New National Forces and the Old Law

GREAT centralizing movements are of two kinds: political or legal, and social or economic. There is no necessity for pointing out at great length the forced march of the latter; science, invention, skill and will have made a new world around us, undreamt a generation ago, and economic movements have gone forward with a rapidity and effect unknown before to history.

The most striking phase of material progress is seen in the discoveries revealed to mankind that might in many cases be properly called creations, — creations in the sense that no knowledge before attainable was equal to the direction of the new forces; the means used to reach the end have not merely taken hold of things already in use and developed them to higher efficiency; they have actually given us new ideas and agencies which at most were yesterday’s dreams and mysteries,—they have given us a new beginning of things. It is not necessary to deny that men came to modern uses of existent forces by steps; enough that a result was reached which was a discovery, as if of something before not present in the world.

The extraordinary phenomena of material progress have been followed by no less extraordinary manifestations of social and economic change. Of these manifestations, one above all others has become conspicuous. We may look with admiration while we tremble before this powerful force which man has set in motion, a force proceeding from the wit of man and yet threatening to outwit him, the force of economic and social centralization.

If we are to prevent this force of centralization from working us evil, it must be by bending our energies and skill toward making legal and political progress keep up to the pace set by social and economic advance. The former must be capable of harnessing the latter, if we are to proceed safely along the line of evolution and thus avoid ultimate anarchy, revolution, and chaos, inevitable when a people have become convinced that law and organization no longer can restrain social and economic excesses.

The social movement has now proceeded with such rapidity and energy that it has left behind, almost out of sight, the law of the nineteenth century, so far as that related to the new social conditions, and because of material progress that affects almost everything pertaining to life and well-being.

It is well to present definite illustrations and choose those which seem specially significant. Toward the end of the eighteenth century the Benthamites raised the cry of freedom for the individual, a cry heard from one end of England to the other and then across the Atlantic. Freedom of contract followed status; status gave way to freedom of contract. The idea suited perfectly the rising civilization of America, and was adopted without so much as a thought of anything else. The social and economic condition, being one of substantial equality, was in keeping with the legal idea of freedom of contract, and all went well accordingly. Decisions and statutes, state and federal, accumulated on the line of freedom of contract and of equality touching the opportunities and benefits of life in a land of limitless extent and promise.

That was an age in which freedom of contract flourished in freedom of territory and opportunity; but freedom of contract within the period of a single life proved its own overthrow in the serious sense that it led to economic conditions which broke it down in substance and effect. For freedom of contract means freedom of competition, and competition unrestricted drives the weaker competitor to the wall, — drives him over the wall and out of the field altogether, and results in monopoly. If freedom of contract worked badly in this country alone, it might be suspected that there was something wrong with ourselves; but they are finding the same trouble in England. “ Among the existing evils which threaten the soundness of our national life to-day,” said a wellknown member of Parliament, speaking to Englishmen, a few months ago, “may be included the continuance of an industrial system based upon unrestricted competition.” The difficulty with freedom of contract, which was to be the ally and buttress of equality, is that it has produced inequality and deposited privilege with the few.

In other words, the social movements have rushed on ahead of the law of the nineteenth century, until now there is a gap which no one knows how to bridge. It is often said that the common law, the general current of law which has been accumulating under the decisions of our courts, is expansive, that its principles, as they are called, have within them a promise and a potency equal to the emergency, equal to all emergencies. Experience throws more doubt upon this than the historians declare; the latter have dwelt too much on the continuity of history, legal, social, and political. Of course all history is continuous, but is all history unbroken,— that is, is every period of history an outgrowth of what went before ? Surely there was no relation other than the continuity of time between English feudalism and the mercantile age which followed and prevails to-day. Even less can a relation be found on the legal side: law merchant, the legal counterpart of the mercantile age in business, had nothing whatever to do with the English common law, except to insist upon recognition.

The emphasis laid upon the teaching of history is justified because of its bearing upon the true conception of law. Within a particular period, law, like its social counterpart, is indeed mainly a development of certain doctrines or principles. But that period may come to an end by a breaking up, by a conquest, or only by a new era supplanting the old as if by a new creation. The accumulation of social and economic knowledge may not be equal to new questions of the day; all the law stored up in the previous period may be unable to meet the new conditions. Both history and the experience of our own generation as well as the helplessness of the present law, moving in the paths of yesterday to meet the new social and economic growth, show the inability of the common law to continue master of the situation. To overcome this inadequacy something more than merely resting on the old conception of law is necessary. Just as there have been new creations and new conquests in social and economic movements, so must there be new creations and conquests in law.

We have come to a moment when new innovating social or economic energy has promised to supplant the old in the sense of becoming dominant over the laws of the State. The movement has already gone far enough to create a deadlock with the old estate, and neither is dominant; but the old law may be unequal to the new economic and social problems.

Here then to-day is a deadlock between the old era of equality and the new, innovating energy of privilege growing out of the freedom of contract. And deadlock of such a kind is a thing not to be contemplated with indifference; on the contingency of the result hangs too much, hangs everything — the nature and the stability of government itself. If privilege wins, the nature of the government will be changed, and the stability of the State must be provided for in new and resolute ways. The issue is fundamental and the situation therefore serious in the extreme. That is equally true without looking forward to the possible outcome; the situation meantime and now, with reference to the deadlock itself, is momentous. The law of the nineteenth century is not equal to the occasion; nothing yet has been devised to take its place, and privilege virtually defies the powers of the state. In other words, touching the most vital of all things, for all things depend upon it, we are, in relation to the social innovation, without the operation of effective law and control. We may go on in other respects with the implements furnished by the old régime; but we must go on in peril of what we ought to face and realize in all its possibilities.

The trust movements have brought — or are understood to be bringing — within their embrace oil, coal, iron, steel, copper, lead, rubber, paper, asphalt, and food stuffs, such as sugar, meat, crackers, and, in localities, milk; with wheat, corn, and other grains and commodities left only as subjects for the cornering of the market; and then, to complete the situation, the agencies for distributing these and nearly all other necessities or conveniences of life — the railways — are welded into the greatest, monopoly of all.

Then consider labor. There is no question now of sympathy, antipathy, or indifference: we are considering simply a fact. Labor never joined in the economists’ cry of freedom of contract; it has never been democratic in that sense; it has always, and naturally enough, been for labor, — that is to say, it has always been in favor of monopoly. Freedom of contract was never a workable doctrine for either side; and labor was right in opposing it. It was a delusion. And so labor went on centralizing its forces as capital increased in power, following capital in the more recent and sweeping concentration of the latter, with the result we see today throughout the land. Between the centralization of capital and the centralization of labor we are tied up in a Gordian knot no man can untie and few men dare cut. Everything we eat, drink, or wear is burdened with a tax levied at the will of power. Monopoly, as a matter of law as well as of fact, is taxation,— taxation not upon any natural basis of supply and demand and the ordinary incidents of trade, but at the will of men who themselves control the market both in regard to prices and supply, — at the will of men who in imposing taxes have taken upon themselves a function of government. There is neither freedom nor equality of contract; the gates of opportunity to the promises of life open only to a golden key.

The result of the combination of capital is that we have a very small class, numbering less, it is said, than a score, who within the very terms of the law, within the favorite legal idea of the nineteenth century, have ridden to the foremost place of privilege and assumed one of the highest functions of sovereignty, the power of taxation.

In another way, organized labor has been about the same business. It has insisted upon being treated as constituting a class by itself, with privileges peculiar to its own aims. Organized labor denies in effect that responsibility should go along with power; it rejects the injunction where the injunction is the only effective remedy against disturbances in the management of business, putting itself virtually on the footing of the state, or at least of the public; it refuses to permit its funds to be reached to answer its defaults. It has in England gained a notable victory on this line. The court of last resort had decided in the famous Taff Vale Railway Case that, according to the law of England, responsibility went with power, that labor, even under the fostering statutes of that country, was entitled to no privilege in that respect; but now, by an overwhelming majority, the House of Commons decides that the judiciary is wrong, and provides for complete immunity for the funds of the labor unions. The Prime Minister declares that the object of the government in this action is “to place the rival powers of capital and labor on an equality, so that in the event of a fight it should be a fair one.”

That is the view and determination of labor in this country also; labor refuses with us to incorporate by legislation, for fear in large part that by so doing it would expose its funds to process of the law.

Both capital and labor are raised or are in the way of rising, under the protection of the law itself, to the place of sovereignty, — sometimes at the same moment and with regard to the same object, as in the case of the coal strike, where each side plainly said, “ Let the public be still, for I am Sovereign.” It was said by a prophet before our civil war, that the country could not endure half slave and half free. The only difference between the application of that declaration to the state of things which called it forth, and its application to the present, is that that was a humanitarian cry of the North, and that there was indeed a condition in which, by an actual line of demarcation, half the country was free and half slave; whereas now the case is that the public everywhere is under subjection, and not merely one privileged class, but two are our masters.

And what is nineteenth-century law in face of such a state of things ? Civil liability in damages is welcomed — and derided—by the offender; it amounts to nothing but permission for a small price. The injunction and the criminal law fall short. Labor makes the use of the injunction a peril to the judge whose tenure, under nineteenth-century law, is subject to the popular will, as it is in the greater part of the country; and capital has found a hundred ways of evading the danger of such process in the inadequacy of existing law to meet it on its chosen ground.

Illustrations of the inadequacy of the law are recent enough. The Supreme Court of the United States decides that a corporation cannot hide itself behind the plea of self-incrimination, when called upon to produce its letters and documents. This no doubt is gain; there are lawyers who think it doubtful if the question would have been so decided a few years ago. The judicial indicator is beginning to turn to the pressure of the greater social force, the public. But aside from that, how much has been gained ? What can you do to a corporation, to punish it for violating the law ? You cannot imprison a “ fiction; ” if the incorporeal person has funds, you may get at these by a fine; but that will not stop the business if the business is profitable. You may take away the company’s charter and so destroy its legal life, if you are able to prove your case, which is not likely; but the men who managed the business will go on with the work, for they are exempt by the Constitution from giving evidence to incriminate themselves.

The case of the Beef Trust showed how completely the old law ties the hands of the government, and how futile the efforts of the government are, under existing law, to put an end to violations of the Sherman Act. Armed with full authority for the purpose, the government makes elaborate preparation, proceeds to investigate the facts, and obtains evidence against the managers, who are now duly indicted; and what is the result? All the investigation goes for nothing, so far as the individual defendants are concerned; the evidence is involuntary, and the court is bound to rule that it cannot be used, — the accused are protected by the constitutional provision that a person shall not be compelled to incriminate himself. The court is now at liberty to proceed constitutionally against the corporation, with such prospect as that already indicated, and the play proceeds.

The Constitution, framed in the atmosphere of the eighteenth century, turns the prosecution into a mock suit. And so we have it again; law provided for one state of things being invoked under a state of things unheard of when it was adopted. Two facts should be noticed, as having their bearing upon the old criminal law and the constitutional protection of the accused. Prosecution of political offenses was common, and often became persecution of the worst kind in England; and it was highly important that it should be made clear that nothing of that sort should take place in the new Republic. It should be observed that the provision that a person accused of crime shall not be compelled to give evidence against himself is found in one of the amendments submitted to the first Congress as a virtual condition to the acceptability of the Constitution. It may well be doubted whether such a provision would have been made but for the danger of political proscription.

The other fact is that the newer crimes of combination in restraint of trade appear to give us a complete change in the point of view of crime. It is well to speak with reserve, for the subject is new and remains to be dealt with clearly and finally. Let the matter be put thus: The old crimes certainly turn on the act; the new ones seem to turn on the mental attitude, one long step further back. If it be said that proof of a crime cannot be required to turn on states of mind, the answer is then that all the legislation making criminal these combinations is futile in its own nature, and not merely because of some legal handicap. It would hardly do to say that the crime may be made to turn on the tendency of the combination to work restraint of trade. That would be going too far; it would apply to almost every combination of capital, and perhaps of labor, and so operate against union admittedly proper. If the change defeats the legislation altogether, so much the more serious the situation.

Consider further this change in the point of view. A man commits an assault with “intent ” to kill, or commits murder, which equally turns upon “intent.” He is said in the indictment to have committed the act with malice aforethought, the legal way of stating intent in such cases; but the allegation may be proved, and usually is proved, by the overt acts committed, together with any train of facts connected with them; no other proof is needed, — no proof of the actual attitude of mind as a fact distinct from the external manifestation, is required or was ever thought of. So the criminal law operates simply enough in theory, and generally in practice, in relation to the sort of crime for which it was framed.

How is it with the crimes of our day, these combinations of capital or of labor in restraint of trade ? These do not turn upon the overt act, though of course that must be proved; proof of that fact cannot establish the offense. Railways may combine and adjust their rates in the combination without any violation of the statute; nothing done merely in pursuance of the bargain would be illegal. The question would be of the object of the combination : if the purpose was to crowd competition off the field, the combination would be unlawful, otherwise it might be within the law. A combination to buy up all the potatoes to be found, to send them to starving people in Japan, or a combination of ranchmen, after a season disastrous to cattle, to send buyers East to buy up cattle for restocking their ranches, would be lawful; while to buy up the potatoes or the cattle to corner the market or to drive out competition would be unlawful. So of combinations of labor: entered into to raise the price of employment, — if that were all, — combination would be lawful; but if combination is inspired, wholly or in part, by a purpose to monopolize labor, it is illegal so far as that purpose leads to action.

The nature of the defense of motive, set up in the prosecution of Mr. Perkins of the New York Life Insurance Company, under the ordinary criminal law, is far-reaching. That defense, which is supposed by some good lawyers to be sound, goes to the very roots of the whole subject of criminal liability. Putting aside the question whether the offense, if any, was larceny or embezzlement, the question raised is whether any crime at all has been committed where the accused believed that the object was a proper and just one, on a mistaken idea of the law honestly entertained, — where, in a word, he had a good motive in doing what he did. This is a controverted question; but it is a most serious matter, touching everywhere the well-being of society; and if the defense is held good, the doctrine of pious pilfering or other vice will provide speedy exit from our criminal courts for the smooth-tongued clients of Snap, Gammon, and Quirk. Indeed, there is much other indication that the old criminal law is being punctured with difficulties similar to those suggested by the defense in the Perkins case, arising from the complications of our later society. Mistake of law is a prolific source of uncertainty.

So also in crimes of combination. The prosecution has to prove, not intent in the sense of the old law, — that is, as the necessary effect of an act, — but a state of mind as a thing distinct from the combination and the external acts following. That must be so unless the tendency of the combination is to be taken as establishing the crime. How prove the state of mind, except by an admission or by acts capable of no other explanation than the alleged purpose ? How get an injunction — how convict the defendants — if we are shut up in this way in regard to proof ? Labor unions may not be able to control men not skilled in concealing their purposes, until they are sufficiently trained; but when they become skillful enough to conceal, what are you going to do about it ? As for unlawful combinations of capital, playing, as capital usually is, for great stakes, and skilled as it has become in all the arts of concealment, how are you going to establish the guilt of individuals beyond a reasonable doubt? The Constitution will not permit you to call for books and letters except on terms of immunity; without admissions or significant acts, you can only call on the employees, whose living depends upon their faithfulness to the service.

No, measures suited to a different age will not do; if we are to control the trusts through law we must find new remedies, and perhaps new methods of obtaining evidence. The trusts go on without legal control, notwithstanding all the nineteenth-century law and methods; everybody knows what all the legal ingenuity of the day founded on the past is unequal to establish. The situation calls for all the skill of the present at its highest level. To fail will be to surrender a function of government, and establish the rule of inequality. How far such a thing might affect the body of our law cannot be foreseen. It may be a difficult thing for the government to keep the peace in such an event; but keep the peace it must,— whatever social force may dominate the state, peace and order must be preserved.

Constitutions and legislation, moulded under the same influences, have served of course to make matters worse, because they prevail over judge-made law and are not easily changed. Instead of one direct path to justice, constitutions and statutes have given us numberless crosssections, operating as so many barriers to the protection of legal rights. Montesquieu, with his checks and balances, was admirable in theory; he took possession of the imagination at a peculiar time, and theory was, as so often is the case, carried to an extreme. It is well to divide the departments of state; but to make the divisions water-tight is pushing logic beyond its limits and causing more trouble than it prevents; and when this is repeated by forty odd jurisdictions, each a barrier to every other, the difficulty comes to what we see to-day. Alexander Hamilton saw the trouble; he would have had one perfect line of jurisdiction for the federal government, without the crosscutting and impeding sections of state authority.

All the remedies tried in recent years to meet this situation have broken down. The Sherman Act against the trusts, the Interstate Commerce Act, state expulsion acts, all have failed of their purpose. They have not been useless; but they have not accomplished the purposes for which they were passed. They have indeed been useful; they have shown to those who take the pains to see, that expansion of the nineteenth century conceptions of law cannot be made to reach the difficulties. The remedies run merely on old lines of the common law, on the notion which had taken possession of the law makers that the common law of the nineteenth century, in its principles, was for all time. The lesson has been worth learning, hard as the process may have been, that each social age is a distinct era in law as well as in its pursuits; that it must be so in the former, or the latter will come to a standstill. Laws conceived as applicable to one particular condition of society cannot apply, or be expected to apply, to conditions radically different, and not contemplated when those laws were made. As your social movement carries you away from old conditions, your law must move on to keep pace with it, or there will be trouble such as we are now witnessing.

The centralizing legal movements of the federal government are accordingly regarded by a large part if not by most of the public with approval. The social movement which has gone forward with such energy and rapidity is having its natural effect. It has been having its effect — the indicator has been responding to the pressure — for more than twenty years, following as closely as could be expected the social movement, but heretofore in an inadequate way. Now at last there is indication that the lesson has been learned, that new measures must be tried. Experiment accordingly is on foot; freedom of contract as a basis of commercial life is being abandoned in law as it has been overthrown in fact, and equality, in a new form, different from that of the nineteenth century, is in course of taking its place. Equality in railway rate-making, equality as regards localities, equality between shipper and railway, — that is the idea on which the President and his supporters are proceeding. Without questioning whether equality or monopoly can give us the better government, if the public is to succeed generally against monopoly the President’s idea may be prophetic.

Social and economic centralization is now being met with a tendency to political centralization and legal initiative. The world about us, full of new creations and forces, demands for its control new conceptions and new ideas of politics and law. Freedom of the individual must, under these new creations and conceptions, give way in part; a practicable equality, social and economic, legal and political, is the word of our to-morrow.