A number of observers have noted this line toward the beginning of President Obama’s Second Inaugural Address: “Together, we discovered that a free market only thrives when there are rules to ensure competition and fair play.” While it clearly speaks more broadly than just to antitrust, it clearly includes antitrust as one of its central elements.
An inaugural address has special prominence and importance. It marks the beginning of a Presidential term, the very first speech of a newly-sworn-in President, addressing the entire Nation, and the world, and most likely to be seen or read by the greatest number of people. It is the President’s foremost “this is what I believe” speech. While a speech is not a sustained policy, the antitrust community should be heartened that the President would choose to include an unmistakable salute to the laws that protect competition in our marketplace, that he decided it was important enough to make his final cut.
President Obama’s reference is by no means the only reference, or even the most extensive. But it is the first in more than 80 years. Indeed, references to the antitrust laws, or to rules of competition, have occurred in Presidential inaugural addresses only five times before – the most recent being in 1929.
Here are the relevant passages from those addresses, as those addresses appear on a website provided by the Avalon Project of Yale Law School’s Lillian Goldman Law Library. They are Cleveland’s second (the first inaugural address after enactment of the Sherman Act); McKinley’s first (the next one after Cleveland’s, stressing that the Republicans supported the Sherman Act no less than the Democrats); Taft’s (who was Solicitor General when the Sherman Act was enacted, and went on as President to support vigorous enforcement of the Sherman Act), Wilson’s second (a somewhat oblique reference, considering that this was the first inaugural address after enactment of the Clayton Act), and Hoover’s (a proponent of greater cooperation between businesses, and between businesses and government, but under whose Presidency the Antitrust Division was created in the Justice Department).
From President Cleveland’s Second Inaugural Address, 1893
“The existence of immense aggregations of kindred enterprises and combinations of business interests formed for the purpose of limiting production and fixing prices is inconsistent with the fair field which ought to be open to every independent activity. Legitimate strife in business should not be superseded by an enforced concession to the demands of combinations that have the power to destroy, nor should the people to be served lose the benefit of cheapness which usually results from wholesome competition. These aggregations and combinations frequently constitute conspiracies against the interests of the people, and in all their phases they are unnatural and opposed to our American sense of fairness. To the extent that they can be reached and restrained by Federal power the General Government should relieve our citizens from their interference and exactions.”
From President McKinley’s First Inaugural Address, 1897
“The declaration of the party now restored to power has been in the past that of ‘opposition to all combinations of capital organized in trusts, or otherwise, to control arbitrarily the condition of trade among our citizens,’ and it has supported ‘such legislation as will prevent the execution of all schemes to oppress the people by undue charges on their supplies, or by unjust rates for the transportation of their products to the market.’ This purpose will be steadily pursued, both by the enforcement of the laws now in existence and the recommendation and support of such new statutes as may be necessary to carry it into effect.”
From President Taft’s Inaugural Address, 1909
“I have had the honor to be one of the advisers of my distinguished predecessor, and, as such, to hold up his hands in the reforms he has initiated. I should be untrue to myself, to my promises, and to the declarations of the party platform upon which I was elected to office, if I did not make the maintenance and enforcement of those reforms a most important feature of my administration. They were directed to the suppression of the lawlessness and abuses of power of the great combinations of capital invested in railroads and in industrial enterprises carrying on interstate commerce. The steps which my predecessor took and the legislation passed on his recommendation have accomplished much, have caused a general halt in the vicious policies which created popular alarm, and have brought about in the business affected a much higher regard for existing law.
“To render the reforms lasting, however, and to secure at the same time freedom from alarm on the part of those pursuing proper and progressive business methods, further legislative and executive action are needed. Relief of the railroads from certain restrictions of the antitrust law have been urged by my predecessor and will be urged by me. On the other hand, the administration is pledged to legislation looking to a proper federal supervision and restriction to prevent excessive issues of bonds and stock by companies owning and operating interstate commerce railroads.
“Then, too, a reorganization of the Department of Justice, of the Bureau of Corporations in the Department of Commerce and Labor, and of the Interstate Commerce Commission, looking to effective cooperation of these agencies, is needed to secure a more rapid and certain enforcement of the laws affecting interstate railroads and industrial combinations.
“I hope to be able to submit at the first regular session of the incoming Congress, in December next, definite suggestions in respect to the needed amendments to the antitrust and the interstate commerce law and the changes required in the executive departments concerned in their enforcement.
“It is believed that with the changes to be recommended American business can be assured of that measure of stability and certainty in respect to those things that may be done and those that are prohibited which is essential to the life and growth of all business. Such a plan must include the right of the people to avail themselves of those methods of combining capital and effort deemed necessary to reach the highest degree of economic efficiency, at the same time differentiating between combinations based upon legitimate economic reasons and those formed with the intent of creating monopolies and artificially controlling prices.”
From President Wilson’s Second Inaugural Address, 1917
“The four years which have elapsed since last I stood in this place have been crowded with counsel and action of the most vital interest and consequence. Perhaps no equal period in our history has been so fruitful of important reforms in our economic and industrial life or so full of significant changes in the spirit and purpose of our political action. We have sought very thoughtfully to set our house in order, correct the grosser errors and abuses of our industrial life, liberate and quicken the processes of our national genius and energy, and lift our politics to a broader view of the people's essential interests.”
From President Hoover’s Inaugural Address, 1929
“The election has again confirmed the determination of the American people that regulation of private enterprise and not Government ownership or operation is the course rightly to be pursued in our relation to business. In recent years we have established a differentiation in the whole method of business regulation between the industries which produce and distribute commodities on the one hand and public utilities on the other. In the former, our laws insist upon effective competition; in the latter, because we substantially confer a monopoly by limiting competition, we must regulate their services and rates. The rigid enforcement of the laws applicable to both groups is the very base of equal opportunity and freedom from domination for all our people, and it is just as essential for the stability and prosperity of business itself as for the protection of the public at large. Such regulation should be extended by the Federal Government within the limitations of the Constitution and only when the individual States are without power to protect their citizens through their own authority. On the other hand, we should be fearless when the authority rests only in the Federal Government.”