Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-01-03
THE RULE OF CORPORATE GRANTS.

In paper read before the American Eco
nomlc Association by Prof. H. C. Adams
he brought out series of novel conclusions
upon grants of corporate privileges 1t is
not material to trace the process by which
Prof. Adams in studying the question of
statistics as means of correcting corporate
abuses" reached the following results, but
these are in themselves interesting:
i. The granting of corporate privileges should
be limited to those businesses in which the in
terests of the public predominant over the in
terests of the individual. corporators.
2. All businesses in which the interest of the
public predominant over the interests of the in
dividual incorporators should be obliged to as
sumo corporate form.
g. All corporations should be required to
make such reports as will enable the Govern
menr. acting under rules prescribed by law, to
direct their policy and control their administra-
tion.
l. All businesses, other than those organized
as corporations, should be subject to inquiry,
though not to control. the purpose of the in.
duiry being to determine whether or not busi-
ness in any case should be required to assume
corporate form.
in an original theory concerning the grant,
ing of corporations, they work out the theory
to such lengths MS makes it practically
new one. 1t is evidently based on the idea
that the grant of all corporate privileges
should be united with strict governmental
regulation. But the regulation which it
proposes is evidently of the kind which
raises the alternative already presented in
the proverbial antithesis, whether the Gov
ernment shall own the corporations or the
corporations shall own the Government.
The best measure of the accuracy of the
theoretical process which works out such
conclusions is afforded bv its practical re-
suits, and Prof. Adams theories can be
readily judged in that way. A reasonable
construction of it would exclude from cor
porate organization all banks except, per-
haps, those issuing circulating medium, in
surance investment and trust companies.
Or if there is any doubt whether the inan-
cial corporations involve greater public
than private interest 1t would establish a
rule of supervision by which either they
would be excluded or private banking firms
or individuals conducting an investment
would be forced to assume corporate form. In
addition there is no doubt that Prot. Adams
rule would place outside the corporate
limits the entire bulk of manufacturing cor
porations, from rolling mills to dry dock
companies, and would prevent the almost
universal practice of associating capital
under the corporate organization for such
enterprises. 1t is plain that such a rule
would bring large fraction-probably more
than half of the enterprise of the nation-to
dead stop.
There is much more practical sense in the
more generally received idea that corporate
privileges should be granted for the asso-
citation of capital to carry on legitimate en-
terprises for which individual capital may
be necessary. Thus itrequires about 5000, 900
to start Bessemer steel mill. One man
or firm may have enough capital to do that,
but, on the contrary, it may be necessary and
desirable to unite the capital of two or