The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-12-31
PUBLICITY AN AID TO TRUSTS,
JCDGE KNAPP TELLS WHY 1T
WOULD NOT CURB THEN.
He Believes II would Destroy (ompeti.
INSTRUMENTATION Has No Relation
70 Prices-Is II the Duty Of the state
70 Safeguard Inv estment Of Capital

70 Safeguard Investment Of Capital
WASHINGTON, Dec. 3O.-Chairman Martin
A. Knapp Of the Interstate Commerce Com
mission delivered a carefully prepared adj
dress to-day before the American Assocta'
ton for the Advancement OF Science, on
Capitalization and Publicity" He said
that decentralization was a much ex-
aggerated evil, that he doubted the efficacy
of publicity as a sovereign cure for this
Alleged trust rnalady, and that the applica
zion Of this doubtful remedy would incre ase.
and not decrease, the power OF trusts and
the vastness Of the capitalization.
In discussing the proposition Of publicity
as a cure-all for the trust evil Mr.. Knapp
said:
The proposal, as understand IL. is to re-
quirc all corporations under the control
of Corkycss to make full disclosure OF their
genesis aid operations. to the end. among
other things, that II may he clearly seen
how the amount OF money originally paid
in. or the value Of the assets at any time
owned compares with the par value Of all
bonds and stocks which such corporations
have issued.
II this will promote the public interest
when applied to interstate commerce. II
will equally promote that interest when
applied TO State comm rec ar d p vate enter
Prise carried on by corporate methods
The proposed treatment, therefore. includes
national and State publicity. comprehensive
enough to reach all forms or corporate or
ari,ation, with the avowed purpose Of
king all the acts and dongs OF these
artificial persons, including their history
and development, "a fully known to the
general public as they are their respective
managers
With all Difference to those who advocate
such publ city as a preventive OF stock water
ing. venture to doubt the soundness OF
their argument Indeed | hold u improved
that the excessive issue Of corporate securi-
ties is a source OF such dan ger as to excite
public alarm. and am yet to be convinced
that enforced publicity will not be harmful
exercise OF public authority.
The capitalization Of a company has no
relation whichever to the prices at which II
sells its product or course. the degree to
which any concern may approximate the
monopoly Of a given article does not deter
mine. within limits, the range OF obtainaole
prices: but its power in that case depends
wholly upon its control OF the market not at
all upon the amount OF stocks and bonds
which constitute its cspital.
when bargaining takes place under con-
ditions OF free ind eotive conn eti' ion, the
seller accepts the sum he must take to effect
a sale: and this Is as true. always and every
where, OF corporations as OF individuals.
II the seller has to n greater or less extent
a monopoly VI the article offered, and so
escap. the restraint OF competition. he names
a price which he deems It for his interest to
charge, and that price may be Influenced
by fear OF provoking competition. by defer
ence to public sentiment. which would de-
noun ce extort ion. or even by considerations OF
a benevolent character: and this Il "a true.
always and everywhere. OF corpor atoms as
~ individuals.- ..
. When We perceive that capitalization Is an
entirely distinct and separate thing from
and cease TO oonftis> things which
Rave no relation to each other We shall zee
thnf the mere, factor Of stocks and bonds.
whether excessive or restricted. has nothing
TO do with the prices at which the output OF
cOrpor al ions 10 solo
Tits being So Il follows that the matter
Of capt. alization in no way con corns the great
body of consumers. and that enforced pub
lefty r. not required In their Interest. since
I Re purcb asrr buys ri the SANE price. whether
the ieeSMi,ies outst anding are greater or
!ena than he valne OF the assets OF the corpora
lon In wi ioh he deals.
We seek In vain. therefore. for a justification
OF publicity on the theory that 1t Ia needed
for the protect ion of consumers or would
,o1.I''utr 70 .o,n 'ah's in's caves
psst TWO c'ssSs VI pe'sons' ieW !" 'hf askre-
Sar, WIZ nav ANY ieai 'n,e'.s' III eo'pora'e
ruonc"y' ahu 'ese arc 'ne hoioe's OF cor
por"' oo"s"" u anu '"o~' "ro may uesHe
70 puy t''m LOT INVESTMENT or s~cuiMion
In The second place. I maintain that the
stocRhoioer as such 10 not oehehteo oy cor
porats publicity. and would be harmed rather
than helped by it's enforcement. The share.
hoiaeS III CORPORATION is Quasi partner
WIN the other sharehoioers, ana mas right
CORRESPONDING 10 the right OF an actual part
hef' 70 Know now the business OF which he
owns part IS managed ms right OF the
inihor'tS stocKhoueI 10 more or less enec-
livery secured IN the charters OF corporations
OF py the statute ia"s uhoer which they are
organized ..
NOT only IL tn's fneasnr" or protection
needed. bat justice requires that 1t. should
he amply ahorded. But TINS Is altogether
nHerent' from general publicity. II is ON
thing for the stockholder to have knowl-
edge Of the concern whose shares he holds;
" rs quite another thing TO furnish the pub
he with tho same information.
In short, IN whatever light the subject Ia
examined, fail TO see that publicity ca n BIZ
dssira bic or useful to the stockholder In nv
Judgment II is distinctly against his interest
and cannot be defended upon the ground
Of his advantage.
. The justification for this proposal there-
fore must be found " found at ALI. in tho
theory that the State is charged with the duty
Of safe guarding the investment OF car,tal
IN corporate securities To my mind III, ia