 
 bility for all the political sins which had become 
 odious to the people. 
 
 The author of The American Commonwealth 
 was too wise a student of political history to be 
 misled by the chorus of gratulation which Ameri- 
 cans were singing when he was writing the first 
 edition of that great work, and they were celebrat- 
 ing the hundredth anniversary of the adoption of 
 the Constitution. 
 
 I might plead [he wrote] that America changes so 
 fast that every few years a new crop of books is 
 needed to describe the new face which things have put 
 on, the new problems that have appeared, the new 
 ideas germinating among her people, the new and 
 unexpected developments for evil as well as for good 
 of which her established institutions have been found 
 capable. 
 
 But I doubt whether even that sagacious ob- 
 server of our national affairs could have foreseen 
 how rapid would be the change in the attitude of a 
 large part of the American people towards their 
 constitutional institutions which has taken place 
 since 1887. Then, the Constitution was praised 
 because of the nice distribution of the legislative, 
 executive, and judicial powers of government 
 provided for in it; separate in the independence 
 of their functions, but correlated by the partici- 
 pation of the individual representatives of one 
 branch in the exercise of some of the functions of 
 
Constitutional Gov't in 1787 and 191 2 275 
 
 the others. To-day, a school of thought, number- 
 ing many adherents, maintains that all constitu- 
 tions founded on the separation of powers are weak 
 and ailing, and that, as a matter of fact, the doc- 
 trine of the separation of powers of government is 
 the prime cause of the corruption of American 
 politics; that its scheme is not made for, and 
 is not susceptible of, conversion to democratic 
 use. 
 
 The Constitution was praised as providing ade- 
 quate checks and balances to prevent the destruc- 
 tive results of the sudden, uninformed impulse of 
 the people; but the modern doctrine is that the 
 system of checks and balances exists for the pur- 
 pose of preventing the people's rule; that the 
 impulses of the people are never uninformed, and 
 their actions are always just. 
 
 Democracy [the late E. L. Godkin once wrote] really 
 means a profound belief in the wisdom as well as the 
 power of the majority, not on certain occasions, but 
 at whatever time it is consulted. 
 
 The progressive democracy of to-day extends 
 the same principle to casual majorities of those 
 voting on any question, however small a propor- 
 tion of the whole electorate, and imputes to them 
 impeccable and — temporarily, at least — conclu- 
 sive wisdom. This is a very recent development 
 of democratic theory. Only twenty-two years 
 ago, Mr. Grover Cleveland, speaking of the framers 
 of the Constitution at the centennial anniversary 
 
276 The Changing Order 
 
 of the organization of the Supreme Court of the 
 United States, said: 
 
 Though bitter experience had taught them that the 
 instrumentalities of government might trespass upon 
 freedom, and though they had learned in a hard school 
 the cost of the struggle to wrest liberty from the 
 grasp of power, they refused, in the solemn work they 
 had in hand, to take counsel of undue fear or distract- 
 ing perturbation, and they calmly and deliberately 
 established as a function of their government a check 
 upon unauthorized freedom and a restraint upon 
 dangerous liberty. 
 
 To-day the junior Senator from Oklahoma, per- 
 haps the most prominent exponent of the new 
 so-called Code of the People's Rule, tells us that the 
 system of checks and balances was established by 
 the Federalists for the purpose of putting an end 
 to popular rule, and should be done away with — 
 as it has been under the constitution of his State, 
 and by those of a number of other States adopted 
 during the last dozen years. 
 
 The Constitution was long praised for the repre- 
 sentative character of the government which it 
 established: but the modern theory is that repre- 
 sentatives of the people cannot be relied upon to 
 carry out the people's will, and that the people 
 must themselves, therefore, by direct action, make 
 their own laws, and directly control the execution 
 of those laws by the officials of their government. 
 
 The constitutional theory of government was, 
 
Constitutional Gov't in 1787 and 191 2 277 
 
 that the people should choose by popular vote 
 representatives who should be entrusted with ample 
 powers, and given a reasonable time within which 
 to work out the results which should justify them- 
 selves to the people when they were thoroughly 
 informed concerning them. The recent ' ' popular ' ' 
 theory is that the representatives be given but little 
 power, their actions be directly circumscribed by 
 minute restrictions, their work be subject at all 
 times to direct interference by popular vote, and 
 themselves subject to summary removal from office 
 at the instance of a small minority of the people, 
 and upon the vote of a bare majority of a perhaps 
 equally small minority. 
 
 The objection which weighed most with the 
 people when the Constitution was under considera- 
 tion, was that it contained no Bill of Rights; and 
 the prompt adoption of the first ten amendments 
 evidenced the jealous determination of the people, 
 by a distinct declaration of limitations upon the 
 power of government over the individual citizen, 
 to protect the humblest as well as the most power- 
 ful individual against the abuse of power. These 
 provisions were, however, only limitations upon 
 the powers of the national government itself. 
 After the Civil War, a belief in the necessity of 
 protecting the freedmen and their descendants 
 against invasion of their newly established right 
 to liberty, led to the extension of the same prin- 
 ciples against action by the States, through the 
 adoption of the 14th Amendment. But as Judge 
 
278 The Changing Order 
 
 Swayze has pointed out in his admirable review 
 of the subject in a recent Harvard Law Review: 
 
 The fourteenth amendment does not protect the 
 citizen against alleged cruel and unusual punishment 
 under State authority, nor secure trial by jury in civil 
 or criminal cases, nor the right to bear arms, nor 
 immunity from prosecution except after indictment 
 by a grand jury, nor the right to be confronted by 
 witnesses. In these respects the federal bill of rights 
 restricts the federal tribunals only — 
 
 and for protection in those respects the citizen 
 is still wholly dependent upon the institutions of 
 his State. 
 
 Bills of Rights were — and still are — common to 
 the organic laws of almost every State. They 
 were made effective — until recently — by provisions 
 against amendment, except by so large a vote as 
 to clearly evidence the change to be the deliberate 
 judgment of the whole people. They, and the Bill 
 of Rights embodied in the Federal Constitution, 
 constitute what Senator Root has so eloquently 
 described as the 
 
 covenant between overwhelming power and every 
 weak and defenseless one, every one who relies upon 
 the protection of his country's laws for security to 
 enjoy the fruits of industry and thrift, every one who 
 would worship God according to his own conscience, 
 however his faith may differ from that of his fellows, 
 every one who asserts his manhood's right of freedom 
 in speech and action — a solemn covenant that between 
 
Constitutional Gov't in 1787 and 1912 279 
 
 the weak individual and all the power of the people, 
 and the people's officers, shall forever stand the eternal 
 principles of justice, defined and made practically 
 effective by specific rules in those provisions which 
 we call the limitations of the Constitution. 
 
 But the new school rejects as unworthy all such 
 limitations upon the immediate popular exercise of 
 power, and reduces Bills of Rights to mere counsels 
 of perfection. It abandons all ideas of permanency 
 in the fundamental law. The constitution is to be 
 changed as lightly as are codes of legal procedure. 
 In Oregon, for example, its constitution was not 
 changed between 1859 and 1902 — a period of forty- 
 three years . B et ween 1 902 and 191 o — eight years 
 — it was amended twelve times. This constitution 
 tinkering is the inevitable result of reducing con- 
 stitutions to the category of statutes. Especially 
 does the new school object to the American prin- 
 ciple of judicial determination of whether or not 
 a given legislative act falls within or exceeds the 
 limitations set by the constitution upon legislative 
 power, and seeks instead to submit to the deter- 
 mination of a temporary popular majority the 
 making, the constitutionality, the interpretation, 
 and the enforcement of laws. 
 
 To accomplish these ends, constitutions have 
 been adopted in a number of States which intro- 
 duce those institutions known as the initiative and 
 the referendum in lawmaking, the recall of officials 
 of government by popular vote, the imperative 
 mandate to public bodies and officials, and other 
 
280 The Changing Order 
 
 provisions tending to pure democracy, taken largely 
 from the institutions of Switzerland. These new 
 constitutions are become, in effect, elaborate stat- 
 utes, repealable and alterable by a majority of 
 those voting upon propositions to change them, set 
 in motion by a small percentage of the electorate. 
 Senator Owen, in his The Code of the People's 
 Rule, says: 
 
 Reports of the favorable workings of such a system 
 in Switzerland began to be published in this country 
 in 1 89 1. The following year there were declarations 
 for the system by the American Federation of Labor 
 and the Knights of Labor, while the newly organized 
 People's Party, which had absorbed the Farmers' 
 Alliance, recommended that the subject be studied. 
 
 The advantages of the new system to the ac- 
 complishment by large, well-organized bodies of 
 particular classes of men, of changes in govern- 
 ment sought in the interests of such classes, are 
 apparent, and the organizations referred to quickly 
 saw in this new governmental machinery an op- 
 portunity to increase their influence in legis- 
 lation, and their power to mold governmental 
 action to their own advantage. To the well- 
 directed and systematic efforts of those associa- 
 tions may be attributed, in large measure, the 
 astonishing progress made in the adoption of the 
 new system in many of the States. The system 
 lends itself easily to the establishment of class 
 government. 
 
Constitutional Gov't in 1787 and 1912 281 
 
 But that fact alone would not adequately explain 
 the rapid extension of the Swiss institutions in the 
 United States. 
 
 The initiative and referendum with respect to 
 legislation, in varying forms, have been adopted in 
 at least seventeen States; the unlimited recall of 
 public officials in six, and movements looking to 
 the profound modification of the fundaments of 
 State government are mooted in others. The 
 independence of the judicial establishment has 
 been destroyed by an elective judiciary with short 
 terms of office and small salaries, subject to sum- 
 mary removal from office by popular vote; and a 
 Senator of the United States has recently proposed 
 an amendment to the Constitution of the United 
 States which would make the correct interpretation 
 of statutes the subject of popular vote, in the face 
 of judicial exposition. These tendencies cannot 
 be ignored, because too many people have given 
 their adherence in some degree to them; and it 
 becomes the patriotic duty of every citizen to 
 analyze carefully the causes of the discontent with 
 existing political and social conditions, which has 
 led to the adoption of these modifications in our 
 constitutional scheme, as remedies necessary to 
 the public welfare in the eyes of those who have 
 espoused them, and to endeavor, if possible, to 
 meet those evils, without destroying a fabric of 
 government which has so long and so well served 
 the needs of American civilization. 
 
 Discontent with the existing order of things, as 
 
282 The Changing Order 
 
 Mr. Lowell once said, "pervaded the atmosphere 
 wherever the conditions were favorable, long 
 before Columbus, seeking the back door of Asia, 
 found himself knocking at the front door of Amer- 
 ica. ' ' And he added : 
 
 I say wherever the conditions are favorable, for it 
 is certain that the germs of disease do not stick or 
 find a prosperous field for their development and nox- 
 ious activity unless where the simplest sanitary pre- 
 cautions have been neglected. ... It is only when 
 the reasonable and practicable are denied that men 
 demand the unreasonable and impracticable; only 
 when the possible is made difficult that they fancy 
 the impossible to be easy. 
 
 One of the principal exponents of this new demo- 
 cratic movement ascribes to "machine rule" in 
 politics the cause of all the evil which, in his opin- 
 ion, can only be cured by the adoption of the 
 scheme of government embodied in the initiative, 
 referendum, recall, imperative mandate, direct 
 election of senators, etc., and he gives to our dis- 
 tinguished guest of this evening, Mr. Bryce, the 
 credit for having first formulated in a word-picture 
 the whole evil institution known as "the Machine," 
 in the first edition of his great work on The 
 American Commonwealth — a work which, from 
 the moment of its publication, has been the most 
 complete, the most authoritative, and the most 
 just description of the political and social institu- 
 tions of this country thus far written. It was the 
 
Constitutional Gov't in 1787 and 191 2 283 
 
 lifting of the veil in this book, and its widespread 
 sale, Senator Owen says, that, together with other 
 reform literature, "created a mighty reform sen- 
 timent, which, combined with startling exposures 
 of the machine-rule system year after year, has 
 produced far-reaching results." 
 
 The evils of machine rule, arose largely by reason 
 of the apathy of the individual voter and the 
 dormant condition of the public conscience. It 
 was because reasonable and practicable reforms 
 in party government were denied by those who 
 profited by it, that the extreme changes in our 
 governmental system have been so enthusiastically 
 adopted. The "machine/' in its most offensive 
 sense, and the "boss," or political leader who 
 directed its operations, were nourished upon the 
 spoils system, which, to a large extent has been 
 removed, by reforms in the civil service of the 
 Nation and the States, under which the merit 
 system of appointments to public office and a 
 security of tenure have been established. The 
 machine, too, was nourished by the management 
 of large contributions for campaign purposes, 
 made by corporations and representatives of 
 interests seeking undue advantages in legislation 
 and governmental action. But that evil has been 
 greatly restricted by various acts of Congress and 
 of the State legislatures; measures whose enact- 
 ment was compelled by public sentiment, in most 
 cases without resort to "initiated" or "referred" 
 legislation. It is entirely possible by further 
 
284 The Changing Order 
 
 legislation to utterly extirpate it. These con- 
 cessions however, were made grudgingly and 
 slowly; and the popular determination that they 
 should be permanent, found expression in the 
 adoption of the new institutions held out as 
 furnishing a means of perpetuating the reforms 
 and preventing a recurrence of the evils. Worthy 
 citizens, impatient at the slowness of reform un- 
 der constitutional restrictions, turned to the new 
 institutions as a patient longing for speedy cure 
 turns from the regular practitioner to a quack 
 doctor. 
 
 That the remedy may be worse than the disease 
 is a reasonable apprehension. Nearly a century 
 ago, Chief Justice Marshall pointed out the dan- 
 gers of putting too many things in a constitution : 
 
 A constitution to contain an accurate detail of all 
 the subdivisions of which its great powers will admit 
 and of all the means by which they may be carried 
 into execution, would partake of the prolixity of a 
 legal code, and could scarcely be embraced by the legal 
 mind. It would probably never be understood by the 
 public. Its nature requires, therefore, that only its 
 great outlines should be marked, its more important 
 objects designated, and the minor ingredients which 
 compose these objects be deduced from the nature of 
 the objects themselves. 
 
 But the great Chief Justice was speaking of a 
 constitution founded upon confidence that the 
 people as a whole would be vigilant in the exercise 
 
Constitutional Gov't in 1787 and 1912 285 
 
 of their political rights and duties, and that they 
 could and would entrust the powers of their gov- 
 ernment to those whom they trusted, and who 
 would worthily discharge that trust. The mod- 
 ern changes in government are framed in a pro- 
 found distrust of those who are to exercise the 
 powers of the State; and the vast detail of the 
 new constitutions, the enormous number of 
 elective offices created by them, the shortness of 
 terms, and the uncertainty of tenure, only empha- 
 size the same point of view. No government so 
 founded and so maintained can long exist. 
 
 It is, I think, safe to say that every one of the 
 evils of modern politics is susceptible of removal 
 within the limits of our established forms of 
 constitutional government, without destruction of 
 its representative republican character. Party 
 machinery is, of course, wholly unrestricted by the 
 framework of the Constitution. But the needed 
 reforms cannot be accomplished and perpetuated, 
 on the one hand, by any short cut to political 
 happiness, such as reformers eager for popular 
 applause would suggest; nor, on the other hand, 
 without the abandonment by every citizen of that 
 apathy which results, in the face of even a clam- 
 orous public campaign, in less than a majority of 
 the electorate voting upon propositions to radically 
 change the fundamental law of a State. Above 
 all, there is no easy way of securing good govern- 
 ment. The virtuous citizen who thinks he can 
 secure political Utopia by merely signing a postal 
 
286 The Changing Order 
 
 card or a petition, may some day awaken to the 
 discovery that he has lost all that makes for 
 stability in government and the maintenance of a 
 right to life, liberty, and the pursuit of happiness. 
 In the Pennsylvania Gazette for December 26, 
 1787, is printed a letter from a correspondent 
 answering certain objections which had been 
 made to the new Constitution by Mr. Mason. It 
 concludes with this exhortation: 
 
 I entreat you, my fellow citizens, to read and 
 examine the new Constitution with candor, examine 
 it for yourselves; you are most of you as learned as 
 the objector, and certainly as able to judge of its 
 virtues or vices as he is. 
 
 In the same paper is printed a despatch from 
 Boston, announcing the selection of delegates to 
 the constitutional convention from Massachusetts, 
 which closes with the statement that there could 
 be no doubt of the adoption of the new Constitu- 
 tion "provided that a spirit of candor, concession, 
 and an openness to conviction should pervade the 
 minds of the delegates chosen for the Convention. " 
 
 In like manner I entreat you, my fellow-citizens, 
 to carefully consider the causes for that discontent 
 which has caused so large a number of our fellow- 
 citizens to turn from those institutions of govern- 
 ment which are peculiarly American, and which 
 were framed by the most ardent lovers of liberty — 
 liberty regulated under law — who ever lived in 
 any land, in any time. Consider them; and weigh 
 
Constitutional Gov't in 1787 and 191 2 287 
 
 and examine the advantages and the disadvantages 
 of the proposed remedies; consider whether the 
 evils may not be cured without the destruction of 
 our traditional institutions; examine all this in a 
 spirit of candor, concession, and openness to con- 
 viction; and as the writer from whom I have 
 quoted said, in closing his letter in December, 1787 : 
 
 God grant that prejudice may not make us blind to 
 our best interest. 
 
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