ew York may deem it good policy to encourage the carrying on of
industry in a corporate form. Texas may take a different view and
conclude that the solution of the trust problem lies in suppressing
certain classes of corporations altogether. Under this decision it lies
within the power of Texas and her associates if sufficiently numerous to
impose their view on New York and make it impossible for her domestic
industries to be carried on profitably in a corporate form. And yet the
possibility of impressing the will of one state or group of states upon
another state with respect to her internal affairs is the very thing
which the founders of the republic sought most carefully to avoid. Had
it been understood in 1787 that the grant of taxing powers to the
General Government involved such a curtailment of state independence,
few states, in all probability, would have been ready to ratify the
Constitution.

XII

THE FEDERAL GOVERNMENT AND THE TRUSTS

The curbing of monopolies and combinations in restraint of trade was no
part of the functions of the Federal Government as planned by the
framers of the Constitution. To their minds such matters, under the dual
system of government which they were establishing, belonged to the
states. The Constitution was designed to limit the National Government
to functions absolutely needed for the national welfare. All other
powers were "reserved to the states respectively or to the people."

As time went on, however, and industries expanded it was seen that the
power of no single state was adequate to control concerns operating in
many states at the same time. The need of action by the General
Government became manifest. Power in Congress to legislate on the
subject, albeit somewhat indirectly, was found in the Commerce Clause of
the Constitution, and in the year 1890 the Sherman Anti-Trust Act was
enacted.

Few statutes have aroused more discussion or been the subject of more
perplexity and misunderstanding. President Taft's remark, made after the
decisions of the Supreme Court in the Standard Oil and Tobacco Trust
cases,[1] that "the business community now knows or ought to know where
it stands," was received with incredulity approaching derision. Yet from
a lawyer's point of view (and it must be borne in mind that the
President was a lawyer and is now Chief Justice of the Court) the
statement cannot be controverted. The decisions in the Standard Oil and
Tobacco cases did in