Standard Oil case, etc.; that now their clients are running to them all the time and asking them if this or that is safe. Of course, they advise them differently now from what they did several years ago.

Senator BRANDEGEE. The methods of competition and the devices by which competitors attempt to get the trade and to get the better of each other are multitudinous, are they not?

Mr. FELT. They are; and the forms of unfair competition are almost equal, to my knowledge. I think the Sherman law, in view of recent decisions of the Supreme Court, would cover the ground, but I think that it should be backed by a commission given all the powers that you read there. I am not afraid of it, myself.

Senator BRANDEGEE. Is it your understanding that this interstate trade commission is a body to supplement in any way the Sherman law?

Mr. FELT. My idea would be that they would nose around and they would

Senator BRANDEGEE. I think you have the correct idea on that. Mr. FELT. They could get statistics from all of us. I would not object to it, at all. In fact, I think it is needed. I think that our present hard times is largely due to a fear of prospective legislation right down here. Some of those bills that were introduced in the beginning, in the House, gave a man a chill when he read them.

Senator SAULSBURY. Could you undertake to define, in your particular line of business, what unfair practices would be, in such a way that you could write it into a law?

Mr. FELT. No; I could not do it. There are too many of then. Senator SAULSBURY. Would you attempt to do it?

Mr. FELT. No; because after you had written off 20 of them, I could invent another one.

Senator POMERENE. You are an inventor, I believe you said? [Laughter.]

Mr. FELT. Yes, sir. I know other men that could invent others, in any other lines of business.

Senator SAULSBURY. It is your opinion as a practical man, is it not, that in a business of any kind where it would be possible to pursue many of these practices that you do not believe in, you could always find some method which was not prohibited?

Mr. FELT. Some other way out. There is no doubt about it.

The CHAIRMAN. Suppose the power should be given in this bill to the commission to condemn unfair practices in trade without attempting to define them, and the commission should be given power, whenever an unfair practice is called to its attention, to give you an order calling upon the corporation to show cause why an order should not be entered compelling the discontinuance of this unfair practice, and supposing a hearing should be held, and then after an order was made compelling the discontinuance of the practice, the commission would have the right to enforce its order by application to the court in case the corporation refused obedience. Would you regard that power a very oppressive power?

Mr. FELT. No; I should regard it as a good thing.

The CHAIRMAN. As a good thing?

Mr. FELT. Yes, sir; I certainly would.

Senator BRANDEGEE. I would not regard it as oppressive, because I think it would be declared absolutely unconstitutional.

The CHAIRMAN. Assuming that that would be constitutional, do you not think it would be a good thing?

Mr. FELT. I favor it, yes; decidedly.

The CHAIRMAN. It would give a man or a corporation a chance to be heard and give a man or a corporation a chance to correct that practice, and it would only be condemned finally upon the sustaining of the order by the court.

Mr. FELT. I want to say in regard to hard times here and abroad, that our business last year was 23 per cent foreign business, all handled in our own offices with our old men on salaries, with the exception of a few countries. But we are under great depression in business just now. We are running less than half capacity and stocked up so that we could shut down for six months ahead and not turn another tip and go right ahead doing business. We feel it a great deal more than in South America or Europe or Australia, and particularly in the last few months. This month, now, judging from the way things stood when I left Chicago, would not amount to much if it had not been for the orders we got abroad. You can not judge that by the reports of export, because we carry a large stock over there. We carry stock a year ahead.

Senator POMERENE. What is your foreign business now compared to what it was last year?

Mr. FELT. I guess the foreign business now for the present month would be 50 per cent of all the business, and we spend a great deal less to get the business over there than we do here; selling costs are less abroad, particularly in Europe.

Senator POMERENE. How does it compare with your foreign business last year?

Mr. FELT. The foreign shows a larger increase. Our foreign business is younger than the American business, and is increasing faster. Senator BRANDEGEE. Is your foreign business this month more than it was for the same month last year? That is what Senator Pomerene wants to know, I think.

Mr. FELT. NO; I should say it was just about the same.

Senator BRANDEGEE. Do you think all this depression in business that you have referred to is due entirely or practically to the fear of legislation that would unsettle things?

Mr. FELT. Not altogether, perhaps. There are a lot of factors, but I think that is a pretty potent factor.

The CHAIRMAN. What is a very potent factor?

Mr. FELT. The fear of the Clayton bill. I have not heard any criticism of the interstate trade commission. Of course, the Clayton bill as reported out was very much better than it was before.

The CHAIRMAN. What other factors are in this depression? You say you feel the depression is mainly in this country, judging by your business, than it is in other countries.

Mr. FELT. Yes.

The CHAIRMAN. What other factors are there that have contributed to that depression?

Mr. FELT. Well, interest was higher in all countries a few months ago. Money was hard to get on account of the Balkan wars, etc., and that started it a little bit, particularly in Europe. The financial stringency in Germany was very great. You could not judge it by the financial reports, because they were not true in regard to Ger

many, and when we once get started downhill it is pretty hard to turn. The railroads are complaining and are not doing much additional new building-not doing much beyond maintaining their way. That would have an effect. Everything else looks good. I believe interest on 90-day notes in New York last week, or week before last, was lower than it was ever known before; but there are a great many idle men, too, and nobody will take that money and put them to work.

Senator BRANDEGEE. Do you think it is a good outlook for business when nobody wants to put money into any new business?

Mr. FELT. No.

Senator BRANDEGEE. Money is a drug in the market, is it not?
Mr. FELT. Yes.

Senator BRANDEGEE. And yet they are not anxious to lend it, are they?

Mr. FELT. They are anxious to lend it if you have got good security.

Senator BRANDEGEE. But I mean for a new business venture?

Mr. FELT. They are not starting anything new. Labor troubles, of course, and the fear of labor troubles have quite a material effect on it.

The CHAIRMAN. How would the times to-day compare with other times in your experience as to depression?

Mr. FELT. They are not as bad as they were in 1907. I am only speaking just for one concern.

Senator BRANDEGEE. They had a panic that year, did they not? Mr. FELT. Yes, sir. We could not sell anything.

Senator BRANDEGEE. While you are only in one particular business, you manifest some knowledge of the loan markets and of the international situation, and you think the general business in the country is not first class, do you not?

Mr. FELT. It is not first class. We carry a bank account in Berlin and one in Paris and one in London, and naturally we watch the finances considerably.

Senator BRANDEGEE. Do you think it would help business any if Congress would adjourn?

Mr. FELT. I certainly do. [Laughter.]

Senator BRANDEGEE. You see, I do not want to beat about the bush at all.

Senator MYERS. Have you any ideas to express about the propriety of limiting to domestic trade the laws against companies in restraint of trade and excluding foreign trade from the operation of those laws?

Mr. FELT. I have not thought about that very much, but I do not see why anybody would want to combine with regard to foreign business.

Senator MYERS. You have not experienced anything that would lead you to see any necessity therefor?

Mr. FELT. No, sir.

Senator MYERS. You have not had any experience with foreign buyers combining or agreeing to compete upon prices?

Mr. FELT. No, sir. Of course I know that they do combine in Germany under the approval of the Government.

The CHAIRMAN. They combine for the purpose of lowering prices? Mr. FELT. No; but for maintaining prices.

The CHAIRMAN. Do they combine with a view to getting the products or other articles at a lower price than the normal price? In other words, restricting buyers in such a way as to diminish the price for which the things are sold to the buyers.

Mr. FELT. Not to my knowledge.

Senator MYERS. You have not encountered any such experience with foreign buyers in your line of business?

Mr. FELT. Not at all.

(The witness was excused.)

The CHAIRMAN. Is there anyone else who wishes to be heard? Mr. BUSH. I would like to address the committee briefly.

STATEMENT OF MR. S. P. BUSH, PRESIDENT OF THE OHIO MANUFACTURERS' ASSOCIATION, COLUMBUS, OHIO.

The CHAIRMAN. What business are you engaged in?

Mr. BUSH. Steel castings; the manufacture of steel castings. I merely want to reinforce a little what Mr. Stackhouse said. I am clothed with the same authority to speak on this particular subject that any officer of an association would be clothed with. The particular items in any of the measures that are under general consideration have not been submitted to a referendum vote. We have in our association, however, a very large amount of correspondence and communications from members in which they express the opinion that Mr. Stackhouse has expressed-that there is so much that is being considered by Congress apparently with a great deal of favor and in response to what appears to be a popular demand for things that vitally affect the economic questions that are intimately interwoven with manufacturing and questions on which there is no crystallization of opinion, they feel, and I express that conviction, as Mr. Stackhouse has expresed it, as to most of these things in which the manufacturer is interested, it would be better to defer any action on them for the present.

The inability of any of us to write a law or any particular section of a law with reference to any one of these economic questions is acknowledged, and I do not believe that we can do much in the space of a year. Gradually our opinions are becoming crystallized. We are anxious that certain facts that are economic in effect shall be separated from those things that are not economic. To be perfectly frank, the question of restricting competition is one with which you are familiar. It is not worth while to take up your time in going into an elaborate discussion of it. It is not necessary. I have appeared once before this committee two years ago, and I know that it is a long story. But, nevertheless, the feeling is very profound that a certain amount of cooperative effort is absolutely necessary, and to eliminate all cooperation and make it unlawful for competitors even to attempt any cooperative effort would be & grave mistake. We fear that. If you ask us what we fear, that is one thing that we fear. We fear that we may, as things have been appearing, be discriminated against-the manufacturer and the business man.

Not that we are anxious to stand in the way in the

the

least of eradicating abuses, which we know of as well as you, probably better, but simply to protect in a national way industry, product of labor, the product of capital.

To-day the situation is intensely uneconomic. It is wasteful. Competition is unnecessarily savage. The evil effects of it are coming to the surface every day.

These are just a few remarks showing you one of the things we have in mind.

In reference to the trade commission bill, I think it goes without saying that we, as citizens and manufacturers, must leave it to the judgment of such a committee as this. With all of the information which has accumulated during the past two or three years it should know just what powers such a commission should have. We believe in a commission as preferable to the existing Bureau of Corporations, for the reason that it is continuous in its operation and removed from political activities.

We believe that the very existence of such a commission and the Sherman law as it stands to-day, with the interpretation put upon it by the court, will provide every immediately necessary safeguard against business abuse, and that by considering one question at a time, with a view of recommending an amendment which will with certainty eradicate an evil and still permit good practice to exist, will have the effect of allaying the fear of the business world.

As to the amount of power that the commission should have, we must assume that it must have enough power, and I assume that as much power as the Bureau of Corporations now has must be necessary. Further, that a commission is not going to abuse its power. That is all I have to say on the subject, gentlemen.

Senator BRANDEGEE. What do you mean by the encouragement of some cooperation? I do not recall the exact phrase that you used, but there was a necessity for some sort of a cooperative effort.

Mr. BUSH. I mean, sir, that competition between competitors can be carried too far. It is wasteful and uneconomic, not in the interest of the whole or of any part. That is the thing that leads to monopoly which we desire to eradicate.

Senator BRANDEGEE. You mean that there ought to be some cooperation allowed that in its effect might limit competition?

Mr. Busн. Unquestionably.

Senator BRANDEGEE. And how far competition can be limited without being in restraint of trade, and so prohibited by the Sherman law, is something that nobody can tell until the actual facts of the case have been presented to a court and the court has ruled?

Mr. BUSH. That may be very decidedly helped by a trade commission.

Senator BRANDEGEE. How can it, unless the trade commission is given authority to approve certain agreements among competitors? Mr. BUSн. I assume that you could not take away from anybody the ability to go to a court; that you would not-at any rate at one step-lodge in the commission final power. You might do so subsequently, but I should say that you would not want to do it at once. Further, Senator, I would say that the great body of manufacturers, as well as other people, are giving expression on this trade commission bill with great particularity, and that expression I, for myself, would abide by. It will come to you through the Chamber