Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-12-12
COMBINED CAPITAL
MIR. Dos Passos Before the Industrial
Commission.
The LEGALITY OF TRUSTS
Monopolies viii Work Out Their
Own Destruction.
| \ EFF GENT LA w {

Mr.. John r. Dos Passos of New York
author of works on corporation law. was
before the industrial commission today. and
testified concerning the legal aspect Of
trusts and industrial combinations.
Vice Chairman Phillips called the COM
mission to order and asked Mr.. A. L. Har-
ris to preside.
Mr.. Dos Passos began with an oral state
ment. He said he appeared before the COM
mission as the representative of no one,
and his views to be expressed were merely
his own. He congratulated the country
that this question had fallen into the prop
er form of discussion. IL discussed in the
political form the discussion was apt to
be less fruitful.
What Congress Should Have Done.
Instead of passing the interstate COM
merce law" said Mr.. Dos Passos, Con
gress should have had a commission of in
quiry appointed to inquire into the needs
and interests of transportation and rail-
road interests before 1t enacted law which
is the most remarkable legislation ever en-
acted by a legislative body.
He said the corporate interests had only
been saved from this law by the conserva-
tive way in which it had been enacted.
IF the laws of this country he said.
enacted since 1913 were piled together and
a match applied to them the American
people would be benefited by getting rid of
this mountain load OF statutes and useless
books, not excluding two that / have writ
ten, and then We could bring ourselves back
to the condition where We could look upon
the question of making the laws in the
serious aspect in which they should be con-
s5rued when legislation is approached,
Every law you make, he said is a
nail in the coffin of human liberty
He said only an overW helming necessity
ilrs+ which takes the nat
ural liberty of mankind.
Real Nature of IA Trust.
Mr. Dos Passos described what he re-
garied as the real nature Of a trust. and
gave a historical review of the forms of
industrial combinations that had grown up
under that name, saying that originally the
trust was formed merely for the purpose
of keeping people who had no interest in Its
business from knowing anything about It.
The witness wanted to know if the COM
mission denied a corporation the right TO
have $1O0oO0.ro of capital, while an in
diyidual might hold that much in his own
lame especially when the corporation rep
resents the interest of 10000 stockholders.
He said chat a monopoly was an exclusive
privilege of traffic, such as were gwen 10
individuals by Queen Elizabeth. But that
word could not be applied to corporations
in this country. The patent law permits
monopolies that might be so great that be-
beth seem insignificant. The monopoly
spoken Of generally today was a monopoly
in fact" one that was the result of a con-
ditiOn merely. and one that he had not
found referred to by any author.
Aggregated capital" he said. SIS the
necessary and natural handmade of advanc-
ing civilization. We could never nave
reached the colossal condition in which we
find ourselves today unless 1t had grown
out of the conditions and Observation-Disclosures
IN the form of aggregated wealth.
Evolution of Partnerships.
He spoke of partnerships as an early at
tempt TO aggregate capital. There are OBJ
jections to this form Of combination. 1t
made one partner liable for the entire debts
of the partnership, and when a member of
the firm withdrew or died. it stopped the
business. no matter how prosperous 1t
might be. Then the lawyers arranged what
was designated as a limited partnership,
but it furnished a very meager cOntribu-
ton to the advancing wants of commerce,
and out of these necessities came the COM
mercial corporation. That commercial cor
poration which exists today was not known
until 1880. New York passed a manufac-
turing act in 1S4S. In 1893 there was a
publication by Kidd on corporations. but
it related solely to municipal corporations.
The Derpetuity of business could not be
accomplished by a partnership or copart-
nership. 1t gave those who had an inter
est in these incorporated concerns stock
which represented their holding and which
they could dispose of in an easy manner.
1t gave people of small capital an oppor-
tunity to invest in such enterprises and by
means Of bonds again take a part of the
great mortgages of the country.
Speaking Of the great railroads in this
country, he said with the exception of the
Pacific roads assisted by the government.
English capital, through German connec-
lions. had built them. He referred to the
uncertainties which the builders of those
roads met and to the fact that they had
| to offer inducements in order to get people
TO put money in them, because of the risk.
They had given common stock with the
stock they paid for, and bonds were sold at
40. 80 or 81 per cent or wha tever they could
get The capitalization complained of
came about IN this way, but IT should be
remembered that the men who went into
these enterprises were in a new field of en-
terprise.
Efforts to Corner Have Failed,
The natural laws of commerce." he
said, referring to Industrial combinations,
public from monopolies. Every effort to
corner an article of commerce has failed.
Men can choke the arteries of commerce
for a time, but the natural current will
soon take its course. Leave the laws Of
nature alone and they will take care OF
themselves
1t looked az one time II the sugar trust
owned everything, but competition sprang
up for 1t, and It is getting a hard fight to-
day.
Mr.. Don Passos commended such a work
as the commission is carrying on.
This he said. ''is the instrurentality
that stands between extravagant opinion
and good judgment. 1t is such a tribunal
through which all laws should pass"
The Sherman antitrust law. he said was
an example of a law that failed because i'll
considered. II could not be executed by
the courts, and makes laws a disgrace be-
cause they are not based on sensible ideas
Whenever law opposes natural forces the
law goes down
Testimony This Afternoon.
Mr.. Dos Passos continued his testimony
after go O'Clock. He said he recognized
that great aggregations of capital were at
tended by dangers. but he warned the COM
mission that they should be sure that any
recommendations they make for Legislation
should be aimed at definite abuses, and that
they should be careful not 10 take action
that would injure innocent people.
Mr.. Dos Passos was still testifyins when
The Stars report was closed.
MEMORIAL EXERCISES
Program of Red Men for Anniversarv