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The Beef Trust Case

SATURDAY, JANUARY 14, 1905

Last week Attorney-General Moody submitted to the United States Supreme Court the Government's brief in the so-called Beef Trust case. It arraigns members of the alleged combination for violation of the Anti-Trust Act, contending that the methods of the trust stifle competition and restrain trade in fresh beef. The Attorney-General admits that judges have differed as to the validity of aggregations of capital effected by some form of organic union among several smaller and competing corporations, and that economists are far from agreeing that such aggregations, within limitation, are hurtful. But, asks Mr. Moody, has a responsible voice yet been heard to justify, legally or economically, a conspiracy or agreement among nearly all the producers of a commodity necessary to life, by which the confederates acquire absolute control and dominion over the production, sale, and distribution of that commodity throughout the entire territory of a nation, with the power at will to raise prices to the consumer of the finished product and lower prices to the producer of the raw material? Mr. Moody claims that there is a conspiracy to control the market for fresh meats in the Nation, that it does control it, that its control is merciless and oppressive. These points were developed in his argument on Monday of this week before the Court. If this is evident to all men, the question then is, Does the Government's petition discover that conspiracy to the Court? The attorneys for the Beef Trust reply that the business of the defendants of purchasing live stock and selling the fresh meats produced therefrom is not inter-State or foreign commerce. They further contend that the sales are made with a view to the goods being transported by the buyer's agent to another State, after the sale and delivery are fully completed.

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That this does not make the sale inter-
State commerce has been, according to
some legal authorities, already settled in
the famous Sugar Trust case, decided
against the Government by the Supreme
Court in 1895. The present case, how-
ever, has also certain features in common
with the Freight Association and Traffic
cases already passed upon by the
Supreme Court. They would indicate i
that restraint of trade is not to be tested
by the prices resulting from the com-
bination so much as by the lack of com-
petition resulting therefrom. Whatever
combination has the direct and neces-
sary effect of restricting competition is,
within the meaning of the Anti-Trust Act,
as now interpreted, a restraint of trade.
On this point Mr. L. F. Swift, President
of Swift & Co., one of the largest cor-
porations in the so-called Beef Trust,
has made the following statement: "The
reports in circulation about the Beef
Trust' are without foundation. There
is absolutely no conspiracy or combina-
tion to control either the purchase of
live stock or the sale of meats or pack-
ing-house products; on the other hand,
the packing industry is subject to the
severest kind of competition both in
buying and selling, and the per cent. of
profit on sales in the packing-house in-
dustry is less than in any other line of
business."

The Merchant Marine
Report

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Last week the Merchant Marine Commission submitted its report to Congress. This Commission is composed of five Senators and five Representatives. It was created at the last session of Congress, in response to President Roosevelt's recommendation in his Message of December, 1903. The Commission has made an exhaustive investigation of the condition of our merchant marine in order to ascertain the most feasible means for its development;

hearings have been given at nearly all the important shipping and commercial centers. The Commission has agreed upon a bill the chief features of which are: (1) The creation of a naval volunteer service; (2) the encouragement of apprentices on ships in foreign trade; (3) subsidies for carrying mails from Atlantic coast and Gulf of Mexico ports to Central and South America, and from Pacific Coast ports to Japan, China, the Philippines, Mexico, and Central America; (4) annual subventions of five dollars a gross ton; (5) a tonnage tax on foreign vessels entering United States ports. It is probably true, as the Commissioners' report says, that an adequate American ocean fleet might mean the saving to this country of a hundred million dollars a year, a sum which now goes to build up the naval strength of European nations and Japan; that this country has deepened its harbors at an expense of many millions, largely for the benefit of foreign steamships; that the subsidies and bounties bestowed on most of the merchant fleets of foreign Governments are a handicap on American shipping. The question is, however, Can the action by Congress, as outlined above, prevent the paralysis of our shipping interests? As a first step in their rehabilitation, the proposition to create a force of naval volunteers composed of the best officers and men of our merchant ships and deep-sea fishing-vessels is attractive; not more than twenty thousand American citizens, however, are included in the enrollment of employees on all the American vessels on salt water which go out of sight of land. The section relating to apprentices will also excite some favorable comment, as will the proposition not to amend the present ocean mail act, except as to the new routes to be established and the new requirement as to naval volunteers.

The proposed subvention of five dollars a gross ton certainly sounds better than the proposition made in the Frye bill last year, because, if favors are to be given, they should be given to the useful, hard-working ship of steam and sail the unit of ocean society-rather than to the swift and expensive steamship. But subvention is only a euphemism for subsidy, and, in our opinion, the majority

of Americans are opposed to steamship subsidies. The last feature of the bill, increasing the tonnage taxes on all vessels, American and foreign, now entering the United States ports, in the foreign trade, might be justified as a revenue-raising measure, but how any legislation making it more difficult for ships to enter our ports is going to increase American commerce is not easy to understand. The whole scheme is an improvement on the ship subsidy bill of last year, but it is, after all, formed on the same artificial model. The true method for increasing our commerce is to enact a law which would give to our people a chance to build or buy ships where they please and to man them regardless of nationalities.

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State is the latest and most startling outcome of the investigation into public land frauds which the Government has long been carrying on. The subject was discussed with vigor and plain speaking by Secretary Hitchcock, of the Interior Department, in his recent annual report, summarized in these columns. The charges against Senator Mitchell are that he has conspired with or aided persons or companies to exchange practically worthless land, to which they had procured title, for valuable tracts. was accomplished, it is asserted, by getting the worthless lands included in governmental forest reserves and thus gaining the legal right to make new selections in exchange. With Senator Mitchell was indicted Mr. Hermann, formerly Commissioner of the General Land Office and now a Representative from Oregon. from Oregon. Other important indictments are reported to be pending. Specifically, Mr. Mitchell is charged with accepting a bribe of $2,000 for expediting fraudulent claims, while Mr. Hermann, it is alleged, misused his power in the Land Office to aid land-thieves and deliberately suppressed evidence of fraud submitted to his bureau. It would be improper to form an opinion as to these charges until they have been passed upon by the Federal courts, and

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dence accuses Mr. Morton and President Ripley, of the Santa Fé Railway, of what is practically swindling. The animus of the "Post's" charge is indicated by its reference to Mr. Morton as having been "advertised as President Roosevelt's handy man in promoting legislation to regulate railway rates." The actual facts of the matter, as they have been brought out so far, are these: The Caledonian Coal Company, of Gallup, New Mexico, has brought before the Inter-State Commerce Commission a charge against its competitor, the Colorado Fuel and Iron Company, that the latter corporation and the Santa Fé Railway have entered into a conspiracy to ruin it. In the first hearing at Chicago the Caledonian Coal Company stated its case at length, making charges under the direction of its attorney. The Atchison, Topeka, and Santa Fé Railway has not yet had the final opportunity of making a reply to those charges, although Mr. E. P. Ripley, President of the Santa Fé Railway, has publicly asserted that the railroad's action in the matter was "right legally and morally." There is to be another hearing on the action, at which the authorized statements of President Ripley and Secretary Morton will be made. Waiting for this authorized hearing, Secretary Morton has, wisely in our opinion, persistently declined to say anything, and now refuses to be quoted. Secretary Morton personally believe that his position has been entirely misrepresented, and that this will be shown by the final hearing before the Inter-State Commerce Commission. They assert that no officer of the Santa Fé Railway has taken any action which is not entirely within the Inter-State Commerce Law. We advise our readers to suspend all judgment and even all opinion regarding Secretary Morton's alleged responsibility for giving illegal rebates until he has had an opportunity of making his answer to the charges before the Commission. The incident, for we regard it as an incident, lends an especial interest to Secretary Morton's article in this issue, which is the only authorized statement that we have so far seen of his personal attitude on the subject of railway rates.

Those who know

In the appointment of Indian Wrongs Francis E. Leupp as Commissioner of Indian Affairs the reservation tribes of the Northwest see hope for a full and fair hearing of the complaints which they have been urging upon the authorities at Washington for the past ten years or more, and which are alleged to have been pigeonholed or to have received no more than perfunctory attention. Already the Bad River band of Chippewa Indians, whose affairs are administered from the La Pointe agency at Ashland, Wisconsin, have drawn up a petition reciting the wrongs inflicted upon them; the chief allegation is that they are being systematically defrauded by the Agent and his assistants, in collusion with one of the large lumber companies. It is the old, old story of trespass upon the Indians' lands, the appointment by the Agent of men to scale the sold timber who are also employees of the lumber company, of extortion and usury and misuse of funds, and of first or advance payments being made only in coupons redeemable at the store of the lumber company. It is specifically recited that the Agent has stock in one of the subsidiary concerns of the lumber company, and that he has loaned to the last named, without authority of law, undistributed sums belonging to the individual Indians aggregating about $200,000, a part of which draws no interest and the remainder not more than three per cent., without security; and it is pointed out that one of his assistants or "farmers" has in ten years, on a salary of $720 per annum, amassed from thirty to forty thousand dollars' worth of visible property. At a council of the band it was decided to send a delegation of their own number to Washington to present the petition to Mr. Leupp in person and be prepared to answer such questions as he may wish to ask. It is the request of the Indians that the whole matter be made the subject of a Federal grand jury investigation and that a special attorney be appointed by President Roosevelt to conduct the case. This suggestion appears to be an excellent one and should be acted upor, both for the sake of the Indians and of the Bureau which

has their affairs in charge, in order that the allegations of neglect of duty, or worse, on the part of the latter, which have been persistently made for years past, may be thoroughly sifted, so far as this case is concerned, by an impartial tribunal.

The Connecticut Senatorship

The recent political imbroglio in New York State which involved the candidacy for the United States Senate of Mr. Depew and of ex-Governor Black, as well as the personal standing as a party manager or "boss" of ex-Governor Odell, is now followed by a Senatorial conflict in Connecticut much more malodorous. The term of Senator Hawley is about to expire, and he has declined to stand for re-election owing to the condition of his health. The State Legislature is Republican, and it has been supposed that either ex-Governor Morgan G. Bulkeley or Mr. Samuel Fessenden would be elected to General Hawley's seat. Mr. Bulkeley has been considered to be the more promising candidate, as he is a richer man than Mr. Fessenden, and in his active career as a political manager has frankly used his political and financial power and influence for his own political benefit. In fairness to Mr. Fessenden's reputation as a political "boss," however, it should be added that those who know him believe that if he had the financial resources which ex-Governor Bulkeley commands he could and would use them just as skillfully and scrupulously as the ex-Governor. The plan, however, of electing one of these two men, neither of whom in character or ability will make a worthy successor to General Hawley or Senator Platt, has had an interruption. Dr. Newman Smyth, of New Haven, preached not long ago a vigorous sermon calling the attention of his community to the tainted atmosphere with which ex-Governor Bulkeley's candidacy is rounded. This sermon interested others, and out of it has grown a movement of protest which has spread throughout the State. Unfortunately, for some reason perhaps not altogether unconnected with the power of advertising, the newspapers of the State have not paid very

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much editorial attention to Dr. Smyth's campaign, but they have been compelled to give it space in their news columns. Dr. Smyth has sent a circular-letter to every member of the Legislature, stating two insurmountable objections to the elevation of Mr. Bulkeley to the Senatorship. One objection, says Dr. Smyth, is that in the management of the Etna Life Insurance Company of Hartford, of which Mr. Bulkeley is President, large sums of money which were really due to the mutual policy-holders were diverted to the benefit of the stockholders of the company. Dr. Smyth states that this is a matter of court record, and that in 1878 Governor Hubbard, of Connecticut, characterized this financiering as scandalously unjust." The other obstacle to Mr. Bulkeley's election, according to Dr. Smyth, consists in Mr. Bulkeley's opposition to the "Corrupt PracCorrupt Practices Act" in Connecticut. In a legislative hearing regarding this act, Mr. Bulkeley was asked by Senator Cleaveland the following question: "Do I infer that it is lawful and right for you as a candidate for office to buy a vote which is for sale?" Governor Bulkeley replied as follows: "I think it is right for a candidate to secure that man's vote, if he is without principle and ignorant, by any means you can use." We think it doubtful whether Dr. Smyth's campaign of protest will succeed in defeating Governor Bulkeley; the machine the latter has been building for many years is too powerful to be smashed in a month. But, whatever the outcome, Dr. Smyth's courageous and vigorous work in favor of personal integrity and incorruptibility in political candidates deserves the applause and support of all honest citizens. With popular Senatorial elections, under a primary law such as is now working successfully in Minnesota, no one believes that Mr. Bulkeley or Mr. Fessenden or any man of their stamp could be elected to the United States Senate from such a State as Connecticut.

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His nomination has been delayed in the Senate for the single reason that he is a colored man. Apparently this action

of the Senate has been due to two circumstances: the timidity of Republican Senators who did not dare to face the issue presented by the nomination, and the absurd rule, popularly called the courtesy of the Senate, which practically forbids the appointment of any man to any office in a State against the protest of the Senators from that State. For these reasons— -at least we can conceive no other the nomination was allowed to remain in committee, unreported. Whenever, with the expiration of the Senate, the nomination lapsed, it was renewed by the President at the next session. Meanwhile Dr. Crum has been performing the duties of his office. The President has proved himself possessed of greater patience and persistence than the Senate. The committee has at length reported the nomination and the Senate has straightway confirmed it, if newspaper reports are to be believed, by the gracious consent of Senator Tillman, though against his formal opposition. In general, The Outlook believes that the President in his appointments should recognize the principle that a man ought not to be appointed in a community where he is for any reason persona non grata. But in this case the opposition to Dr. Crum was not personal but racial; the public protest against his appointment was made on the distinct ground, as expressed by the protesters : "We have sworn never again to submit to the rule of the African, and such an appointment as that of Dr. Crum forces us to protest unanimously against this insult to the white blood." The answer which the President made to this protest was the only one which he could make, consistently with his lifelong record, his well-known principles, and the principles of his party: “I cannot consent to take the position that the door of hope-the door of opportunity— is to be shut upon any man, no matter how worthy, purely upon the grounds of race or color." The Outlook congratulates the President, the country, and especially the people of the South, on the outcome of this issue. We say "espe

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