The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-05-16
THE REGULATION OF TRUSTS.

[ ARDLY any good can be expected from such a
drastic law against trusts as that adopted in
Texas In fact such legislation is more likely
to do harm than good for if enforced is pre-
vent those large combinations OF capital which are
necessary to build up great industries in this age OF
excessive competition.
Because such laws are harmful however, it does not
follow there should not be some restrictions upon the
organizations OF trusts Evils OF portentous magni
tude have developed in the formation OF such enter
prises and these it is the duty OF governments to
eradicate as far as possible Legislation that end
can be devised which would materially guard the
interests. OF the public without interfering with any
legitimate undertaking for the promotion of in
dustries.
Among the evils properly subject TO legislation are
the over capitalization of stock companies OF all kinds
and arrangements with railway companies by which
the big trusts are given advantages in shipping over
their smaller competitors. From these two sources
flow many Of the worst ofenses of trusts and if they
could be closed there is reason to believe the eco
nomic law which has brought about the development
OF large combinations of capital could be LETT to its
natural operation without danger to the general well
fare
The extent to which capitalization has been
carried is shown by the fact that since the beginning
OF the present year there have been organized in New
Jersey alone stock companies with an aggregate CAPT
taization OF than ST 5oooooooo The figures are
taken from recent review OF the subject in the New
York Tribune. This sum exceeds all the gold, silver
greenbacks and banknoes in circulation in the United
States The capital therefore could not have been
paid mp. Some OF it, indeed, represents not money
but fixed capital, such as land. buildings, machinery
and other parts OF great manufacturing plants but al
lowing liberal reduction from the total for that kind
OF capital there remains an enormous sum, which rep
W. l.
OF it the companies will endeavor to pay dividends
and in the endeavor will not be scrupuous as to the
means OF obtaining revenues
II now by any supervision the Government could
prevent corporations from expanding their business
with so much fictitious capital long step would be
taken in protecting legitimate business from cut
throat competition II could be made to repre-
nothing but paid up capital their number would
be less and their temptation to unfair business meth
DDS would be diminished
This, while of al corporations is particularly
so OF those managing what known as public ut-
tiles. in most cases gas companies and water compa-
MES have capitalization fully double the investment
one portion being in the hands OF stockholders and
the other in those OF bondhoiders and they extort
from communities revenues sufficient to pay dividends
to the set and interest TO the other Thus there
is taken from the public by such companies just about
twice as much as they should be legally permitted TO
take
The Government is already seeking to prevent rail
way corporations from making unfair determinations
and with increasing understanding of the complex
ty OF the problems involved II is likely will succeed
The chief issue OF the time, therefore, in dealing with
trusts is to check over capitalization II a law could
be enacted requiring the enterprsing men who have
foated 81. 500 100000 OF stock in New Jersey to
collect the coin quit business there would be a
wholesale quitting.