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Annual report of the Attorney General of the United States online

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plainly marked on the outside thereof the contents thereof; and it shall be
unlawful for any person to deliver, or cause to be delivered, to any common
carrier engaged in interstate or foreign commerce by land or water, for inter-
state or foreign transportation, or to carry upon any vessel or vehicle engaged
in interstate or foreign transportation, any explosive, or other dangerous
article, or arms or munitions of war, under any false or deceptive marking, de-
scription, invoice, shipping order, or other declaration, or without Informing
the agent of such carrier of the true character thereof, at or before the time
such delivery or carriage is made. Whoever shall knowingly violate, or cause
to be violated, any provision of this section, or of the three sections last pre-
ceding, or any regulation made by the Interstate Commerce Commission in
pursuance thereof, shall be fined not more than $2,000, or imprisoned not more
than eighteen months, or both.

T recommend such an amendment.

14. EMPIiOYMENT FOR FeDERAD PRISONERS.

For more than 17 years the prisoners at the Atlanta and Leaven-
worth penitentiaries have been mainly employed in constructing
additional buildings and making enlargements, so that accommoda-
tions might be afforded for Federal convicts who, for lack of room,
were confined in State institutions. This work now having been
about finally completed and the accommodations at the penitentiaries
having thus been expanded until they are ready to lodge the entire
body of convicts, these men must be maintained in idleness to their
own hurt and the Government's loss unless provision to meet the
emergency is speedily made.

At this writing, just after the summer recesses of the courts, there
are about 1,200 prisoners at Atlanta and about 1,500 at Leavenworth.
The aggregate for both institutions can be treated as holding close to!
3,500. Of these there are now or shortly will be available for indus- 1
trial pursuits about 700 at Atlanta and about 1,000 at Leavenworth.1
It is essential that this labor be promptly and intelligently utilized,'
in order to make the penitentiaries approach a self-sustaining basis
and to safeguard the welfare of the prisoners and the discipline of
the institutions.

While the Attorney General is charged with the duty of adminis-
tering these institutions, he is powerless to provide for the present
crisis. Congress alone can determine the kind of employment and
make provision for its inauguration, and such action is imperatively
demanded.



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14 REPORT OF THE ATTORNEY GENERAL.

The study of the subject of prisons aud prison reform seems by
common consent to lead to the conviction that industrial labor for
those confined within the walls, and agricultural pursuits for those
not so confined, is the sensible solution of the problem.

Acting along these lines, my last two reports suggested the estab-
lishment of two factories, one at Atlanta and the other at Leaven-
worth, coupled with a recommendation in favor of the acquisition
of additional agricultural land at both places.

The entire situation is fully discussed on pages 09 to 72 of my
last annual report, to which attention is respectfully called. By
authority of Congress a commission was organized which carefully
considered the problem and presented a report to the last Congress
recommending the establishment of a furniture factory at Leaven-
worth and a textile mill at Atlanta, the entire output of both enter-
prises to be sold exclusively to the Government. Congress recently
made appropriations for the construction of the necessary buildings,
and I now recommend that the additional legislation necessary for
the completion of these plans be passed at the earliest possible date.
Among other things, it will be necessary to provide for the purchase
and installation of the necessary machinery and the initial work-
ing capital suflScient to safeguard the carrying on of the enterprises
without financial embarrassment. I further recommend that pay-
ment be authorized to prisoners or their families of a portion of the
earnings of these industries. A further discussion of the problem
will be found on pages 90 and 91 of this report.

15. AuTHORrrv ix) Sue a Corporation in ant District in Which it

Transacts Business.

Under existing law the United States can not maintain, against
objection, a transitory action against a corporation in any district
other than that in which is located its principal place of business
within the State of its creation. This rule often operates to the dis-
advantage of the public. For instance, a New Jersey corporation
may do its main business in a far-off State and there commit some
trespass or conversion of public timber. The place of the trespass
would naturally be the place also where the witnesses would reside.
Nevertheless, the corporation can not be sued without its consent in
that district.

I repeat the recommendation contained in the Annual Report of
the Attorney General for 1910 that the law be amended so as to allow
the Government to sue any corporation in any district in which it
actually transacts business. A bill to this effect was introduced in
the Sixty-fourth Congress, first session (H. R. 6808).



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REPORT OF THE ATTORNEY GENERAL. 15

I also submit the following additional recommendations:

1. Unauthorized Wearing of the Army or Navy Uniform of

Foreign Countries.

Under existing law (act of June 3, 1916, ch. 134, sec. 125) the
wrongful wearing by persons not in the military or naval service
of the United States of its duly prescribed army or navy uniform
is made a misdemeanor. This law does not reach the case of im-
posters wearing, the uniform of friendly foreign nations. I there-
fore recommend that a similar statute be enacted making it a mis-
demeanor to wear in the United States or any of its possessions the
army or navy uniform or regalia, or any imitation thereof, of any
friendly foreign nation, except where the person wearing the same
is entitled to do so by the law^s of the country to which such uniform
or regalia belongs. The Secretary of State and the Secretary of
War have authorized me to say that they join in this recommenda-
tion.

2. Amendments to the Bankruptcy Law.

The following changes in the bankruptcy law are recommended :
(a) Referees in bankruptcy should be placed upon the same plane
as clerks of the United States district courts by fixing a maximum
limit for their compensation and requiring them to pay the excess
into the Treasury of the United States.

(ft) Provision should be made for the appointment in each district
of one or more oflScial trustees to take possession of a bankrupt's
property automatically upon adjudication, or upon order of court in
case of a contested adjudication. This would obviate the appoint-
ment and consequent cost of receivers, would prevent much scandal
growing out of alleged manipulations of trusteeships and estates by
referees and attorneys, and would bring to the trustee's office the
benefits resulting from experience.

3. Assignment to Occasional Service of Judges of the Court of

Customs Appeals.

The business in the district courts and circuit courts of appeals
frequently is of such character and volume as to demand for its
dispatch some assistance to the judges re^larly sitting therein.
Limited provision for such emergencies has already been made by
existing law, and there would seem to be no reason why the entire
Federal judiciary should not be made as mobile a force as possible.

In pursuance of this purpose it has been suggested that the
Chief Justice of the United States be given power to assign the
judges of the Court of Customs Appeals to special service in other
Federal coui-ts when the business of that court will permit and the
public interest so requires. Legislation to this end is accordingly
recommended. r'



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16 REPORT OF THE ATTORNEY GENERAL.

4. Punishment for Violation of President's Proclamation.

Legislation should be enacted defining as a criminal offense a
willful violation of the presidential proclamations i^elating to alien
enemies promulgated under section 4067 of the Revised Statutes
and providing appropriate punishment.

5. Regulation of Entry and Departure of Persons from United

States.

I recommend the passage of a law conferring on the President
power to regulate or provide for the regulation of the entry and
departure of all persons, both citizens and aliens, to and from the
United States and its possessions during a state of war.

ENFORCEMENT OF THE ANTITRUST LAWS.

The abnormal economic conditions resulting from the world war
have brought about substantial increases in the prices of practically
every commodity, in consequence of which a large number of com-
plaints have been made of alleged violations of th? antitrust laws.

In dealing with these complaints there are two broad limitations
upon the powers of this department under the antitrust laws:

First, increases in prices, brought about not by agreement, con-
spiracy, or monopoly but by a common selfish impulse of traders to
take advantage of the extraordinary condition of the times, are not
punishable under the antitrust laws, no matter how completely lack-
ing in economic justification, no matter how extortionate.

Second, sales of commodities by retailei*s to consumei-s in the van-
out cities and communities generally fall outside the field of inter-
state commerce and therefore are not within reach of the Federal
antitrust laws.

Within these limitations the Department of Justice has brought
to bear its full energy. The various United States district attorneys
and the various agents of the Bureau of Investigation throughout
the counti^y were instructed to make inquiry in their respective com-
munities for the purpose of ascertaining whether the prevailing high
prices wore due to agreements or conspiracies in restraint of inter-
state trade. In addition, a special legal and investigating force was
organized for this single purpose.

As a result of this investigation several prosecutions have been
instituted and the department is still continiiing its effort's, although
the situation has been to some extent changed by the enactment of
the fo(Kl and fuel control act and the organization of the Food and
Fuel Adminij^trations with power to fix prices in some cases and
otherwise control markets — a power which is now being actively
exercised.

During the past year 18 cases have been instituted — 6 civil and 1*2
criminal; and 15 cases have been finally determined — 7 civil and 8



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BEPORT OF THE ATTORNEY GENERAL. 17

criminal. There are pending at this time 37 cases — 19 civil and 18
criminal.

Of the 37 cases now pending, 14 have reached tlie Supreme Court,
the more important being the Reading case, the Lehigh Valley case,
the Steel case, the Harvester case, and the United Shoe Machinery
case, which were argued during the last term and restored to the
docket for reargument; the Kodak case, the Motion Picture case, the
American Can case, the Corn Products case, and the Southern Pa-
cific-Central Pacific case. The Reading case and the Xiehigh Valley
case have been reargued and are awaiting decision.

1. Cases Finally Determined,
lumber cases.

This group of cases was instituted to remove the restraints im-
posed upon the lumber business by combinations and associations of
dealers in certain sections of the country. In the case against Hollis
and others in the district of Minnesota, the court sustained the con-
tentions of the Government in every particular, and pn August 10,
1917, a final decree was entered granting the relief asked. In view
of the decision in the Hollis Case, it is expected that the similar cases
against Hartwick and others in the eastern district of Michigan, and
the Colorado and Wyoming Lumber Dealers' Association and others
in the district of Colorado, will be disposed of by the entry of consent
decrees.

plumbers' cases.

Conditions in the plumbing-supplies trade have also been the sub-
ject of a group of cases. After the trials of the cases instituted in
the southern district of Iowa and the district of Utah (included in
my report for last year) , resulting in verdicts of guilty, the defend-
ants in the case pending in the western district of Pennsylvania
entered pleas of twIo contendere and were fined amounts aggregat-
ing $5,265.

To supplement the three propeedings by indictment, a proceeding
in equity was instituted in the western district of Pennsylvania in
May, 1917, charging the National Association of Master Plumbers,
its affiliated State and local associations, and their officers and mem-
bers, with combining and conspiring to restrain interstate trade and
commerce in plumbing goods by concertedly refusing to sell goods
which they did not themselves install and by refusing to install goods
which they did not themselves sell, coupled with the practice of
refusing to patronize manufacturers and wholesale dealers who sold
plumbing goods directly to consumers or to nonmember retailers.
This case was not contested, and an agreed decree enjoining the
defendants from further committing the acts complained of was
entered on May 19, 1917.

18197*— attt gen 1917 2



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18 REPORT OF THE ATTORNEY GENERAL.

THE WAR MUNITIONS CASES.

There have been two prosecutions of conspiracies to restrain, pre-
vent, and hinder the foreign commerce of the United States in muni-
tions of war.

One, in the northern district of California, was against Franz
Bopp, German consul general at San Francisco, and several others.
The defendants were convicted and sentenced to imprisonment for
one year. Four of them, including Bopp, were sentenced to, pay
fines of $5,000 each, in addition.

The second case, in the southern district of Neise York, was against
Von Kintelen, Martin, Lamar, Buchanan, Taylor, Fowler, Schulteis,
and Monnett. The jury foimd Von Kintelen, Lamar, and Martin
guilty, and each was sentenced to imprisonment for one year. There
was a disagreement as to Buchanan, Fowler, Taylor, and Schulteis.
The indictment was dismissed as to Monnett.

MONUMENT DEAL£RS CASE.

The National Retail Monument Dealers Association of America
and certain of its oflSc^rs and members were indicted in the district
of Maryland for combining and conspiring to restrain trade and
commerce in monuments and memorials by the compilation and
circulation of so-called "honorary lists" of producers, manufacturers,
and wholesalers who refused to sell to so-called illegitimate retailers
and to ultimate purchasers, and by inducing members of the asso-
ciation not to purchase monuments and memorials from any pro-
ducer, manufacturer, or wholesaler not on such lists. On September
12, 1917, the court accepted pleas of nolo contendere by the several
defendants and fined them amounts aggregating $6,255.

POTATO SHIPPERS ASSOCIATION CASE.

Five oflBcers and members of the Aroostook Potato Shippers Asso-
ciation were indicted in the district pi Massachusetts for combining
and conspiring to restrain interstate trade in potatoes by threatening,
blacklisting, and boycotting dealers and fining members who failed
to observe the arbitrary rulings of the association designed to en-
able it to dominate and control the trade in potatoes produced in
Aroostook County, Me. The trial resulted in a verdict of guilty
against all of the defendants, and on October 10, 1916, the court
imposed fines aggregating $3,500.

WOVEN LABEL MANUFACTURERS ASSOCIATION CASE.

The Woven Label Manufacturers Association comprised practi-
cally all of the woven label manufacturers in the United States and
had adopted rules, regulations, and policies under which it con-



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BEPOBT OF THE ATTORNEY GENERAL. 19

trolled and dominated the entire trade in labels, hangers, tabs, and
like articles, from the manufacturer to the consumer. Among other
things, the association adopted arbitrary and fictitious schedules of
costs, established uniform list and resale prices and terms of sale,
and issued what was in effect a blacklist. A petition was filed against
the members of this association at New York City on October 8,
1917, and on the same date an agreed decree was entered dissolving
the association and enjoining the formation of a similar association
or the further observance of the unlawful practices of the old asso-
ciation.

SMOKELESS COAL CASES.

The general investigations made into conditions in the coal trade
in January and February, 1917, resulted in the return of three
indictments in the southern district of New York against the Aileen
Coal Co. et al., the Algoma Coal & Coke Co. et al., and the Baker-
Whiteley Coal Co. et al.

In the Aileen case 108 corporations and 59 individuals were
charged with having entered into a combination to eliminate com-
petition and increase the price of semibituminous or smokeless coal,
known in the trade as New River coal and Pocahontas coal, by
means of a plan concertedly adopted and executed. After a trial
lasting nearly a month, the jury returned a verdict of acquittal on
July 12, 1917.

In the Algoma case a large number of corporations and indi-
viduals were charged with eliminating competition by selling their
product through a common sales agency (Castner, Curran & Bullitt
(Inc.)). In view of the verdict of acquittal in the Aileen case,
which was the strongest of the group, a 7U)Ue proseqm was entered
in this case on July 19, 1917.

In the Baker- Whiteley case the same plan as that involved in
the Aileen case was utilized in the sale of so-called bunker coal.
About one-half of the defendants, who were likewise defendants in
the Aileen case, entered pleas in bar of autrefois acquit on the ground
that the bimker transactions constituted part of the offense charged
in the Aileen case. These pleas were sustained by the court on July
20, 1917. The case was dismissed as to the remaining defendants.

OCEAN TRANSPORTATION CASES.

The Prince Line (Ltd.) and others, and the American- Asiatic
Steamship Co. and others, were charged with combining to restrain
and monopolize ocean transportation between ports in the United
States and ports in South America and the Far East, respectively,
by means of pooling agreements, rebates, etc. Both cases were de-



<



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20 BEPOBT OF THE ATTORNEY GENERAL.

cided adversely to the Government in the district court and ap-
peals were taken to the Supreme Court. On January 22, 1917, the
Supreme Court reversed the decrees of the lower court, but the agree-
ments having been dissolved in consequence of the European war,
did not go into the merits, but remanded the cases with directions to
dismiss the bills without prejudice.

2. Pending Cases Instituted Prior to July 1, 1916.

United States v. Reading Co. et al. (Anthracite Coal Combina-
tion). — The decision of the district court in this case was favorable
to the Government in substantial part, i. e., it was held that the
union through a holding company of the Philadelphia & Reading
Coal & Iron Co. and the Lehigh & Wilkes-Barre Coal Co. — two.
of the great anthracite coal-producing companies — ^is a combination
in restraint of trade. In some important respects, however, the
decision was adverse to the Government. Both the Government and
the defendants appealed to the Supreme Court. The case was
argued at the beginning of the October term, 1916, and having been
restored to the docket for reargument it was again argued in the
early part of the present term.

United States v. Lehigh Valley Railroad Co. et al. — ^The petition
in this case charged that the Lehigh Valley Railroad, in combina-
tion with affiliated corporations, has monopolized trade and com-
merce in anthracite coal produced along and transported over its
lines, in violation of the antitrust act; and that the same railroad is
transporting in interstate commerce anthracite coal in which it has
an interest, in violation of the commodity clause of the act to regu-
late commerce. The district court dismissed the petition, whereupon
the Government appealed to the Supreme Court. The case was
argued at the beginning of the October term, 1917, and having been
restored to the docket for argument it was again argued early in
the present term.

United States v. International Harvester Co. et al. — This case is
pending in the Supreme Court on the appeal by the defendants from
the decision of the district court sustaining the contentions of the
Government and ordering the combination dissolved. It was argued
in April, 1915; reargued in March, 1917; and on May 21, 1917, again
restored to the docket for reargument.

United States v. United States Steel Corporation et al. — ^In con-
formity with the decision of the circuit judges, sitting as a district
court, a decree dismissing the Government's petition in this case was
entered in September, 1915. The Government appealed to the Su-
preme Court, and the case was argued in March, 1917. On May 21,
1917, it was restored to the docket for reargument



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REPORT OF THE ATTORNEY GENERAL. 21

United States v. United Shoe Mcwhinery Co. et al, — ^The district
court for the district of Massachusetts decided this case adversely to
the Government and entered a decree dismissing the petition. The
Government appealed to the Supreme Court, where the case is now
pending, having been argued in March, 1917, and restored to the
docket on May 21, 1917, for reargiiment This case has been advanced
for hearing on January 7, 1918.

There is also pending in the District of New Jersey an ancillary
proceeding against the United Shoe Machinery Co. of New Jersey
et al., the disposition of which will await the outcome of the main
case.

United States v. Eastman Kodak Co. et al. — A decision favorable
to the Government was handed down in August, 1915, and a decree
granting the relief sought was entered in January, 1916. The de-
fendants appealed to the Supreme Court, and the case is being pre-
pared for argument during the present term.

United States v. Motion Picture Patents Co. et al. — ^The Govern-
ment prevailed in the district court and a decree granting the relief
prayed for in its petition was entered in January, 1916. The de-
fendants appealed to the Supreme Court, where the case is now
pending.

United States v. American Can Co, et al. — ^The district court
handed down an opinion in this case on February 23, 1916, and on
July 7, 1916, a decree was entered adjudging that the American Can
Co. was organized as a combination in restraint of trade. However,
the only relief granted was the retention of the bill, i. e., keeping the
combination under the supervision of the court. Considering that to
be inadequate, the Government has appealed to the Supreme Court.

United Steves v. Com Products Refining Co. et al. — A decision fav-
orable to the Government was handed down in the district court for
the southern district of New York on June 24, 1916, and a decree
ordering among other things the dissolution of the combination was
entered in November, 1916. The defendants have appealed to the
Supreme Court.

United States v. Southern PacifiC'Cenlral Paeific Railway Co.
et al. — ^This case was argued before three circuit judges sitting as a
district court. In an opinion filed March 9, 1917, it was decided
adversely to the Grovemment, one judge dissenting. The Govern-
ment has appealed to the Supreme Court.

United Stales v. Quaker Oats Co. et al. — ^This case was heard by
three circuit judges, sitting as a district court. The decision of the
majority was against the Government, one judge dissenting. The
Government has appealed to the Supreme Court.

United States v. Associated Billposters et al. — The defendants were
charged with entering into a combination and conspiracy in restraint



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22 REPORT OF THE ATTORNEY GENERAL.

of trade and commerce in posters. A decision favorable to the Gt)v-
ernment was handed down in the district court in March, 1916, and
a decree granting the relief sought was entered in July, 1916. The
defendants have appealed to the Supreme Court.

Vmted States v. Board of Trade of the City of Chicaffo.^ — ^This
case involves. a rule of the board of trade under which members are
required to bid a uniform price in purchasing grain at country points
tributary to Chicago when the board is not in session. The court de-
cided in favor of the Government and a decree was entered in De-



Online LibraryUnited States. Dept. of JusticeAnnual report of the Attorney General of the United States → online text (page 2 of 31)