Morning journal and courier., 1883-08-22
HOW TO TREAT CORPORATIONS.

Chief Justice Cooley of Michigan has sonae. thing to say in the current number of the North American Review concerning 'tState regulation of corporate profits which ought to have the earnest attention of just those people who are not likely to pay much atten- tion to it. His paper is very clear and inter esting.
 Judge Cooley does not think that the prob lem of regulation of ofcorporations by the State is as simple as to many it appears to be. h. deed, he thinks that much of the legislation against corporations which is promoted in the sincere belief that the public good re- alone in the matter of railway regulation that lawmaking is likely to be ill-advised and det- rimental to both public and private interests. The supply of public conveniences to cities is commonly monopoly, and the protection of the public against excessive charges is to be te.nd, first, in the fact that low prices gen erally extend the market, and, second, in the municipal power of control Except in very large cities public policy requires that for supplying light or water there should be but one corporation, because one can perform the service at less rates than two or more, and, in the long run, will be certain to do But scheming men make periodical attacks on cor porations existing for these and similar pur- poses, and with popular cry for their watchword, they can always enlist local in- terest in their favor. If they succeed in ob- taining rival franchise, the subsequent his tory is commonly this: A war of rates for 8 askI .I1 1e e.,. chise to the owners of the other, or divis- ion of the territory, or an agreement upon charges. The final result is that the two supply the market at greater cost than the one, and the additional cost is paid by the public. Whoever expects that destructive competition is to be continued indefinitely must have faith in the integrity and public virtue of local boards which experience scarcely justifies. The legislation which ex- poses great property, invested in public enterprise, to disastrous risks offers direct temptation to irregular and crooked proceed ings If men solicit from city council 8 franchise which they cannot Iegitimately make profitable, it is natural inference that they propose either to use it as trading prop erty or in some way to find their profit in the manipulation of future councils.
 The true policy of the State, says Judge Cooley, is to give due and full protection to corporate property and at the same time to insist on the faithful performance Of corpor- ate duties. He continues It is no more for its interest to invite and encourage raids on corporations than 1t is to countenance vast corporate profits for which no adequate re- turn is made. In some kinds of business competition will keep corporations within the limits of reason in their charges in oth- CTS 1t will not When is will not, it may be- come necessary to leeislate upon profits. If the business is simple, like the supply of light or water, this can be done by prescrib- ing tariff of rates but sometimes tariff of rates prescribed by law could only be mis- chievous It would generally be so in rail road transportation of property, except in the case of mere local roads Rates must yield and accommodate themselves to in- numerabla circumstances and contingencies, expected and unexpected and these must be met and provided for by the governing power as they arise. No other known business requires larger technical
 skill, greater ability, or wider ex- perience. And the ablest. wisast and most experienced man would be guilty of an aci of supreme folly, if, with ample power, he