Omaha daily bee., 1897-01-17

DEALING UTTn PERPLEXfNG PROBLEMS
Nearly every legislature now in scs
sion Is wrestling with the perplexinf
problem involved in the control rcgu
lation or restriction of corporate com
binations OF every conceivable form
Experience in dealing with such com
binutiouS has up to this time been fan
from encouraging. The great majority
Of all combines to restrict and destroy
competition are beyond the reach of
state legislation 10y reason of the fact
! that they are engaged in interstate huSi-
ness and find means to evade anti
combine laws through appeals to federal
courts.
! In this. as in the regulation and con
troll of railways, state lawmakers are
! baflled by the states rights doctrine that
enables the combines and trusts to play
shuttlccock' and battlcdore across state
| lines That will apply to insurance
combines as much as it will TO the coal
| trust. the cracker trust, the sugar trust
and every giant combination that
| lllblulIpllLtN NiNliIlulluii anu 'iii'''''''
competition in the ncCessaries of life.
| one state may prohibit under severe
penalties the fixing of insurance rates
for all companies by Il single under
writer's board. but when the board does
the ratc-fXing from another state the
offenders are out of reach of the
| prosecuting officers of the state where
| the rates are eXactcd
The perpleXing problem is how to
bring combines doing an interstate bust
ness under the operation of state laws
that can be effectually enforced. SO
far no law has been framed that takes
into account existing conditions. Mani
feStly no effective regulation and con
troll of corporate combinations or
corporate eXtortion can be had without
concert of action. There must be both
congressional and state legislation
framed on lines that will prevent evasion
under any pretense.
The first step in restraint of the worst
corporate abuse should be taken by the
states in the general supervision of all
concerns incorporated under state law.
All states now regulate and supervise
corporations engaged in banking and
insurance within their jurisdiction. Why
should they not also exercise reaSona-
BILE control over corporations engaged in
other lines of business? Such interfer-
cnce by the state should not be designed
for their suppression or oppression, but
4. . Ia, Of a ,,tillia aud thniI,
own protection.
The cancer that has been eating the
vitals of the American industrial system
is the fraudulent capitalization of corpo
rations of every description. The money
markets have been flooded with billions
Of fictitious stocks and the credit of
America has been well-nigh ruined by
the issue of bonds and mortgages that
are based on grossly overvalued prop.
critics and worthless securities. This
systematic imposition upon investors has
had more to do with the financial de-
preston and commercial distress from
which this country has been suffering
than all other causes taken together
1t has shaken the confidence of the
worlds iinancierS in the integrity OF
American promoters and the stability
of American institutions.
The remedy lies in the prevention of
further fraudulent and fictitious stock
ard bond issues. This abuse can and
should be abolished by state and ma
tional legislation that would subject
I'LL corporations to publicity of resources
ana liabilities. BY prohibiting tha
which do not represent cor
responding amount of capital and by
establishing bureaus of supervision that
would enforce these provisions by
frequent inspection the worst abuses of
corporate combinations would be done |
away with. The registration of corpo
rate stocks and bonds by national and |
state boards would result in the reiec
tion by investors of all securities that |
failed to pass muster. Honestly con |
Quoted corporations would be materially |
by this system just as are |
the honestly conducted banks by the |
national and state bank examinations
Dishonest and fraudulent concerns
would be wceded out on made harmless
for evil.
Here is the place for Nebraska to set
the example. Let the legislature pass
nm act requiring every corporation do
ing business in the state to incorporate
in Nebraska and submit to the reasOna
BILE requirement of recording its stock
and bonded capital. With such a re-
form inaugurated, other states would
sooner or later join with us in trying to
solve the perplexing problem of corpo-
rate regulation.
A PROPER REGULATION.
Secretary Olney has recently revised