The Montgomery advertiser., 1902-10-15
ADDRESS AT PITTsBURc
He Was Guest of Chamber Of
 Commerce.
Discusses Control of Great Com~ binations of Capital and He- \ l views Efforts of Government ;,
 in That Direction-Touche
 tt on the Beef Trust :.

Pittsburg. Pa, Oct. M--Attorney-den eral Knox addressed the members of the Chamber of Commerce at the Hotsl Schenly tonight. There were TOO guests present. The subject of his address was the Commerce Clause of the Constttu- ton and the Trusts" Mir. Knox was af- terwards entertained by w. H. Keechs chairman of the committee in charge of the meeting.
 Mir. Knox spoke as follows:
 The people. by common consent. have denominated the great industrial and oth- branches of commercial business, trusts. The technical accuracy of the term is unimportant, but indeed 1t is much more apt than might be supposed. when it . aas ths tas os ras and the great corporations owning and controlling subsidiary ones Is that Tn re- spect to the former and shares of inde- harmony we're lodged with a trustee who received the separate earnings and dis tributed them among the holders Of trust certificates, while as to the latters corporation is created to take over the title to the stock or properties of the constituent companies and issue its own shares as the evidence of interest in the combination. The corporation owner Of thority from the Legislature of the State under which 1t Is created.
 The President, In his first message to Congress. said:
 tion in the minds of the American peo- pie that these trusts are, in many of their features and tendencies. hurtful to the general welfare. This springs from no af Vxrtaa fn1.l | lack of pride in the great industrial | achievements that have placed the coun- | try at the head of the nations struggling for commercial supremacy. 1t does mol | rest upon lack of intelligent appreciar ton of the necessity Of fneeting chang 1 ing and changed conditions of trade with | new methods, nor upon ignorance of tho | fact that combination of capital and ef- | fort to accomplish great things Is neces- | sary when the worlds progress is de- | manding that great things be done. It is bottomed upon sincere conviction that
 combination and concentration. while not | to be prohibited, Is to be controlled. and | in my Judgment this conviction is right.v z These great combinations. now number- | ing thousands. are the instrumentalities | of modern commercial activity. Their
 number and size alone appall no healthy | American. We are accustomed to large | things and do them in large way. We | are accustomed to speak with Justihabie pride of our great institutions and what | we have fairly accomplished through | them. No right-thinking man desires to impair the efficiency of the great cor | porations as instrumentalities of national | commercial development. Because they
 are great and prosperous is no suficient reason for their destruction. If that | greatness and prosperity are not the re- | suit of the defiance. of the natural rights | or recorded will of the people. there ia no just cause of complaint.
 Evils and Abuses.
 That there are evils and abuses in trust promotions, purposes, organizations, methods, management, and effects none questions except those who have profited by those evils. That all or any Of these abuses are to be found in every large or ganization called trust no one would assert who valued his reputation for sane judgment
 The conspicuous noxious features of trusts existent and possible are these: OvercapitaliZation, lack of publicity og operation, discrimination in prices to de- sens ssTSy oG%RstltiSn nsucent agement, tendency to monopoly and lack of appreciation in their management of their relations to the people, for whose benefit they are permitted to exist.
 overcapitaliZation' is the chief of thess and the source from which the minor ones flow. It Is the possibility of over capitalization that that furnishes the temptations and opportunities for most of the others Overcapitalixation does not mean large capitalization or capi- talization adequate for the gre9test un- dertakings. It is the imposition upon an undertaking of a liability without a cor responding asset to represent it. There fore overcapitalization Is a fraud upon those who contribute the real capital efforts to realize dividends thereon from operations is a fraudulent imposition of a burden upon the public. When a prop erty worth million dollars upon all the sober tests of value IS capitalized at five millions and sold to the public, 1t is ra- tional to assume that it's purchasers will exert every effort to keep it's earnings up to the basis of their capitalization. When the inevitable depression comes. wages must be reduced, prices enhanced. or dividends foregone. As prices are nat urally not increased but lowered in dall periods, 1t usually resolves itself into 6 question of wages or dividends.
 While this condition may exist under any circumstances, it is exaggerated by overcapitaliZation in the illustrating case five to one. The overcapitalized securi- ties enter into the general budget of the country. are bought and sold rise and fall, and they fuctuate between wider ranges, and are more sensitive in pro- portion as they are further removed from intrinsic values, and, in short, are liable to be storm centers of financial disturb ances of far-reaching consequence. They also. in the same proportion increase the temptation to mismanagement and ma nipula ton by corporate administrators.
 Corporations and joint stock of other associations. depending upon any stata- tory law for their existence or privileges. trading beyond their own States, should he required to do business in every State and locality upon precisely the same terms and conditions. There should be no discrimination in prices; no prefer ences in service. Such corporations serv- ing the public as carriers and in similar capacities should be compelled to keep the avenues of commerce free and opAn 10 all upon the same terms and to ob- serve the law as to It's iniunctions against stihing competition Moreover. corpora tions upon which the people depend for the necessaries of life should be required to conduct their business so as regularly to supply the public needs
 Secrecy is Unfair.
 They should be subject to visltorial sA-