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Wednesday, 5 September 1906

Senator DRAKE (Queensland) -- During its progress through, the Senate, 1 have stated my objections to the Bill. I have moved some amendments, but, as a rule, thev have not been accepted by the Senate. 'I am told that time has been wasted. I have been endeavouring to convince the Senate of the correctness of my views, and if I have failed I suppose that it is because I have not been able to convince honorable senators that they are wrong. In that respect there may have been a waste of time, but from my point of view there has been no time wasted, because I am still strongly convinced that the blots I pointed out are real, and might have been removed. Therefore, I say that we might with advantage have devoted more time to the consideration of the measure. On the motion for the second reading, I pointed out that the question of dealing with trusts was a very difficult one, that it had been in the mind of previous Governments to bring in a measure to deal with" trusts, and that they had .not been able to arrive at any means by which it could be done. I also expressed the opinion that the Bill did not provide any solution of the difficulty. During its progress through Committee I became mere fully convinced of the fact that we had not yet found a means of dealing with trusts. Being desirous to bring in a Bill, and to at all events make an attempt in that direction, the Government have relied very much on the Sherman Act. In fact, the principal provisions in regard to trusts are admittedly drawn from the example of that Act, though I must admit, to be perfectly fair, that a slight alteration has been made. The Sherman Act has been departed from by putting in the words " to the detriment of the public," but that, I submit, is like putting in the word "wrongfully" or " wilfully," for it really means nothing. It says that a certain thing is wrong. If it is wrong it will still be for the Court to decide what is to the detriment of the public, and it does, not approach to a clear definition of a trade agreement which is injurious. In the August number of the North American Review, I find an article entitled " The Sherman Anti-Trust Law," by Mr. Charles G. Dawes, formerly Comptroller of the Currency. In order to enable the Senate to form an opinion as to whether Mr. Dawes is in a position to write on this subject. I propose to quote a note relating to him. He is described as -

President of the Central Trust Company of Illinois, was born at Marietta, Ohio, in 1S65. He graduated from Marietta College in 1S84, and from the Cincinnati Law School in 18S6. For seven years he practised law in Lincoln, Nebraska, but discontinued legal pursuits to attend to business interests in Evanston, Illinois, La Crosse, Winconsin, and Akron, Ohio. He represented Illinois on the Republican National Committee in the campaign of 1896, and he was Comptroller of the Currency from 1S97 to 1902. He is the author of a volume entitled " The Banking Systems of the United States."

That 01315- ought to know something of the subject on which he is writing. This is what he says about the Sherman Anti-Trust law, and perhaps when it is quoted honorable senators can form an opinion as to whether it has been a success or not -

In its present form, during the sixteen years that have elapsed since its passage, it has proved a failure.

Senator Trenwith - This Bill is not in the form of the Sherman Act.

Senator DRAKE - It is in the form of that Act, and it contains the words " te the detriment of the public," but that is not a solution of the difficulty.

Senator Trenwith - It goes much further.

Senator DRAKE - If that were a solution the people of the United States would not be confronted with so many obstacles in their task of dealing with corporations, as the honorable senator will see if he will exercise a litle patience.

If it is to be useful hereafter, it must be made to define what kind of agreements in restraint of trade are illegal, and to exempt from its provisions those trade agreements which, while they may be in restraint of trade, operate either for the public welfare or at least in a manner not injurious to it. This is the day of the trade agreement. We see all over the country, in different lines of business, district, city, State, and national associations or business men, formed for mutual protection and for the arranging of what might be termed the rules of trade. The business community already knows that there are certain agreements in restraint of trade which keep alive competition, and that are aimed at keeping it alive. They seek to substitute, among business men, the " live-and-let-live " policy for the policy of unrestrained competition.

Further on he explains the genesis of the Sherman Anti -Trust law in these words : -

In July, 1890, when the culminating years of a period of great prosperity had turned the mind of the public to questions relating rather to the distribution than the creating of wealth - a period of public disquietude like the present - the Sherman Anti-Trust Law was passed in response to an excited public demand. Because of its inherent defects, this law became practically a dead letter until recently, when an effort has been made to use it in response to a recurrence of public protest against corporate abuses. It seems to us very unfortunate that now, when the public interest in such questions is fully aroused, we do not have greater efforts on the part of our leaders to create wise public sentiment in favour of proper legislation regulating general corporations; and that, so far as the trust question is concerned, the chief endeavour to satisfy the public mind is made through selected civil and criminal cases under the defective Sherman law.

That is exactly the same thing as we are doing.

Senator Trenwith - He is asking for a law like the one we arepassing.

Senator DRAKE - Oh no. This Bill sins exactly as the Sherman Act does. It contains all the defects which are pointed out by this writer in that it lumps good and bad agreements in one undiscriminacing condemnation. Mr. Dawes finishes his article with these words : -

Let us hope that, before this period of general interest in corporation questions is passed, the question of the amendment of the Sherman Anti-Trust Law will be taken up by Congress, and the law made more practical and enforceable by the clearer definition of what shall constitute illegality in trade agreements, and by the exemption from its provisions of such agreements in restraint of trade as are not injurious to the public.

The onlything which can be said about the Bill as it stands with all agreements, good and bad, lumped together, is that when it is placed upon the statute-book its friends will be very careful not to allow it to operate in any case where an agreement is not injurious. It is very dangerous legislation. So far as we can see, if it is operative at all it will have a very injurious effect. At this stage I do not propose to go into the questions with which I have endeavoured to deal previously. Senator Symon has expressed my views very fully this afternoon with regard to interfering with the trade rights of a State. I object to the Bill most strongly on that ground, because I think it is one of the most dangerous attacks on the rights of the States which could be made under the Constitution. Such attacks cannot fail to have a very injurious effect upon the relations between the Commonwealth and the States. I also protest against the Bill on the ground I stated more fully last night, namely, that it is clearly an infraction of the treaty which has only recently beer, made with New Zealand, and the offer of preferential trade which has been made to Great Britain. I shall therefore vote against its third reading.

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