The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-03-10
PANE METHODS OF TRUSTS.
,Exow COMMITTEE MAKES
u" IFS REPORT.

,%+entfon Devoted to the Oper-
-, Of Factors Agreements--A
.i.utiOnaI Amendment Neces-
In order to Knock out the
..,t system of Factors Agree
,ts-over capitalization One of
serious Evils of the Present
co,bipatiOns of Capital.
No.. n. Y, March 9.-The Lexow
r,itfaa met this morning and the mem
yrs affixed their signatures to the report
,be crust investigating committee. The
is an unusually lengthy one, en-
Ling IS type written pages.
~ha rastfmony taken before the commit
tho decisions of other investigating
.,,oittees and of TIE United States SUI
Inc court are commented on at length,
much attention is devoted to the OPP
elton of factors agreements.
belief the report says: Trust agree
.+s ,o longer form the basis of, or are
's.y constituent part of the aggregations
,aritat which are commonly looked
I'm now as trusts. In discussing this
1lsstion of trusts, he committee finds
9esst If is unnecessary that absolute mon
onolv exists in order that the operations
" a trust may be secured.
In discussing trusts, the committee di-
,i5es combinations and capital into three
Uses First, are corporations which OPP
a+a under public franchises; second, le-
al corporations which are protected by
9s+ents and trade marks, ana, third, those
ih9t depend wholly upon the use of CAPT
al and where mOnopolies exist not natur-
an, mr. bv legal permission, but by reason
Of tinn comma mics and
the product, in order that the greatest net
results may be shown.
The committee does not quite agree that
the trusts and monopolies complained of
are the natural result of the progressive
evolution of the times, and while it does
not recognize all combinations of capital
as trusts in the proper sense, it does rec
ognize that unless the evils complained of
against mammoth combinations of wealth
attempting to control the supply and price
of products are checked, it will be but a
short time before a continuance of the OPP
Grafton of such combinations will tend to
sufe competition and place the remunera-
ton of supply and price of product, as
well as the business of the country, in
the hands of a few.
Touching the question of oVer-capitali-
cation of these modern combinations of
wealth the committee finds that this is
one of the serious evils which led to the
complaint against the trusts for not be-
ing content to earn fair return on the
actual capital invested. They seek to
wiring Increase profits out of the consum-
ers by reason of an ver-capitalization.
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 of the factors agreements in use
by all of the different corporations in
vestigated, and finds that their use
clinches the system of monopoly which
has overspread the country and renders
such combinations of wealth permanent,
by making competition impossible. 1t is
obvious that, as the federal courts have
placed so narrow construction upon the
limit of their authority, no relief touch
ing the operation of factors agreements
can be expected from that quarter, ex-
cept through the aid Of constitutional
amendment.
1T seems to us that the operation of
trusts, and especially factors agreements,
can be satisfactorily reached only by the
exercise of a power of general jurisdic-
ton throughout the United States, and
that any attempt to prevent the evil by
local legislation viii prove abortive, or
at least insufficient. 4 review of the
courts decision regarding factors agree
ments leads the committee 10 the opinion
that the constitutional freedom of con-
tract may not be interfered with, and
that they can be attacked only when it is
shown that they attack the rights, con
sutuuOnal liberties and the privileges Of
the people"
The committee recommends that the
laws be amended SO as to place a lmita-
ton upon the stock of corporations, es-
reoi9lly as regards foreign corporations
operating in this state, and that foreign
corporations be brought under the juris-
diction of the laws of this state which are
provided for the protection of creditors
ana shareholders of domestic corporations.
The committee recommends and is now
preparing bill carrying out these sugges-
tons, and will make provision for the
HSnt OF a citizen to begin a civil action,
ana secure an injunction against any trust
operating in this state in violation of these
recommendations with the final view of
having the license of a foreign corpora
ton to do business in this state revoked
II it is found that such foreign corpora
tion IS not complying with all the provis-
ions of the New York state laws This
is a method so drastic that it will be fur
tner considered by the committee before
"a bill Is finally submitted. An important
dlinculty seems to be that of Sc
curing the testimony necessary to a judi
clal aseertainment of a violation of any
''NtNilS VI l4lt view Olh state laws
by a so-called trust or foreign corpora
uon. The committee is preparing a bill
"h.ch will empower the attorney general
10 investigate trust on the complaint of
any citizen Of any alleged violation of the
law which bill will empower the attorney
general to examine witnesses under sub
poenaes on the attorney generals ex-
parte application by a justice of the SUI
preme court. The examination Of wit
nesses by the attorney general is to be
conducted In the presence of court JUS
nee and the testimony is TO be filed in
the attorney generals office. This law
WI give immunity from punishment to
witnesses testfying on subpoenaes issued
10y the attorney general. The committee
~ nor yet satisfied that it can frame a
law restricting the operation of factors
asflDments. which will he constitutional