Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-03-01
Views Of the Industrial Commission
Submit edto Congress-
SOME ADVANTAGES OF COMBINATIONS
Their Evils Described aad Remedies
Suggested,
DISCRIMINATION IN RATES

teu tO congress d preliminary report on
trusts and industrial combinations. Accom-
panying this report is the testimony taken
before the commission. together with a re-
view of the evidence on trusts and indus
trial combinations.
The commission recommends that Con-
gress and state legislatures enact laws to
prevent freight rate Determinations by the
railroads, saying that testimony accom-
panying the report. together with addi-
tional testimony, which will be laid before
Congress shortly, seems to show that like
discriminating favors are even now grant
ed" Legislation is also recommended pro-
vidng that 1.-The larger corporations-the
so-called trusts'-give publicity to their af-
fairs for the protection Of the investing
public and for other purposes.
The report is signed by all the members
Of the commission, except Senators Daniel
and Mallory. Senator Mallory is I'll and
away from the city, but Senator Daniel is
here. The recommendations In full follow:
A Preliminary Report.
To the Senate and House Of Representa-
tiSes, Fifty-sixth Congress:
The act of June IS, 1888, creating the
industrial commission, authorizes 1t to RE
port from time to time to the Congress of
the United StateS.' AS the subject of
trusts" or indus trial combinations. seemed
to be one upon which there was pressing
demand for trustworthy Information, your
commission gave it early attention. AL
though we have examined sixtytwo wit
nesses on trust topics, whose testimony is
herewith submitted. our inquiry has been
limited to eleven OF the more prominent,
but typical combinations. This leaves quite
a large field for further investigation, but
the urgent demand for information leads
us to submit what we have in hand at this
time. AS a result of our investigation of
industrial combinations thus far, your COM
mission are of opinion that certain evils in
connection with them should be checked by
appropriate legislation. Experience proves
that industrial combinations have become
fixtures in our business life. Their power
for evil should be destroyed and their means
for good preserved. AS Il result of further
investigation on our part, or of further de-
velopment on the part of the combinations,
ii may be possible later to propose addi-
unnal measures for relief without running
the risk of increasing the evils. At pres
ent we propose the following, which, If
sevcrally adopted by the states, or so far
as possible by the federal government we
are confident will be of great service and
VIII not endanEer business prosperity.
To prevent the organizers OF corporations
or industrial combinations from deceiving
investors and the public, either through
suppression of material facts or by making
mis:eadins statements, your commission
Information Should he Given.
(a) That the promoters and organizers of
corporations or industrial combinations,
which look to the public to purchase or
deal in their stocks or securities, should be
required to furnish full details regarding
the organization. The properly or services
Tor which stocks or securities sare to be
issued, amount and kind OF, same and all
o'her material information necessary for
sale and intelligent investment:
roent Of o. on any prospectus or announce
"hich 1alis to make full disclosures as
aforesaid, or which is false should be
oceined fraudulent, and the promoters,
with their associates, held legally respon-
sible:
tc) That the nature of the business of the
corporation or industrial combination. all
powers granted to directors and officers
thereof, and all limitations upon them or
upon the rights or powers of the mem
bers, should be required to be expressed in
the certificate of Incorporation, which in
any investor.
The affairs of corporation or industrial
combination should be carried on. without
de'rlment to the public. In the interest of
Its members, and under thar lawful con-
troll To this end the directors or trustees
should be required:
(a) To report to the members thereof its
financial condition in reasonable detail,
VerlHed by competent auditor, at least
once each year;
tbl To inform members regarding the
method and conduct of business by grant
ing them, under proper restrictions access
to records of directors meetings, or other
wise;
(c) To provide for the use of members,
pe1ore the annual meetings, lists of men,
bers, with their addresses and their several
holdings; and
I'D To provide, in whatever other ways
may be named in the certificate of incor-
n inn
prevent the misuse of their property by
directors or trustees.
The larger corporations-.the so-called
trusts-should be, required to publish an
nually properly audited report, showing
in reasonable detail their assets and La
biiities, with profit loss; such report
and audit under oath to be subject to gov
eminent inspection. The purpose of such
publicity is to encourage competition when
Profits become excessive. thus protecting
consumers against too high prices and to
guard the interests of employees by a
knowledge Of the financial condition of the
business in which they are employed.
Discriminative Rates.
From the testimony given before the
commission, and herewith submitted. it has
been proved that, before the passage of
the interstate commerce act, discriminating
freight rates were frequently secured by
large shippers. Other evidence herewith
submitted, to be supplemented by addi-
tionai testimony which viii be laid before
the Congress shortly, seems to show that
like discriminating favcrs@ are even now
granted. Believing that these discrimina-
tions clearly tend toward the control of
business by large combinations, your COM
mission further recommend:
(a That the interstate commerce COM
mission be given authority, not only to pre-
scribe the methods off keeping accounts Of
the railroads and To demand reports in
such detail as 1t may require but also to
inspect and audit said accounts;
CD That the interstate commerce law be
SO amended as to make the decisions Of
the commission operative at q day fixed in
the decisions and until reversed by the
United States courts, on appeal;
(c) That the interstate commerce COM
mission be authorized to prescribe classifi-
cations of freight articles, and to make
rules and regulations for freight transpor-
tation. throughout the United States; and
Cd That penalties for violations of the
interstate commerce act should be appro-
pirate fines against the cnrrier, and not
Imprisonment of officials.
James III. Kyle, chairman: Boies PEN
rose. ]. J. Gardner Gas to trusts, .Wm.
Lorimer. L. F. Livingston. Jno. c. Bell.
Theo. Often. Lee Mantle, A. L. Harris, Ell
lison A. smyth. John M. Farquhar, Eugene
ID. Conger. Thos. w. Phillips. C. j. Harris, ,