The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1897-03-12
TRUSTS AND M~ONOPOLIEs.
Report of the Lexow Committed on it's In
vestigafion-Its Observation-Disclosures.
npsis of Bids Being Drafted by it for
Remedy of Existing Evils of Monopoly
by Big Corporations and Trusts.

Remedy of Existing Evils of Monopoly
by Big Corporations and Trusts.
Albany, y. Y, March 9.-The Loxow
committee met this morning and the
members affixed their signatures to
the report Of the trust investigating
committee. The report is an unusually
lengthy one. embracing thirty-eight
typewriter pages.
The testimony taken before the COM
mittee, the decision of other Investigate
ing committees and of the United
States supreme court are commented
upon at length, and much attention is
devoted to the operation of factors
agreements. In brief, the report says:
Trust agreements no longer form the
basis of, or are they a constituent part
of the aggregations of capital which
are commOnlylOCked upon now as trusts
In discussing this question Of trusts,
the committee finds that it is unneces-
sary that absolute monopoly exists in
order that the operation of a trust
may be secured. The committee di-
Vides combination and capital into
three classes. First, are corporations
which operate under public franchises:
second, legal corporations, which are
protected by patents and trademarks,
and, third. those that depend wholly
upon the use Of capital n where
monOpolies exist, not naturally or by
III DON oitL NY ICdooI1 ~ liz
control Of competing companies and
the product, in order that the great
est net results may be shown.
The does not quite agree
that the trusts and mOnODolies COM
planned OF are a natural result OF the
progressive evolution of the times, and
while it does not all COM
binatiOns of capital as trusts in the
proper sense, it does recognize that
unless the evils complained Of against
n onr,l 4; ~ on, 90 -,oo1l -
tempting to control the supply and
price of products are checked it will be
but a short time before a continuance
of the operation of such combinations
will tend to stiie competition ana place
the regulation of supply and price of
product. as well as the business of the
country, in the hands of a few.
IOuchfng the question of Over-capi-
talizatiOn of these modern cOr1bina-
tons of wealth. the committee finds
that this is one of the most serious
evils which lead to the complaint
against trusts for not being content to
earn a fair return on the actual capital
invested. They seek to wiring increas-
ed profits out of the by rea-
son of an decentralization. The
committee condemns the practice of
domestic capital operating in this state
under The incorporation of another
state. and especially New Jersey. The
committee succeeded in securing copies
Vi tie ldclOTS agreements IN use by
all of the different corporations investi-
gated, and finds that their use clinches
the system of monopoly which has
OVerSpread the country, and renders
such combinations of wealth perma-
nent. by making competition impossi-
BILE.
1t IS obvious that. as the federal
courts have placed so narrow a con-
structiOn upon the limit of their au-
thority. no relief touching the operation
of factors agreements can be expected
from that quarter, except through the
aid of a constitutional amendment. It
seems to us that the operation of trusts
and especially factors agreements, can
be satisfactorily reached Only by the
exercise of q power of genera juris-
dictiOn throughout the United States,
and that any attempt to prevent the
evil by local legislation will prove
abOrtive, or, at least, Insufficient. A
review of the courts decision regard
ing factors agreements leads the COM
mittee to the opinion that the cOnstitu-
tiOnal freedom of contract may not be
interfered with, and that they can be
attacked only when it is shown that
they attack the rights, constitutional
liberty and the privileges of the peOple
The committee recommends that the
laws be amended so as to place a limi-
tatiOn upon the stock of corporations,
especially as regards foreign cOrpOra-
tons operating in this state, and that
foreign corporations be brought under
the jurisdiction of the laws of this state
which are provided for the protection
of creditors and shareholders Of dOmes-
tic corporations.
The committee recommends and is
now preparing a bill carrying out these
suggestions, and will make provision
for the right of a citizen to begin a
civil action and secure an injunction
against any trust operating in this state
in violation Of these recommendations,
with the final view of having the Ii
Cense of a foreign corporation to do
business in this state revoked If 1t is
found thai such foreign corporation is
not complying with all the provisions
of New York state laws. This is a
method so drastic that it will be further
considered by the committee before a
bill is finally submitted.
An important difficulty seems to be
that of securing the testimony neces-
sary to a judicial ascertainment of a
violation of any provisions of New
York state laws by so-called trust or
foreign corporations. The committee is
preparing a bill which will empower
the attorney general to investigate a
trust on the complaint of any citizen
of an alleged violation Of law, which
bill will empower he attorney general
to examine witnesses under subpoena,
to be issued on the attorney generals
ex parte application by a justice of the
supreme court. The examination OF
witnesses by the attorney general is to
be conducted in the presence of a court
of Justice and the testimony is to be
filed in the attorney generals ONCE.
This law will give immunity from pun
ishment to witnesses testifying on sub
poenas issued by the attorney general.
The committee is not yet satisfied that
if can frame a law restricting the
operation of factors agreements Whlch
will be constitutional.
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