Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-10-15
KNOX ON THE TRUSTS
Attorney General Addresses
Meeting in Pittsburg.
POWER IN CON GRESS
TO AMEND AND EXTEND SHEER
MAN ACT.
overcapitalization,H He Declares, is the
Chief Evil of ALI the
Combines.


address before the chamber of commerce
in Pitsburg last night.
Mr.. Knox's specific theme was ''The Com
merce Clause of the Constitution and the
Trusts
After defining trusts according to the pop
ular conception, Mr.. Knox said:
These great combinations are the instru-
mentalities of modern commercial activity.
Their number and size alone appall no
healthy American. We are accustomed to
large things and to do them in large way.
We are accustomed to speak with justi-
fable pride of our great institutions and
what we have fairly accomplished through
them.
mo right-thinking man desires to impair
the efficiency of the great corporations as
Observation-Disclosures of national commercial de-
velopment. Because they are great and
prosperous is no sufficient reason for their
destruction. If that greatness and pros
perity are not the result Of the defiance Of
the natural rights or recorded will of the
people, there Is no just cause Of complaint.
The conspicuous noxiouS features Of
trusts are: Overcapitalization, lack Of pub
licity Of operation. discrimination in prices
to destroy competition, insufficient personal
responsibility OF officers, for corporate man
agement, tendency to monopoly, and lack
of appreciation in their management Of
benefit they are permitted to exist.
DISQUALIFICATION the Chief Evil.
Observation-Disclosures is the chief Of these,
and the source from which the minor ones
flow. 1t is the possibility of overcapitaliza-
ton that furnishes the temptations and op-
portunities for most of the others. Over
capitalization Is the imposition upon an
undertaking of liability without a cor
responding asset Tharefora
overcapitalization Is a fraud upon those
who contribute the real capital either orig
naly or by purchase, and the efforts to
realize dividends thereon from operations is
a fraudulent imposition of a burden upon
the public.
Corporations and joint stock or other
associations. depending upon any statutory
law for their existence or privileges trad
ing beyond their own states, should be re-
quired to do business in every state and
locality upon precisely the same terms and
conditions. There should be no discrimina-
ton in prices; no preferences In service
Moreover, corporations upon which the
people depend for the necessaries Of life
should be required to conduct their business
so as regularly and reasonably to supply
the public needs
'They should be subject to visitoraI SUI
pervision, and full and accurate informa-
ton as to their operations should be made
regularly at reasonable intervals. Secrecy
in the conduct and results of operation Is
unfair to the non-mana ging stockholders
and should, as we'll for reasons Of state be
prohibited by law.
1.-THE government brought suit against
the sugar trust, which had lust acnured
the stock OF all but one Of the independent
sugar ref1neries of the United States
The governments contention was that
the purpose Of the purchase was to acquire
a substantial monopoly of sugar refining
ana as the product was for sale and distri-
button among the states and to foreign
countries, the arrangement was a violation
of the law cited
"The Supreme Court decided that az the
monopoly was in the production or manu-
facture of sugar and its sale or distribution
among the states and to foreign countries
was but incidental thereto. 1t was not with
IN tne prohloltion OF the law. saying that
manufacturing, although it precedes COM
merce, Is not part Of it. and that the act
only applied to restraints of commerce
ms distinction Is easily unde rstood
when it is recollected that commerce means
intercourse, transmission, communication
transportation and commerce among the
states the regulation Of which rests in the
ieuerai power. means as the term fmDJies
ehae TINS intercourse shall be between or
among the states. Manufacturing, on the
otner nand. does not imply or necessitate
intercourse among the states, but implie. =
sitns or place for its operations
IN SUBSEQUENT case the government de-
stroyed the Addystone pipe combination
upon the ground that 1t was consniracv
among the Independent producers OF nine to
restrain Its sale and distribution among tho
states; The combination in this case oper-
dteo directly upon the interstate commerce
Sherman Laws Limitations.
Ihese cases seem to define the scope Of
the antitrust law. and show how little
there Is now left for the statute to operate
upon 1t Is not enough, 1t seems that a
trust or corporation. owning corporations.
exists, or that 1t Is engaged in interstate or
foreign commence. for it's mere engaging
IN commerce Is not prohibited or that Il
monopolizes production throuehout tho
country. or that 1t Is formed to restrain or
monopoliZe business within state or do
se.1ys competition In buying or selling
within state. or that by any of these
things 1t indirectly affects interstate CON-
merce with practical restraint or monono-
~ to bring the corporation or it's particular
trahsaction within the emphatic clauses or
under the drastic penalties of the ANTITRUST
law - u"'
III Congress under it's power to regulate
interstate commerce may utterly destroy a
combination and forfeit its property In in
terState transit. as the Sherman act mo
vtdes. because 1t restraints such Commences
1t seems reasonable to say that it can in
the exercise Of the same power deny to a
combination whose life it cannot reach the
privilege of engaging in Interstate com
merce except upon such terms as Congress-
may prescribe to protect that Commerce
from restraint. Such regulation wouId
operate directly upon commerce and only
indirectly upon the instrumentalities and
operations Of production.
III the Sherman act exhausts the power
OF Congress over monopolies. the American
people find themselves hopelessly impotent.
facing a situation fraught with the most
alarming possibilities, with which neither
the federal nor state government can deal.
Can 1t be possible that the people of the
United States, feeling the pressure of un-
doubted evils. are nevertheless totally pow
erleSS! 1t Is true that although Gro
with growing certainty the nature of the
wrong and are seeking remedy. the Com
stitution as 1t stands does not permit them
to pursue 1t; that amendment to that char
ter is first necessary; that the power of
Congress does not now extend over detri-
ments injuring the entire body Of citizens in
their most vital concerns. because these
detriments originate In the states-although
the states in the aggregate. and by the CO.
operation which Is essential. do nothing eff
fectlve to remove them?
Il do not believe that we find ourselves
so helpless.
Supreme Court Decisions.
1.-THE Supreme Court has characterized