73 6 UNITED STATES HISTORY 



and monopoly (see E. B. xiv, 7i3a). On May 15, 1911, the Supreme Court gave a 

 new interpretation to this act, distinguishing for the first time in a majority opinion 

 between reasonable and unreasonable restraint. Chief Justice Edward D. 

 Question. White l asserted the doctrine that combinations were illegal only when ex- 

 ercising an unreasonable restraint upon trade or when their " direct and 

 necessary effect " was to stifle competition. Although Justice John M. Harlan sharply 

 dissented from the opinion, pointing out that the court had expressly rejected the 

 " rule of reason " fifteen years before, yet he joined his eight colleagues in decreeing 

 the dissolution within 6 months of the Standard Oil Company (May 1 5) and the Ameri- 

 can Tobacco Company (May 29). Shortly afterwards these great corporations dis- 

 solved into their component parts. But the belief widely prevailed that their obedience 

 to the court decree was only colourable. Justification of this view appeared in the suit 

 which the government brought against the Standard Oil Companies of New Jersey and 

 New York, August 29, 1912, charging conspiracy to ruin the business of the Pierce- 

 Fordyce Oil Association of Texas and in the proof, adduced by proceedings in the 

 state of Missouri, that control over the Waters-Pierce Company still rested with John 

 D. Rockefeller and his associates of the Standard Oil. Among Republicans there now 

 began to appear a definite cleavage of opinion as to the best methods of dealing with 

 the trusts. President Taft wished to secure " competition without monopoly." He 

 expressed satisfaction with the Sherman act, suggesting that amendments be adopted 

 defining improper acts of restraint or monopoly as criminal offences. Mr. Roosevelt, 

 on the other hand, regarded as chimerical the attempt to regulate trusts by means of a 

 succession of lawsuits. He wished to have an administrative commission which would 

 supervise other interstate corporations very much as was already being done in the 

 case of railroads. This would preserve the advantages of large-scale production and 

 give certainty to business. In the presidential campaign this question, though over- 

 shadowed by the tariff issue, was much discussed. The Democrats, with their laissez- 

 faire notions, differed radically from Mr. Roosevelt, denouncing his scheme for a 

 commission as state regulation of monopolies and emphasizing the function of the 

 states in dealing with the problem. They also differed from Mr. Taft in wishing to 

 reverse the interpretation which the court had placed upon the Sherman act. 



During 1910-12 important questions came to the front with respect to the control 

 of railroads. In 1911 the conflict between national and local authority became acute. 

 By court decisions severe restrictions were placed upon the states. The 

 Supreme Court held that the equipment of a railroad which conducts an 

 interstate business comes exclusively under the jurisdiction of the Inter- 

 state Commerce Commission, even in the case of cars moving entirely within the 

 boundaries of a single state. The circuit court at St. Paul held invalid (April 21, 1911) 

 a Minnesota law fixing the passenger rate at two cents a mile, the ground being that, 

 while the law applied only within the state, it nevertheless discriminated against inter- 

 state passengers who had to pay a higher rate. Against this decision, as an encroach- 

 ment upon state rights, the state governors protested on the occasion of their annual 

 conference at Spring Lake, New Jersey, on September 12, 1911. In April, 1912, when 

 the case came before the Supreme Court on appeal, three of the governors presented 

 briefs. The decision, which will have far-reaching effects, had not been handed down 

 in February 1913. In 1910 Congress adopted an amendment to the Interstate Com- 

 merce act. This extended the jurisdiction of the Interstate Commerce Commission to 

 telegraph and telephone companies, increased its powers in fixing rates, created a com- 

 merce court to review its orders, and authorised the President to create a board to 

 investigate railroad capitalisation. The new Commerce Court proceeded, in a series 

 of derisions, to override the Commission, only to have several of the decisions reversed 

 in 1912 by the Supreme Court which criticised it for exceeding its powers. Public 



1 Edward Douglass White (b. 1845), a native of Louisiana, a Democrat, and a former 

 Confederate soldier, had become a justice of the Supreme Court in 1894, and in Dec. 1910 

 was appointed Chief-Justice. He had served in the U. S. Senate in 1891-94. 



