The Letter Law and the Golden Rule
I
PRIMITIVE law, the jurists tell us, was in all countries technical and formal. It dealt in ceremonies and procedures. Form came first, while justice lagged and came last. Perhaps it was the failure of law in old times to make approximation to justice, that leaves to us two great figures of personal justice : the rarely realized embodiment of the layman’s ideal, Harun-al-Rashid, and Saint Louis.
Down the ages they have come to us, each called by the same undying name, ‘The Just.’ In themselves they unite the power of the law, and the will to do justice, not according to procedure long since gone and forgotten, but according to the Golden Rule.
Under the big tree at Vincennes, history pictures to us Saint Louis dispensing the high justice, the middle justice, and the low, to those who flocked to him appealing for the righting of their wrongs. It pictures Harun as the protector of the poor, going about among his people, punishing the wrongdoer and giving justice to the oppressed.
The Puritan, and later the Anglo-Saxon, ideal of justice resolutely supplanted the type which these historic figures embody. Ours was to be, as the ancient Charter of Massachusetts solemnly stated, a government of laws and not of men. Laws should be made so that the people could read and understand them; so that standards should be set, which judges should follow and enforce.
Personal justice, justice dependent alone or mainly upon the personal concept of right in the heart of the judge, — a concept varying with the moral calibre of judges, — was to be discarded. The law was to be, in the main, a book, enforced, to be sure, by a person, but in accordance with the book.
The whole history of law is the struggle for a working compromise between two ideals: judicial discretion and the Saint-Louis ideal, on one hand, and the letter law, superior to and binding upon the judge, and he its sworn servant, on the other. The vast mass of our statute-making, state and national, the intricate codes of procedure now governing most of our courts, clearly indicate that for many generations the letter-law ideal has been unduly dominant with us. There are many reasons why this has been true.
One of these reasons was illustrated to me some years ago, in the course of a conversation with a prominent member of the bar in another state. I was conferring with him about an important lawsuit, which was to go to trial in that state, and in which clients of mine were parties. I had inquired about the personality of the judge who would try the case. My associate’s answers had been far from reassuring. The judge was obviously, on his story, no Harun or Saint Louis. To reassure me, he concluded, however: ‘You know as well as I do that so long as politicians nominate and the public elects judges by general elections, the main protection of litigants must be, not in the character of the judge, but in the definite character of the law itself. There is perfectly clear law in our case on our side, and the judge will have to follow it.’
However satisfactory, in a short-sighted way, such philosophy may be in its results on litigation (and it is by no means always satisfactory and effective), a much greater question still remains, and one which becomes continuously more important.
The question is this: how much more complicated can an increasingly complex society permit its law to become, and avoid disaster, or even allow the continuance of normal business?
Interstate commerce is now international trade. Relationships in business and industry are increasingly complicated. They operate at an increasingly higher speed. Can the demands which they make upon the law be met by a system of justice which is, at the same time, intricate and slow? Is not a return to a simpler justice necessary, if even our ordinary business questions and disputes are to be solved without an intolerable amount of friction and expense? As economic power increases in certain industrial groups, is there not a greater need for increased power of law to deal with them — a power which can come only from simpler ethical standards, broad enough to be adaptable to all conditions to which their application is needed?
By a quite unconscious process, these questions are being answered by the courts, so far as they are permitted by the lawmaking authorities to answer them. Out of complexity comes the possibility of simplicity in the law by a process of healthful evolution. As an old lawyer once said about it to me: ‘There are so many precedents; so many judges have written so many opinions in so many cases, that a judge who really wants to do what is right to-day generally can find some precedent to support him.’ It comes also by a change of emphasis, a certain revaluation of essentials, under which our law tends to become primarily a system of justice, instead of a continuously more intricate and elaborate system of logic.
Students of the law who began their studies twenty or thirty years ago will recall the not infrequent decisions wherein the courts declared themselves regretfully constrained to a certain decision, which they felt to be unjust in the particular case, but which they said was a conclusion necessary to the logic of the law, to avoid dangerous precedents. Portia made much the same answer, it will be remembered, when Bassanio wanted her for once to wrest the law to her authority. The modern note tends to be somewhat different. The logic of the law has ceased to be so supremely important. Let me illustrate —
Here is a very recent case passed upon by the New York Court of Appeals. A builder sued an owner, for whom he had built a country place, for the balance of the contract price. The owner refused to pay, saying that the builder had not kept his contract. The contract called for a certain specified wrought-iron pipe in the plumbing of the house. By inadvertence, the builder had put in an equally good pipe of a different brand, though the same in appearance, quality, and cost — indeed, the same thing, except that it was made in another place.
After the pipe was all in place, the owner heard of this error and ordered the pipe taken out, though it was encased in the walls and could not be removed without great expense. The builder refused to remove it, and asked to be paid the balance due him on the contract. The Court of Appeals declared that he should be so paid.
In answer to the owner’s demand for the letter of the law, and, without deviation, the specific pipe of the contract, the Court declared: —
We must weigh the purpose to be served, the desire to be gratified, the excuse for deviation from the letter, the cruelty of enforced adherence. The willful trespasser must accept the penalty of his transgression. The trespasser whose default is unintentional and trivial may hope for mercy if he will offer atonement for his wrong.
Elsewhere, in the opinion, occur these significant words: —
Those who think more of symmetry and logic in the development of legal rules than of proper adaptation to the attainment of a just result will be troubled by a classification where the lines of division are so wavering and fluttering. Something doubtless may be said, on the score of consistency and certainty, in favor of a stricter standard. The courts have balanced such consideration against those of equity and fairness, and found the latter to be weightier.
The process of unconscious development of simplicity in the direct application of ethical principles to modern justice has, as an illustration, the law which to-day determines the right of large organizations of capital to continue in existence when they have limited or restrained competition.
It was only a decade or two ago that jurists were scornfully criticizing Roosevelt’s layman distinction between ‘good’ and ‘bad’ trusts. The notion that great aggregations of capital could be compelled to dissolve because they were harmful, or allowed to continue because they were, on the whole, beneficial to the public, was considered absurd. To differentiate them by their character and conduct, instead of by their size and power, was deemed a distinction too shadowy, too idealistic, and too impracticable.
Notwithstanding all this criticism, the substance of Roosevelt’s principle is not far from being adopted in the courts of the United States. Two features of the modern law of capitalistic combinations stand out in recent decisions. The first is that there is no form of combination which results in a conspiracy in restraint of trade which can avoid the disfavor of the law. The law wholly disregards to-day the form of such attempts, and looks only to the purpose sought, and to the substance of its accomplishment. Old-fashioned ‘trusts,’ holding companies, pooling agreements, and a dozen other devices, have met with the same fate. The forbidden purpose being shown under any form, the result was the same.
The other feature in the evolution of the antitrust law is this: the growing tendency of the court to consider, in reaching its final judgment, certain matters which, only a few decades ago, would have received little, if any, attention.
Here, for example, is a great corporation before the bar of the Supreme Court. Its dissolution is asked as a combination in restraint of trade. We find the Court, in testing the corporation’s right to existence, seeking the answers which its corporate life-history gives to questions like this: —
How did it attain its growth: by oppressive methods applied to competitors; by trickery or fraud; by unfair practices; or was its expansion the result of superior business ability honestly applied?
How has it treated its competitors?
How has it used its powers?
Has the public been harmed or benefited by its existence?
Have the restraints upon trade which it has effected been, on the whole, reasonable and just, or otherwise?
This tendency to test the right of great corporations to live, by studying their conduct in the use of power, is a most interesting and important tendency, capable of very considerable extension. It is a very recent idea. Only a few years ago, the courts took an entirely different attitude. The test was not the abuse of power: it was the existence of power.
Combinations in restraint of trade were illegal, if they had the power to restrain trade, whether they abused that power or not. Here, for example, was an association of coal-dealers in a little city in New York. Business had been bad, and they got together and agreed to fix prices. Indicted for a combination, they sought to prove on their trial that the prices actually fixed were entirely fair to the consumer, and that they left only a modest compensation for themselves. This evidence was refused by the trial court, as wholly irrelevant. The highest court of the state declared this ruling to have been correct.
This is not the place for an extended consideration of the law’s attitude toward competition. The pendulum may swing back again. The courts ultimately may find that the problems connected with the abuse of power are too great for courts to determine whether reasonable use has been made of power over competition.
The ‘rule of reason’ laid down in the Standard Oil and American Tobacco cases aroused violent discussion a few years ago. The difference between the ’ rule of law,’which broke up the TransMissouri Freight Association and the Northern Securities Company, and the ‘rule of reason,’ which, not very long ago, permitted the continued existence of the United States Steel Corporation, represents a revolution in judicial thinking on this great economic problem.
I am not arguing that the tendencies which are here discussed are finalities. I have an old lawyer friend who scorns the implications of these later trust-decisions as little experiments with the Golden Rule. He declares that they threaten wholly to destroy all logic or reason in the Antitrust act. He assures me that the time is coming soon, under these monstrous judicial impracticabilities, when the advice of a superannuated clergyman will be worth more to a big corporation, as a protection against the Sherman Antitrust law, than all the learning of a veteran corporation lawyer. I hope that he is not wholly right. His illustration, however, suggests a wholly new pasture for Christian missions — an almost wholly untouched field.
II
What the final determination of the courts will be on this question will depend largely upon the ultimate fate of what may be called a new administrative court, whose main function is to apply to American business what seems a very simple, yet is a very difficult Golden-Rule test for business success: whether its practices not only are legal, so far as present legal standards are concerned, but are fair. Once more we find a return to a simple ethical standard, an attempt at applying a simple test to complex and difficult business problems.
This court is the Federal Trade Commission, which exists to enforce fair practices in modern business. The philosophy of the law which created it has been well expressed recently, by Justice Brandeis, in a most interesting dissenting opinion in the United States Supreme Court. His statement may be summarized thus: The law was intended to prevent success by unfair means. Instead of waiting until, by trickery and unscrupulous methods, huge aggregations of power and wealth have swollen to a point where they become a menace, requiring dissolution, at great cost, perhaps, to innocent investors, through judicial action, these practices were to be nipped, as it were, in the bud. Business practices were to be fair. The Federal Trade Commission was to enjoin and punish unfair methods of doing business.
If the Commission has not yet received a large measure of public confidence, and the business world still considers it an irritating and meddlesome bureaucracy, it is not due to lack of merit in the principle on which it is founded. The principle itself is not unduly idealistic or impracticable, but it does require a maximum of wisdom, experience, and common sense in its administrators. The life of the Commission has been too short, as yet, lor us to pass a harsh judgment upon it.
We should remember that courts have been operated for centuries; that the body of law which lawyers call Equity Jurisprudence has grown like a coral reef, and that its foundations are laid in remote antiquity. The twilight zone between dishonest and decent practices in business still exists. This zone has existed for centuries, and the establishment of precedents which will fix, define, and eliminate the now legal and permissible, but unfair and unethical, roads to commercial success cannot be accomplished in a single generation. It is significant that we have realized the need of experimentation in this new field, of trying to find new ways of applying effectively to business a simplified moral code.
Recent developments in commercial arbitration indicate another step, and a very important one, in this unconscious process by which business seeks simpler ways of meeting its problems. Owing to the increased complexity of contract law, disputes in law courts over business transactions are tending to become unduly expensive. The trial of contract cases by jury is to-day an almost complete failure. This is due to two causes. The first is that an intricate society tends to make the business questions involved in ordinary commercial contract cases far from simple. It is too much to expect even a highly qualified jury to carry in its mind these details of commercial transactions, cumbered as they are with complicated modern instruments of commerce, the full understanding of which details are necessary to a decision of such commercial disputes. Modern contract law itself is likewise complicated and filled with learned pitfalls, which require a high degree of legal learning and also long study on each individual case. A combination of these two difficulties makes commercial law litigation uncertain in result, but entirely certain in expense. In times past, the courts have been exceedingly jealous of having legal questions decided by tribunals other than the courts themselves and arbitration has heretofore been, for various reasons, an unsatisfactory substitute.
New York, however, has recently, by a simple statute, given a new vitality to arbitration, and recently there has been created in that state a thoroughly organized association of responsible business and professional men, devoted to furnishing the ways and means of arbitration as a substitute for litigation in this type of case. Under this new arbitration plan, the merits of business disputes will be determined without the elaboration of legal technicalities, without the historic background of precedents, and without the judicial rules of evidence. It is expected that these business disputes will be determined by the intelligence and business experience of fair-minded men, applying their sense of justice along these simpler lines and making the determination of these disputes speedier and less expensive. What the ultimate effect of this latest expression of the desire for simpler standards and simpler methods will have upon judicial processes remains to be seen.
It needs only to be said at this time that the courts are now being presented for the first time with a form of competition. That this competition will have an effect, which will be on the whole a beneficial one, can, I think, scarcely be doubted.
However much the letter law extends its precedents, however much the statute law may seek to make the standards of law concrete and definite, there is an instinct in the soul of man which bids him look, not to the unending scrolls of the law, but to a Saint Louis and a Harun; to some good man whom he knows and respects, and has confidence in, more for his character than for his learning, however great. As society became complicated, this personal ideal grew so remote as to seem altogether lost in the mazes of the letter law. It never wholly disappeared. There are many little communities still in our country where the old ideal yet prevails.
I remember a town where, in my boyhood, the country doctor was also the town clerk and the justice of the peace. For fifty years he decided all the disputes which, in the cities, make lawsuits. He straightened out line fences, he assessed damages for roving cattle, and passed judgment on sheep-biting dogs. He prevented will contests by family settlements. He had, so far as I know, only two law-books — a battered copy of the Vermont Revised Statutes and Walton’s Register. I have no reason to believe that he consulted any of these authorities very much. They were useful to him only for camouflage purposes. His conclusions, however, based upon a strong sense of justice and an understanding of his people, both shrewd and kindly, satisfied his community for half a century.
I know that it may be said that this was a small and rural town, and that such rustic personal justice would be impracticable in any other form of society. I can only suggest in reply a question which comes to me with greater frequency as years pass, and the fabric of law becomes more and more complex, in the effort to deal with the problem of a society constantly growing more intricate. The question is this: how long will it be before the pendulum will swing to the other extreme — the return of the Cadi, the search for Saint Louis, the demand for personal justice administered by the good man as a substitute for our endless barren wilderness of precedents in law and a maze of indigestible statutes? Are we not approaching the climax of the letter law : coming to the day when it will seem an impossible chaos of confusion — its bulk so vast, its uncertainties so great, its complications so costly, that society must discard it as a cocoon, which prevents its growth and impedes its life? I am not arguing for this result. I can see, I think, the obvious objections to so extreme a change. Nevertheless, administrative law, made yearly more complex to safeguard cities and states against demagogues in office; judiciary law, made complicated to limit the discretion of political judges — these are, for example, sure paths to the collapse of the democratic ideal. There is no safety in them.
The fundamental mistake in the overcomplexity of so much of our modern law is that it inevitably fails to render the main service which is expected of it, that is, to protect us against the dangers of the crowd-spirit. There is no protection in law, however complicated, against that spirit, if the crowd itself makes the law. This has always been true. It was true when tested in Greece and in Rome. Both of these ancient countries disintegrated under the crowd-spirit — that spirit which governs when men cease to reason as individuals but respond to appeals which come to them as masses. Democracy is under the same peril to-day wherever public affairs are dominated and directed in the same way: when a keen understanding of mob-psychology becomes the basis of political power; when policies are determined, not by the clear and continuous thinking of individuals, but by adroit propaganda addressed to the crowd-spirit, to men in the mass, to those composite prejudices which defy reason and make wisdom inoperative.
We must learn new ways for leaving the fog of crowd-compelling propaganda — that fog which is the natural atmosphere of the demagogue. We must attain the clearer air, in which men can see and think as individuals. The almost unconscious movement toward the simplicity which this paper has sketched is, in many aspects, a healthful movement toward a return to those simpler standards essential to the successful operation of a complicated social life.
The final hope for democracy must be, not in its letter law, but in its leadership. The day must come when the people’s trust must be less in law and more in men. In the last analysis, the main test that will determine the survival of democracy will be its capacity for the wise selection of men — men sufficient in character and wisdom to be trusted with the powers of the state.