that are semi-legislative, and upon Congress, as the representative of the American people, should rest the responsibility of determining by a well conceived law the extent, if any, to which the consolidation of inter-State competing carriers should be permitted. In this connection it has been suggested that all inter-State carriers should be required to operate under a Federal charter. It would not subject them to any greater extent to Federal power, which is already plenary, but it would enable the Federal government to deal with them in a less indirect manner. In the Constitutional Convention of 1787, James Madison twice proposed an article authorizing Congress "to grant charters to corporations in cases where the public good may require them and the authority of a single State may be incompetent." The proposition does not seem to have been seriously considered by the framers, although supported by Randolph and Wilson, and was sidetracked without a direct vote upon its merits, probably because so few corporations were then in existence and so little need existed for any. In 1791, Mr. Hamilton, in proposing that a charter be granted to create a bank of the United States, contended that Congress could "create a corporation in relation to the trade with foreign countries or to the trade between the States, because it is the province of the Federal government to regulate. those objects," and this view the Supreme Court sustained in McCullagh vs. Maryland, where Chief Justice Marshall expressly said that Congress could issue a charter to "a railroad corporation for the purpose of promoting commerce among the States." As a matter of fact, both the Northern Pacific and the Union Pacific railways were originally incorporated under Federal laws. For this exercise of Federal authority there was little need as long as the States used judgment and discretion in granting their charters, and as long as there was a reasonable uniformity between them as to corporation laws. In recent years, however, many States have vied with each other in the shameless and inconsiderate peddling of corporate franchises. In the Northern Securities case the country witnessed the extraordinary spectacle of the Governors of five Western States, whose policy forbade the consolidation of parallel and competing lines, invoking the protection of the Federal government against the pretended powers of a New Jersey corporation. The difficulty, however, with a Federal charter is that its authority is necessarily limited to inter-State trade and can confer none to operate wholly within the borders of a State. This would subject the average railroad to the necessity of two charters, and thus make "confusion worse confounded." In view of the centralizing tendencies of steam and electricity our country will eventually consider the propriety of such an amendment to the Constitution as will grant to transportation companies the right to transact their business throughout the country, whether inter-State or infra-State, under the protection of a Federal charter. Such a suggestion would have shocked Jefferson as much as the creation. of the Bank, and perhaps even Hamilton would not have been prepared for so far-reaching an exercise of Federal power. But neither Hamilton nor Jefferson ever conceived the possibility of the railroad or the telegraph. Through their centripetal tendencies we are no longer a group of States, united with a slender thread of Federal power, but a national organism, whose arteries are the railroads and whose sensitive nerves are the telegraph wires, and this organism can no more be divided as to commerce into separately vital parts than you could divide the human body. As Mr. Justice Bradley strongly said, "In matters of foreign and inter-State commerce there are no States." To paraphrase one of the most distinguished of living publicists, "it is a condition and not a theory which confronts us." Indeed that great President gave one of the most striking manifestations of the unity of the nation for commercial purposes when, in disregard of the clamor of labor agitators and political demagogues, he forcibly cleared the channels of inter-State trade from unlawful obstructions. Rarely has the supremacy of Federal power over inter-State trade been more strikingly manifested. If, as many believe, these channels are now obstructed by more powerful forces, which restrain the free flow of commerce and oppress the people by stifling competition, then assuredly an equal duty exists to vindicate the freedom of commerce from unlawful monopoly. The problem will not be solved in a day or a generation, and in the course of its solution many existing theories, legal and economic, will doubtless be swept away. The question should be approached with neither passion nor hysteria, and to its solution the policy of publicity, which we largely owe to President Roosevelt, will make a valuable contribution. As the President well said in his last Message: "Publicity in corporate affairs will tend to do away with ignorance and will afford facts upon which intelligent action may be taken." If the problem be approached in this spirit, it may be confidently predicted that in its solution the American people will not ultimately fail. |