The San Francisco call., 1901-12-02
FEDERAL RELATIONS TO TRUSTS

IN OBL1O attenllOn mas Deen given 10 the ISpOll
r. that President Roosevelt intends making some
recommendation concerning trusts in his mes
sage Congress, while at the time there seems
to have been presentation of the question in the
Northwest where the Governor of State threatens
attack the recent railway combination.
While much has been said, little is really Under
stood about this question OF trusts, which, in the
many details of interest to the public, is not as
complicated as might be supposed
The jurisdiction of the Federal Government extends
only to matters relating to interstate affairs Where
the question lies wholly within the territory of the
State Federal question is involved
Congress, by the Sherman antitrust law, passed in
1890, imposed stringent restrictions and penalties
upon all contracts in restraint of trade and upon COM
binations and monopolies but of the applica
ton of this act limited to the Federal questions
that is interstate questions 1t will be remembered
that time since, in this city, the Coal Trust
prosecuted in the Circuit Court presided by
Judge Morrow, and judgments and penalties were re-
covered in the litigation, and it will also be
bered that not very long ago the United States Su-
preme Court affirmed the judgment of the lower
courts which held that the great Traffic Association Of
the Eastern railways was void.
There are number of corporations recognized and
existing by virtue of Federal franchises it being held
that the power to create such Federal corporations
necessary in order that the Government might
carry out its constitutional powers but no one has
ever for moment contended that the Federal Gov
ernment could clothe Federal corporation with
authority which would authorize invade the terri
tory of any State and there corporate func-
ons without the direct permission of the State ITSELF
except where the business was between the States
A Federal railway corporation seeking to enter the
boundaries Of California is subject to all the regula
tons appertaining to all railways in the State of Cali
ornia. 1t can acquire its land only in the manner
pointed out for all railways and in fact possesses
immunity from State control except where, by virtue
of its extension through other States it acquires that
interstate character which makes its interstate rates
and freights matter of Federal control.
Foreign corporations, that is to say, corporations
organized under the laws of other States of for
eign countries, have power right to enter the
territory of any State and perform do any business
within that State except by permission of the State
itself They exist in all other places than the place of
organization only as matter of comfy and not of
right
The constitution of this State provides only that
foreign corporations shall not be allowed to do busi-
in the State of California any more favorable
terms than are allowed to domestic corporations.
Is From all of this it would seem that the question of
trusts, except in so far as Federal corporation is
engaged in Federal enterprise, that is to say, be-
tween States is entirely subject to and be con-
trolled by the Legislature of the State They may be
debarred from entering and doing business within
the State and why is this not practical solution
the trust problem?
In Texas, which has gone far if not farther, than
any other State concerning the antitrust propo-
ston, statute passed which provided that any
corporation holding charter under the laws of the
State of Texas which should violate any of the prov
sons should forfeit its charter and exist and
that every foreign corporation violating the pro-
visions should be deniedt the right and prohibited
from doing business within the State This law was
upheld by the Supreme Court of the United States
and illustrates that proper legislation by the State
California will present to the people the solution o
much annoyance resulting from corporate combina-
! tions.
An antitrust law placing proper restrictions upon
foreign corporations, honestly enforced would obv
most of the Objectionable features of the trust
question: far as the sale of the product of such
combinations in this State is concerned.