_The Sherman Anti-"trust" Law._--Finally, in obedience to a widespread popular demand, Congress took action in 1890 by pa.s.sing what is popularly known as the Sherman anti-"trust" act to protect trade and commerce among the states against unlawful restraint and monopolies.

This act declared that every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the states or with foreign nations was illegal, and it prescribed appropriate penalties for violations thereof. This law, however, applies only to "trusts" which are in restraint of trade among the states or with foreign nations. It has no application to those whose activities are confined entirely within the boundaries of a single state; with such "trusts" the states alone have the power to deal.

In pursuance of the act of 1890, prosecutions have been inst.i.tuted in the federal courts against a large number of "trusts," and some of them have been broken up, but the larger number have escaped. In 1911, for example, the Supreme Court decided that the Standard Oil and tobacco "trusts" were illegal, and their dissolution was decreed.

_The Clayton Anti-"trust" Act._--In 1914 Congress pa.s.sed another important act directed against combinations in restraint of trade. In brief, it prohibits price discriminations among purchasers, exclusive trade agreements between manufacturers and retailers, the holding of the stock of one corporation by another, and interlocking directorates. Like the other anti-"trust" acts it applies, of course, only to persons or corporations engaged in interstate commerce or trade. To enforce the act a _federal trade commission_ was created. It consists of five members appointed by the President, at a salary of $10,000 each.

=Federal Pure Food Legislation.=--The commerce clause of the Const.i.tution is also the source of some important legislation designed to protect the public against impure, unwholesome, and adulterated foods produced in the United States. We have already called attention to the legislation of Congress against the importation of impure foods, and teas from abroad. Still more recently Congress pa.s.sed an interstate pure food law prohibiting the transportation among the states and territories of any food products which are adulterated or which contain foreign substances not indicated in the labels. The law also provides for the fixing of a standard of pure foods and other products transported from one state to another or intended for interstate transportation, and provides that they must come up to the standard prescribed.

_The Meat Inspection Law._--To protect the public against unwholesome meat products, Congress enacted in 1891 a law which was strengthened in important particulars in 1906, providing for the inspection of slaughtering houses whose products are intended for interstate commerce.

The law requires the registration of all establishments engaged in slaughtering animals the products of which are to be shipped into other states or are intended for export. Each is given a number, and federal inspectors are a.s.signed to inspect the animals intended for slaughter, to inspect their carca.s.ses in certain cases, and to see that the business of slaughtering is conducted under clean and wholesome conditions. Animals found suffering with certain diseases are not allowed to be slaughtered for food purposes, and meat discovered to be unwholesome must be rejected. Supervision is also exercised over the processes of packing and canning, and there are detailed regulations in regard to labeling.

=References.= ANDREWS, Manual of the Const.i.tution, pp. 89-95.

BEARD, American Government, ch. xix. COOLEY, Principles of Const.i.tutional Law, pp. 66-88. HART, Actual Government, ch. xxiv.

HINSDALE, American Government, secs. 374-380. JOHNSON, Railway Transportation, ch. xxvi.

=Ill.u.s.trative Material.=--Annual reports of the Interstate Commerce Commission, of the Department of Agriculture, of the Attorney-General, of the Commissioner of Navigation, of the Commissioner of Immigration, and of the Public Health and Marine Hospital Service.

RESEARCH QUESTIONS

1. What were the reasons for giving Congress control over foreign and interstate commerce?

2. Why did the delegates from the Southern states oppose giving this power to Congress?

3. What is meant by the "original package" doctrine?

4. Why should a railroad company be prohibited from granting rebates?

For charging more for a "short haul" than for a "long haul"? From transporting the products of its own mines and manufactories? From pooling its freight or earnings?

5. What are the arguments for and against granting government subsidies for the upbuilding of the merchant marine?

6. What have been the princ.i.p.al reasons for the decline of the American carrying trade?

7. What is the amount of money annually appropriated for improving the rivers and harbors of the country?

8. How has the commerce clause of the Const.i.tution been the source of important extensions of the power of the national government? Mention some important recent acts of Congress that have been pa.s.sed in pursuance of this clause.

9. Should Congress, in your judgment, impose greater restrictions upon immigration than it now imposes?

10. Do you think Congress should have power to regulate the business of life insurance? To regulate marriage and divorce?

11. Is the policy of governmental regulation of railroads preferable to governmental ownership? Give your reasons.

CHAPTER XIV

OTHER IMPORTANT POWERS OF CONGRESS

THE POST OFFICE, COPYRIGHTS, PATENTS, THE ARMY, THE NAVY, ETC.

=The Postal Service.=--The beginnings of the postal service in the United States date back to the action of the Continental Congress in creating a post office department in 1775, and appointing Benjamin Franklin as its head. Under Franklin's direction postal routes were established throughout the colonies and the mails were carried over them at intervals of one or two weeks. In 1776 there were twenty-eight post offices located in the more important towns. The Const.i.tution gave Congress power to establish post offices and post roads, and when the new government was established, the postal service was reorganized and extended. In 1790, however, there were only seventy-five post offices in the thirteen states, and less than 2,000 miles of post roads. The total revenues were only $37,000, and the expenditures only $32,000. Now there are more than 60,000 offices and over 25,000 different routes, with an aggregate mileage of about 450,000 miles. A recent postmaster-general has well said: "The postal establishment of the United States is the greatest business concern in the world. It handles more pieces, employs more men, spends more money, brings more revenue, uses more agencies, reaches more homes, involves more details, and touches more interests than any other human organization, public or private, governmental or corporate." Some idea of the magnitude of the service may be gained from the fact that during the year 1919 about twenty billion pieces of mail were handled, more than $1,000,000,000 worth of domestic money orders were issued, and more than 120,000,000 articles were registered. The receipts for the year 1919 aggregated $364,847,126, and the expenditures $362,497,635.

_The Postal Deficit._--For many years the postal service was operated at a loss, the princ.i.p.al causes of the deficit being due to the loss sustained by the government on the transportation of second-cla.s.s matter and through the rural free delivery service. During the fiscal year 1917 the loss on the former account aggregated $72,000,000 and on the latter about half that amount. There is also a heavy loss on mail carried free under the Congressional frank. Thus in 1917 more than 60,000,000 pounds of such mail was carried, the postage on which would have cost more than $20,000,000. Nevertheless by rigorous economy the deficit was made to disappear in 1911 for the first time in thirty years. In 1917 there was a surplus of more than $9,000,000.

=Mail Matter.=--Congress has power to decide what matter shall be admitted to the mails and what shall be excluded. In addition to books and printed matter generally it allows parcels of merchandise weighing not more than seventy pounds to be carried through the mails; also seeds, bulbs, roots, samples of flour, dried fruits, cut flowers, geological and botanical specimens, soap, nuts, live queen bees, dried insects, etc. On the other hand, the following matter is denied admission to the mails: parcels weighing over seventy pounds; poisons, explosives, live animals, liquors and other objects unsuitable for transportation in the mails; obscene matter and articles adapted or designed for immoral purposes; all matter relating to lotteries and schemes for swindling the public, and, by acts of 1917, advertis.e.m.e.nts of intoxicating liquor intended for distribution in prohibition states and printed matter advocating treason, insurrection, resistance to the laws, disloyalty, etc.

_"Fraud Orders."_--The mails are so frequently used by dishonest concerns for circulating advertising matter designed to defraud the public, that a law has been pa.s.sed authorizing the postmaster-general to withhold the privileges of the postal service from persons using it for such purposes. In pursuance of this authority, he frequently issues "fraud orders," instructing the local postmaster not to deliver mail to specified fraudulent concerns. It was reported in 1913 that in two years such concerns had swindled the people out of $129,000,000.

_Cla.s.sification of Mail Matter._--Mail is cla.s.sified into four different cla.s.ses: _first_, letters and postal cards; _second_, newspapers and other periodical publications; _third_, printed matter not admitted to the second cla.s.s; and _fourth_, merchandise not comprehended in the other three cla.s.ses.

_The Rates of Postage_ on the different cla.s.ses have varied in amount from time to time. In the early history of the post-office department the rates for transporting letters were regulated on the basis of the distance carried, and according to the number of sheets in the letter, the amount ranging from six to twenty-five cents. Since 1863, however, there has been a uniform rate on letters irrespective of distance. In 1883 the rate was fixed at two cents; in 1917, three cents; in 1919, two cents. Before 1847, when the adhesive postage stamps were introduced, payment of postage was made in cash and the amount indorsed on the envelope. Postal cards were introduced in 1872.

On the transportation of first-cla.s.s mail the government realizes a profit estimated at $60,000,000 per year, notwithstanding the long distance much of it is carried. There is also a substantial profit derived from foreign mail.

=Second-Cla.s.s Matter= mailed by the publishers is carried at the rate of 1-1/2 cents a pound, with an added charge (depending on distance) for advertising matter;[45] but newspapers are carried free to any office within the county of publication except in cities having free delivery service. The government has sustained heavy losses in carrying second-cla.s.s matter. In the year 1917 more than 1,200,000,000 pounds was transported at a loss of over six cents per pound. It const.i.tuted over 60 per cent of all domestic mail, but yielded less than five per cent of the postal revenues, the loss being greater than the profits realized on all other cla.s.ses of mail combined.

[45] The rate for other persons than publishers is four cents a pound.

_Should the Second-Cla.s.s Rate be Increased?_--For some years there was considerable agitation in favor of increasing the rate paid by publishers, especially on magazines which are overloaded with advertising matter and on other publications which are devoted largely to advertising purposes. Successive postmasters-general urged a readjustment of the rates, but until 1917 Congress took no action further than to appoint a commission to investigate and report on the subject. The two suggestions most considered were, that a higher rate should be imposed on magazines than on newspapers in view of the fact that the average distance of transportation is greater in the case of magazines than in the case of newspapers, and that a higher rate be imposed on advertising matter than on purely reading matter.

Against these arguments it was contended that the educational benefits derived from the extensive circulation of second-cla.s.s matter are very great, and that for this reason the government can well afford to contribute something toward the dissemination of advertising information among the ma.s.ses of the people. Moreover, it was argued that the circulation of second-cla.s.s matter is responsible for a large amount of first-cla.s.s matter and thus the government makes up in the increased profits on first-cla.s.s matter what it loses on second-cla.s.s matter. Thus it was said that fifty pages of advertising matter in a popular magazine might lead to the writing of 50,000 letters. Consequently a reduction in the volume of second-cla.s.s matter would inevitably be followed by a corresponding reduction in first-cla.s.s matter.

Finally in 1917 Congress pa.s.sed a law providing for a graduated increase in the rates on the advertising portions of newspapers and magazines, the amount depending on the distance carried.

=Free Delivery Service.=--The extension of _rural free delivery_ service has been the most rapid and remarkable of all the undertakings of the post office department. It began as an experiment in 1897, when less than $15,000 was appropriated to test the advantage of free delivery in country districts, and it has been extended until it now const.i.tutes one of the largest branches of the postal service, the annual expenditures on account of the service exceeding $50,000,000. This is the largest item of expenditure by the post office department on any of its services except the transportation of mail on the railroads, which foots up nearly $55,000,000. There are more than 40,000 rural free delivery routes in operation, and nearly three billion pieces of mail are annually delivered to 27,000,000 people along these routes. An investigation made in 1909 showed that the postage on the average amount of mail collected on a rural route was $14.92 per month, while the average cost of the service was $72.17. The average cost of the service on a rural route, therefore, exceeded the average revenue derived from postage by $687 per year. On that basis the total loss on the operation of the service was estimated to be about $28,000,000. But while the loss to the government in money has been great, the advantage to the country districts served has been notable. Besides the convenience to the country residents it has brought them into closer relation with the centers of population, made country life more attractive and less monotonous, increased farm values, and encouraged the improvement of country roads, since the department insists upon the maintenance of the highways in good condition as a prerequisite to the introduction and continuance of the service.

_Free Delivery in Cities._--Free delivery of mail in the larger towns and cities was first introduced during the Civil War, and the service has been extended to include all places of not less than 10,000 inhabitants or where the postal receipts are not less than $10,000 per year. In 1885, provision was made by which immediate delivery ("special delivery") of a letter upon its arrival at a city post office could be secured by payment of ten cents.

=Registry Service.=--In 1855, Congress established the registry service, by which upon the payment of extra postage--the extra rate is now ten cents per letter or parcel--special care is taken of letters or parcels registered. Thus the safe delivery of a valuable letter or parcel is practically a.s.sured, and by a recent law the post office department has provided a system of insurance against the loss of parcels mail--the maximum amount allowed in case of loss being one hundred dollars.

=Money-Order Service.=--In 1864 the money-order service was established, by which upon the payment of a small fee, ranging from three to thirty cents according to the amount of the order, money may be sent through the mails without danger of loss. At all the larger post offices and at many of the smaller ones, international money orders may also be obtained at rates ranging from ten cents to one dollar, payable in almost any part of the world where the mails are carried. The primary object of the postal money-order service is to provide for the public a safe, convenient, and cheap method of making remittances by mail, and it is the declared policy of the department to extend the service to all post offices where its introduction is practicable.

=Postal Savings Banks.=--One of the most important extensions of the postal service is the establishment of a system of postal savings banks, authorized by an act of Congress pa.s.sed in 1910.[46] This service has long been performed by the governments of many other countries, and its introduction into the United States had been strongly recommended by successive postmasters-general for a number of years. The proposition was also indorsed by both of the great political parties in their national platforms. In favor of the proposition it was pointed out that in many communities private savings banks are inaccessible, there being only one such bank to every 52,000 of the population of the country, as a whole; that on account of the popular distrust of private savings banks in many communities, savings were h.o.a.rded and hidden and thus kept out of circulation; that on account of the popular confidence in the government the establishment of savings banks under its auspices would cause the money now hidden to be brought out and put into circulation; that it would encourage thrift and economy as well as stimulate loyalty and patriotism among depositors; and that it would improve the conditions of farm life, thus supplementing the work of the rural free delivery service, the telephone, and the interurban trolley car.

[46] Already in 1906 a system of postal savings banks had been established in the Philippine Islands, where it was giving entire satisfaction.

The new law for the establishment of postal savings banks, as amended in 1918, provides that any person may deposit with the local postmaster of any office which has been made a depository (there were over 7000 such offices in 1918) any amount from one dollar up to $2500 and receive interest thereon at two per cent per annum, provided the amount has been on deposit at least six months. Detailed provisions are made for the investment by the government of the sums deposited in the post offices throughout the country. There were in 1919 over 565,000 depositors and the total deposits were $167,323,260,--an average of nearly $300 per depositor.

=Parcel Post Service.=--In many countries the post office department also performs, through the parcel post service, what amounts to an express business. Thus in a number of the European countries one may send boxes or parcels weighing as much as fifty or even one hundred pounds through the mails at very low rates of postage. In the United States books and packages of merchandise may be sent through the mails, but the weight of the package except in the case of books was until 1913 limited to four pounds.[47] The limitation as to weight and the comparatively high rate of postage--sixteen cents per pound--made resort to the express companies necessary much more than in Europe. For some years there was a widespread agitation for the establishment of a parcel post system in the United States, and in 1912 Congress provided for the installation of such a system on January 1, 1913. The maximum weight limit of parcels that might be transported through the mails was increased to eleven pounds (and later to fifty pounds; seventy pounds for short distances), and the list of mailable articles was enlarged so as to include b.u.t.ter, eggs, meats, fruits, and vegetables. In 1914 books were added to the list. The country is divided into zones according to the distance from each post office, and the rate of postage varies both with the weight and with the zone to which it is sent. About one billion parcels, weighing over two billion pounds, are handled annually. So popular is the service that in 1914 the postmaster-general recommended that the government take steps toward acquiring the telegraph and telephone service of the country.

[47] The United States has long had "parcels post" treaties with a number of foreign countries, however, by which parcels weighing as much as eleven pounds may be sent through the mails to those countries at the rate of twelve cents per pound.

=Postal Subsidies.=--In recent years there has been considerable agitation, princ.i.p.ally by the postal authorities and the commercial organizations of the country, in favor of extending our postal facilities with certain foreign countries, notably South America and the Orient, where they are now very inadequate. While most of the European governments have quick and frequent postal communications with these countries, ours are slow and infrequent. Most foreign governments have adopted the policy of subsidizing private steamship lines to carry the mails to out-of-the-way places. In 1891, Congress pa.s.sed a law for this purpose, but the amount appropriated is so small that the post office department has not been able to extend our mail facilities with foreign countries as rapidly as needed.