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doubt that I have as to my right and duty to tell my story.
Because men will gamble in the guise of buying and selling
for future delivery is no reason for abolishing the latter,
or the boards of trade and public marts through which it is
conducted. Every person who plants a crop is a speculator,
but not a gambler.



SHERMAN ACT AND MCKINLEY BILL 635

Men and women, rich and poor, black and white, came to
Walter Q. Gresham for counsel and advice. "Old Hutch"
(B. P. Hutchinson), one of the great Board of Trade specu-
lators or gamblers, if you please, was a native of Lynn,
Massachusetts. He was one of the early pork packers of
Chicago and almost always a money-maker. He carried
big bank balances. It was not to get credit but to help his
friends that he organized the Corn Exchange National
Bank. When it was put up to him that he must sign as
president every note the bank issued, he said, "I have no
time for that," and resigned. Many hours have I listened
to B. P. Hutchinson and Mr. Gresham talking. Carrying
a big load or "line," stimulants failing to relieve the ten-
sion, the old man would seek my husband. Sometimes he
would indicate he did not want me present. Then I would
retire. The information that Judge Gresham acquired
from such an encyclopedia of statistics and facts as was
"Old Hutch" was large. Sympathy and good advice
helped to restrain "Old Hutch's" gambling propensities,
and he died a rich man.

Sometimes brokers would send checks to my husband
and say it was his share of a certain speculation in stocks
that a certain gentleman or gentlemen had carried on for
his account. Promptly the checks would be returned with
the statement: "The venture was not authorized by me;
neither my money nor my credit entered into the purchase
and I can accept none of the proceeds."

The Sherman Anti-Trust Bill, as originally introduced
in December, 1888, and as reintroduced in December, i88g,
provided that any person, firm, or corporation receiving
any benefit under any tariff law, that became a party to
any combination to forestall or stifle competition as pro-
hibited by any State statute or the Sherman Act, would
be subject to the pains and penalties of the Sherman Law.
From the foundation of the government the argument in
favor of a high tariff had been that the manufacturers



636 LIFE OF WALTER QUINTIN GRESHAM

would compete amongst themselves and thus lower prices.
But instead of doing this, inside the Chinese wall the war
legislation had constructed, they were combining in the
form of trusts to keep up prices.

Senator Sherman well understood the confines of State
and Federal jurisdiction. Why could not Congress pass a
law that would prevent the perversion of the benefits con-
ferred on a manufacturer by a fostering law of Congress?
Walter Q. Gresham believed with Senator Sherman that it
could constitutionally do so.

The tariff barons and their lawyers said such legisla-
tion would be unconstitutional. Congress has no power to
interfere with manufacturing per se. Certainly not. But
if the manufacturer comes to Congress for protection, Con-
gress should see that that manufacturer does not abuse
that protection. According to Judge Gresham's way of
thinking, any perversion of the benefits derived under a
Federal statute would present a Federal question because
it would be a controversy arising under the laws of the
United States, and therefore the Federal courts w^ould have
jurisdiction. But the best way to restrain the combines
was to limit the customs duties so that the trust could
not, because of foreign competition, become so great as to
be a menace to the government and to society.

The theory prevailed that Mr. Sherman's draft of the
bill was unconstitutional, so Senators Hoar and Edmunds
of the Judiciary Committee, it is said, rewrote the bill under
the commerce clause of the Constitution, clearly covering
by its terms a trust or combination incorporated under the
laws of the States; as, for instance, the Diamond Match
Company of Illinois.

Without the actual experience in the courtroom as law-
yers that Senators Edmunds and Hoar possessed, Senator
Sherman was the superior of both and of all others of that
time in long service and in practical administrative and
legislative experience. He could see through a millstone, if



SHERMAN ACT AND MCKINLEY BILL 637

there was a hole in it. He promptly accepted the amended
bill and drove it through Congress. It was not an admin-
istrative measure, it was not a party measure. The trusts,
the combines, and the men who were rewriting the sched-
ules of the McKinley Bill, did not want it.

Senator Hoar said the amended bill did not prohibit
reasonable restraint of trade. After it was found that it
did — and some men of practical experience say there is
no such thing as "reasonable restraint of trade" — several
attempts were made to induce Congress to amend the act
by writing in it the word "reasonable." It was to get from
under the doctrine of "reasonable restraint of trade" that
led the American colonists to break with the British king.
"Reasonable restraint of trade" is a common law doctrine
pure and simple. There is no common law of the United
States.' Failing to induce Congress to amend the act, the
Supreme Court of the United States in the Standard Oil
case was led to interpret the act as if the word "reasonable"
was in it, although Justice Harlan in a dissenting opinion
warned them it was legislation pure and simple.- And yet
people marvel that the proposition of the judicial recall
has been advanced. One of William H. Taft's mistakes
as President was to defend the opinion of the court in the
Standard Oil case. But as a judge he was among the first;
if not the first, to interpret the act as it was written.

But coming back to the McKinley Bill, to which the
Sherman Act was such an undesirable supplement. The
former did not get through the House of Representatives
until late in the Summer of 1890. With it there went to
the Senate a "Force Bill." This Force Bill was an ad-
ministration, President Harrison's, measure designed to
secure the ballot to the negro in the South. But the prac-
tical men in the Republican party, led by Senator Quay,
were not behind it, and its fate shows that General Harri-
son's fears as a candidate that he would not have much

iWheton vs. Peters, 8 Peters 591, p. 653. 2221 U. S. 91, 105.



638 LIFE OF WALTER QUINTIN GRESHAM

influence at Washington as President were well grounded.
The Senate was Republican by a scant majority. In order
to defeat the Force Bill, the Southern senators threat-
ened to filibuster to the end of the session before they
would let any legislation pass. To meet this situation, Sena-
tor Quay agreed with Senator Vest of Missouri that if the
Democrats would allow a vote on the McKinley Bill, Quay
would cause enough Republican votes to be cast against
the Force Bill to defeat it.^ The Force Bill was defeated.
And then before the vote on the McKinley Bill, Senator
Wolcott of Colorado, with Senator Teller steering him,
served notice that the silver interests of Colorado were
entitled to as much consideration as the iron interests of
Pennsylvania, and unless provisions were made for the
former, the Senators from Colorado and the other silver
States would vote against the McKinley Bill.

Promptly John Sherman's Silver Bill, to coin 6,000,000
ounces of silver bullion into dollars at the ratio of 16 to i
of gold, while the commercial ratio was almost 32 to i, was
passed with the McKinley Bill. Its practical operation
satisfied neither the silver nor the sound money men. To
the latter class President Harrison belonged. And yet,
when the inevitable effect was presented to him of issu-
ing bonds to buy gold to protect the gold reserve in the
Treasury, he refused. A subsequent chapter will show how
President Cleveland met the emergency after V. T. Malott,
the Indianapolis banker, pointed out the way.

When President Harrison signed the McKinley Bill on
October 9, 1890, he stated to Major McKinley, "This
defeats us." Soon after, at a dinner in honor of General
Miles's assuming command of the Department of the
Lakes, Walter Q. Gresham declared the McKinley Bill a
departure from the policy of Henry Clay.

Major McKinley, in the November election of 1890, was
himself in his own congressional district overwhelmingly
defeated, and his party with him. We have shown in the

1 See page 812



SHERMAN ACT AND MCKINLEY BILL 639

preceding chapter how, on the judicial side, there were contri-
buting causes. Kansas, Nebraska, and other Western States
were carried by the Populist party by immense majorities.

Lawyer that he was, and a good one. President Harrison
was lacking in executive ability and leadership. When it
came to legislation, he was entirely ignored. Speaking by
the record, the Harrison administration was not fortunate
in its efforts to enforce, or in laying the foundation for the
enforcement of the Sherman Act.

After the final vote on the McKinley Bill had been
taken. Senator Sherman from his place in the Senate urged
the beneficiaries of the bill not to combine for the suppres-
sion of competition and the enhancement of prices. But
neither his advice nor his law was much heeded.

December 15, 1890, the Chicago Tribune reported one
of the promoters of the Barbed Wire Trust, which sub-
sequently became one of the subsidiary trusts or corpora-
tions of the United States Steel Trust or Corporation, as
saying: "There is no use lying; we are here [in Chicago]
to form a Wire Trust and raise the, price one cent a pound.
That is what we propose doing."

The first prosecution under the Sherman Act was that
against the "Whiskey Trust." WiUiam H. H. Miller, one
of President Harrison's law partners, was still Attorney-
General and William Howard Taft Solicitor-General.

The "Distillers and Cattle Feeders Trust" was created
by an agreement in writing dated May 10, 1887. Prior
to that time it had had more than a nebulous existence,
for there had been an oral understanding. It was modeled
after the Standard Oil Trust. Its control was vested in
a board of trustees. Five different corporations owning and
operating distilleries in and about Peoria, Illinois, became
its first members. By May 10, 1888, it had absorbed
eighty-one different distillery corporations and firms operat-
ing distilleries from Maine to California. Many of these
distilleries had been closed down. All over the country
41



640 LIFE OF WALTER QUINTIN GRESHAM

similar organizations in almost all lines of manufacturing
were being formed. But so far as disclosed, the Whiskey
Trust was the only combination — although they all resorted
to unfair methods — that used dynamite to bring a recal-
citrant into the fold.

February 11, 1890, in order to clothe the unlawful com-
bination in legal garb, the trustees of the Distillers and
Cattle Feeders Trust organized under the laws of Illinois
the Distilling and Cattle Feeding Company.

That eminent counsel, the- leaders of the American bar,
could obtain judicial sanction for the proposition that a
charter from a State was a license to violate a Federal stat-
ute, accounts in part for the loss of confidence the Ameri-
can people have manifested in the American bench and bar.
Behind that New Jersey charter the Standard Oil stood for
years after it had been run out of Ohio. At the time of
which I am writing there were Standard Oil people in society
in Chicago. The status of that organization, the personnel
of many of its members, was well understood. Joseph
Medill did not print in his newspaper everything he knew,
although he had much to say about "The Trusts."

"In November, 1890, the Treasury Department became
satisfied something was wrong at Chicago." That was the
way Solicitor of the Treasury Hart, three months later,
began his story to the newspapers. But the most interest-
ing part, the real history of those extraordinary events, the
newspapers never published. Mr. Hart was one of the men
I met when my husband was Postmaster- General and later
when Secretary of the Treasury, He was a member of
Congress. I knew Mrs. Hart well, and her daughter, a
charming girl, was a friend of my daughter. Mr. Hart had
been lieutenant-governor of Ohio, and was practising his
profession at Hillsboro, Ohio, when he was made Solicitor
of the Treasury.

According to Solicitor Hart's statements to the news-
papers, the Whiskey Trust had attempted to dictate the



SHERMAN ACT AND MCKINLEY BILL 641

Illinois appointment in the United States Internal Revenue
Service, but had failed. But in confidence, Solicitor of
the Treasury Hart disclosed to Circuit Judge Gresham
that the Trust had "put it over" on the administration.
The first man Mr. Hart called on when he came to Chicago
was Judge Gresham. The authorities at Washington sus-
pected everybody in the Internal Revenue Service in Illinois,
and almost everybody connected with the administration
of justice. Solicitor Hart was specific in saying they did
not trust Collector of Internal Revenue "Chris" Mamer and
United States Marshal Hitchcock, both of whom President
Harrison had appointed.

The Judge tried to convince the Solicitor that both
Mamer and Hitchcock were honest men and could be relied
on to perform any duty that might be imposed on them.
The Judge showed his confidence in United States District
Attorney Thomas E. Milchrist, another appointee, by
taking Solicitor Hart to the district attorney's office and
introducing Mr. Hart to Mr. Milchrist. He explained to
the latter the difficulty the Solicitor of the Treasury seemed
to think he was in. Mr. Milchrist was positive both Mamer
and Hitchcock could be relied on.

Solicitor Hart returned to Washington and came back
to Chicago. Still they would not trust Mamer and Hitch-
cock. "Hitchcock had one time been sheriff of Peoria
County, the headquarters of the Trust." "But as sheriff
of Peoria County he had been a terror to wrongdoers."
Still the Solicitor of the Treasury was obdurate. "Well,"
said the Judge, "there is Captain James E. Stewart, the
chief post-office inspector in charge of this district. I
have known him for years. He handled many cases for
the government when I was on the district bench at Indi-
anapolis. He was one of the inspectors when I was post-
master-general upon whom I relied in my war against the
Louisiana Lottery. You can trust him."

Captain Stewart had graduated from a Wisconsin



642 LIFE OF WALTER QUINTIN GRESHAM

regiment in 1865 into the postal service. In 1919 he still is
the inspector in charge of the Chicago Division, composed of
Illinois, Michigan, and Wisconsin. Possibly by some the
criticism may be made of Judge Gresham in this instance
that some Federal judges would have declined to interfere.
But certain it is Judge Gresham rendered the administration
in this matter all the aid any partisan could demand.

Solicitor Hart returned to Washington. In due time
an order came from Postmaster-General Wanamaker to
Post-Office Inspector Stewart to take charge of the inves-
tigation of the violation of the internal revenue laws in
IHinois.

John Dewar had been a ganger under President Arthur's
administration, When the first Cleveland administration
came in, in 1885, Dewar made way for a good Democrat,
and then Dewar went to work for the Whiskey Trust. In
July, 1890, Dewar got his place back as a ganger under
President Harrison's administration, and was assigned to the
Shufeldt Distillery. Early in December of that year Dewar
received a letter from George J. Gibson, secretaiy of the
Distilling and Cattle Feeding Company at Peoria, stating
that he wanted to see Dewar about a mistake that had been
made in his last voucher as an employee of the Distilling
and Cattle Feeding Company. When Dewar called on Gib-
son at Peoria, the latter opened up a proposition for Dewar
to blow up the Shufeldt Distillery. Since the explosion on
December 10, 1888,^ Shufeldt and Lynch had maintained a
strong guard day and night at the Shufeldt Distillery, and
only employees and United States Internal Revenue officers
could enter its doors. Meanwhile, the Shufeldt was the
one great competitor of the Trust. Terms were agreed on —
$25,000 — whereby Dewar was to use the apparatus which
Gibson furnished to destroy the distillery.

The infernal machine consisted of a tin can in which was
a certain liquid, oakum, and a sawed-off Belgian rifle loaded
with powder and a cone-shaped bullet designed to pierce

1 See page 620. .



SHERMAN ACT AND MCKINLEY BILL 643

the bottom of the center vat in the distillery. The piercing
of the bottom of the vat would release enough combustible
and explosive liquid, coming in contact with the burning
cotton and oakum in the air, to complete the destruction
of the distillery.

But Dewar became conscience-stricken and made a dis-
closure or confession of the scheme to Special Agent Sum-
merville of the Internal Revenue Department, who reported
to Commissioner Mason, and he in turn to the Secretary
of the Treasury. It became the subject of a cabinet con-
ference, and Solicitor Hart went to Chicago.

Early in Februar}^ 1 891, at a conference of United States
District Attorney Milchrist, Special Agent Summerville,
and Inspector Stewart, it was arranged that Stewart should
get the evidence against Gibson, including, if possible, some
of Gibson's handwriting to compare with Gibson's letter
to Dewar.

A letter was dictated by Stewart for Dewar to copy, and
then Stewart mailed it to Gibson at Peoria. In speaking of
this letter, Stewart said Judge Gresham had early cautioned
him in detecting crime, never, as an officer of the govern-
ment, to advise the commission of a crime, and never to
take a position that would compromise him before a jur}^
The letter was to the effect that Dewar 's work had taken
him away from the Shufeldt Distillery; that he was now
back; that he was afraid the liquid had lost its strength, and
he awaited Gibson's further instructions. In this letter a
code message was prepared so that Gibson could wire De-
war what he, Gibson, proposed to do. The night of Feb-
ruary 8, the letter to Gibson and Inspector Stewart went
to Peoria. Stewart was in Gibson's office before the letter
arrived. The inspector was investigating complaints about
the failure of carriers to deliver the mails promptly. "We
have no complaint to make. Our service is satisfactory,"
Mr. Gibson said. "Would the secretary of the Distilling
and Cattle Feeding Company favor the government of the



644 LIFE OF WALTER QUINTIN GRESHAM

United States with a statement to that effect?" "Cer-
tainly," replied Gibson. While Gibson was writing out
his statement, Stewart saw a clerk lay Dewar's letter to
Gibson, which Stewart had mailed the night before in Chi-
cago, on Gibson's table. Gibson read his tribute to the
efficiency of the United States postal service and said,
"Wait a minute and I will have it typewritten."

"Not necessary at all; just sign it and I will take no
more of your time."

Gibson signed the paper, and handed it to Stewart, who
said, "Glad we are giving you such good service. Good-
bye."

Stewart sauntered into other places, but watched.
Soon Gibson appeared and went to the office of the Mon-
arch, one of the Trust distilleries; thence to a drug store,
where he spent some time in the rear of the store. Stewart
returned to the hotel at which he was stopping and where
Gibson lived. Taking a block of blank telegrams lying
on the customers' counter of the hotel telegraph ofRce,
Stewart turned over the first sheet and wrote on its back
his initials, "J. E. S.," and then laid the block back on the
counter. Presently Gibson entered the hotel, went up-
stairs, came down to the telegraph office, and sent a tele-
gram. Then Stewart took the first train back to Chicago.
Of course, the telegram beat him there. It advised Dewar
to meet Gibson at the Grand Pacific Hotel the next morn-
ing, February lo, 1891. When the Western Union Com-
pany produced the original before the Federal and State
Grand Juries, it was in the same handwriting as the letter
Gibson had written for Stewart, and on its back was
"J. E. S."

At 6:30 A. M., Dewar met Gibson in front of the Grand
Pacific Hotel, and as they came into the entrance, Post-
Office Inspector Stewart and two United States marshals
took Gibson into custody and to the United States Mar-
shal's office in the Federal Building. From the hotel to



SHERMAN ACT AND MCKINLEY BILL 645

the Marshal's office Stewart insisted that Gibson carry his
satchel, in order that in any prosecution that might follow,
the defense could not claim the government officers had
slipped anything into the satchel. Opening the satchel in
the presence of several deputy marshals, it was found to
contain a bottle filled with liquid and a large number of
bonds which could readily be turned into currency.

Later in the day, Special Agent Summerville, acting
under instructions from Solicitor Hart, filed an affidavit
before United States Commissioner Philip A. Hoyne in
which it was charged that on January 25, 1891, George J.
Gibson had offered Dewar $25,000 to do and omit to do
certain acts in violation of his lawful duty as a gauger.

In the chapter on the Whiskey Ring of 1875, we have
shown that Judge Gresham, who was then the United
States district judge for the District of Indiana, construed
the revenue laws so as to catch all the revenue officers who
were derelict in their duty to the government. Judge
Blodgett, before whom the government had succeeded
against the Whiskey Ring of 1875, in the district court for
the Northern District of Illinois, was still the judge pre-
siding in that court and the court in which, under Solicitor
Hart's theory, the prosecution must be begun.

But from here on it must be kept in mind that the Federal
statute did not prohibit, with penalties, the gauger from
committing arson or murder. The acts the Federal statute
prohibited were failure to observe the exact quantity of
spirits produced, running the distillery in the absence of a
government officer, and similar acts which would defraud
the government of its revenues.

Gibson waived an examination before Commissioner
Hoyne, was bound over to the United States Grand Jury
and released upon Nelson Morris, one of the directors of
the Distilling and Cattle Feeding Company, becoming his
surety on a bond in the penalty of $20,000.

February 28, 1891, three indictments were returned in



646 LIFE OF WALTER QUINTIN GRESHAM

the Criminal Court of Cook County against George J.
Gibson, one in eight counts for conspiring to commit
murder, one in four counts for an attempt to commit
arson, and one in twenty-two counts for "feloniously" pro-
curing gunpowder for the purpose of unlawfully destroy-
ing life and property. Post-Office Inspector Stewart and
the other United States officers were named on the back of
the indictment as the witnesses who had been before the
Cook County Grand Jury.

April 20, 1 89 1, Solicitor Hart still insisting, the United
States Grand Jury voted an indictment against Gibson
for attempting to bribe an officer of the United States.

After Thomas E. Milchrist was appointed United States
district attorney for the Northern District of Illinois, he
appointed John P. Hand, afterwards a member of the
Supreme Court of Illinois, his first assistant, and insisted
on retaining Oliver E. Pagin, who had come into the office
a Democrat five years before. Pagin was then an expert
in drafting indictments, complying , with all the technical
and unreasonable rules of the common law courts. Never,
it is said, was an indictment drawn by Pagin insufficient
in form. He is still in the employ of the Department of
Justice and is to-day the best authority in the United
States on indictments.

At Solicitor Hart's instance. District Attorney Milchrist,
accompanied by Mr. Hart, promptly took the indictment
to Judge Gresham and by them it was carefully examined.
Although in the nicest technical form, the Judge was of the
opinion that the offense charged — the attempt to bribe
Dewar to blow up the Shufeldt Distillery — was not an
offense against the Federal statute. Hart took a copy of
the indictment and went to Washington. vSubsequently
Solicitor-General Taft wrote District Attorney Milchrist
that he concurred in Judge Gresham's view.

Still Hart was not satisfied. He and Milchrist and
Hand argued out before Judge Blodgett the motion to



SHERMAN ACT AND MCKINLEY BILL 647

quash that John S. Runnells and William Burry, Gibson's



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