Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-12-13
PERIL OF THE TRUSTS
POINTED OUT BY JUDGE P. S.
GROSSCUP.
AS Remedies He Advocates Publicity
and Governmental Supervision,
as in Case of Banks.

Judge P. S. Grosscup of Chicago, United
States circuit judge for the seventh jul
dicial district, delivered the following ad-
dress before the University of Nebraska at
Lincoln last night:
One-third or more of the industries of
the United States have passed from the
ownership of individuals, or local corpora
tions, into the great bodies of property
known as the trusts. Should the process
go on, until all our industries are thus con-
solidated, as many well-informed men now
think probable, the so-called trusts Will
have absorbed nearly ,one-siXth of all the
wealth of all kinds in the United States.
Nothing in history, outside the rise of
the federal system, has left so striking
change in what may be called the per-
sonnet of ownership. AS a mere right to
hold and control ownership remains, of
course, unchanged, but if the process of the
last few years goes on unchanged, the
universally of ownership that character
lied our past-an ownership of our indus
tries widely spread among the people-will
be all but lost.
We are now well into the thirteenth
year since the passage of the Sherman
act. An inspection made for me of list
of 112 of the leading so-called trusts in
the United States shows that all but thir-
teen have been created since the passage
Of the Sherman act.
The remedy in general terms it is not
difficult to state. The first thing to do is
to abandon the present policy of outlawry
and determination. That policy has failed.
1t has failed through conditions that can
not be removed by law. Replace the old
policy by a new, under which industrial
corporations subjected to restraints
against artificial prices, will be made in
or ganizaton and management to invite,
and worthily invite, the confidence and CO.
partnership of all the people of the coun-
try.
To suggest concrete legislation is perhaps
more difficult. 1t should include the repeal
of the Sherman act. Logically and i'm
partially enforced, that act forbids two
grocers on opposite corners of the street
penses; partially enforced, it puts the in
dustries of the land at the mercy, not of
the law, but of the officers of the law
The legislation that replaces it should
provide against artificial prices, brought
about either by cornering of the supply,
or by conspiracy; and also against discrim-
ination in prices as to either buyers or
places, as affected by actual transportation
rates. There should be provision for open
books: for stated examinations by some de-
partment of the government; and for Pc
riodical statements to the public as in the
case of national banks. and many of the
railway companies.
The new legislation should forbid the is
sue of primary stock In excess of the cash
paid in. or the real value Of property con-
tributed, to make up the company's assets
Some department of the government should
be charged-as between the company and
the public-with the duty to see that this
limitation was enforced.
Provision should. Of course, be made for
further issues of stock. as the value of the
property increases; but such issue as it
based, not on subsequently acquired prop
erty, but upon increaed value due to man
agement and operation, should be secon-
dairy, always, to the first; and should be
put out only after judgment, by the APP
propriate department, that it was justified
by the earnings and standing of the COM
pany.
To the extent that such subsequent issues
represent increas ed value. due to manage
ment and operation, would encourage, by
every feasible method, its division in
fair proportions between those who have
furnished the capital and those who have
done the work. I would embody the basis
of such division in the contract of incor-
poration, so that it would operate as con-
tract right. and not as mere bonus. Ex-
perience has shown that there is no way
to so satisfactorily mitigate the struggle
between capital and labor. and none so just,
as fair division of the harvest, after
both the reapers-capital and labor-have
each had their reasonable hire.