The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1902-12-31

Chairman Knapp Thinks Publicity
Is no Remedy for Trusts.

washington, Dec. 31-Martin A.
Knapp, chairman of the interstate COM
xnerce commission. in his paper entitled
Capitalization and Publicity" discussed
before the Association for the Advance
ment of Science. the proposition that all
CORPORATIONS under congressional con-
troll be required to make full disclosures
OF their genesis and operations, so thai
II may be seen how the amount OF
money originally paid in. or the value of
assets at any time owned. impaired
with the par value of all bonds and
stocks issued. Mr.. Knapp said he VEN
tured to doubt the soundness of the ar
gument that publicity would prevent
stock watering. He held II improved
that the excessive issue of corporate
securities was a source Of such danger
as to excite public alarm, and said he
was yet to be convinced that enforced
publicity would not be a harmful exer-
else Of public authority. He said in
part.
I maintain that the stockholder. as
such. IS not benefited by corporate pub
llcity and would be harmed rather than
helped 10y its enforcement It is one
thing for the stakeholder to have knowl>
edge OF the concern whose shares he
holds. IL is quite another thing to fur
nish the public the same information
fail to see that publicity can be desir-
able or useful to the stakeholder
The justification Of this proposal, there
tcre, must be found. if found NJ Ill. in The
theory that the state is charged with the
duty OF Safeguarding the investment Of
capital In corporate securities. To my mind
this is most serious proposition and
think We should long hesitate before en-
barking upon such maternal venture
Leaving out the spectacular. and taking
into account only those seeking honest
Investment. ten times more money to say
the least mas been sunk in farm mort
cages. suburban lots. patent rights buy
ing and selling grain. cotton and other
commodities. where no corporate shares
were dealt in. or even existed. than was
ever lost on account of the fictitious is
sue Of corporate securities I Cannot but
regard corporate publicity of the kind ana
10 the extent advocated by many. as a
certain and serious hindrance 20 effective
competition Just as the Sherman anti
trust law, which is based upon an eco
very results IL was designed to prevent
SO the compulsory disclosure Of ali cor
pOrate transactions would undermine the
competition it was intended to support
Bearing in mind how rapidly all kinds Of
business are assuming corporate form
that the competition of individuals is fast
disappearing. and that competition in the
future will be mainly between CORPORA
forcement Of corporate publicity would
be an added incentive to Industrial cora
bination.
Therefore. as I view the matter the
remedy in question will be worthless to
the great mass of people, the customers
Tor their troubles are not caused by wa
tered stock and will not be allaviated by
publicity 1t VIII not benefit the actual
stakeholder, for however much he may
need information for himself. his interests
would not be promoted by printing that
information for publicity. Against its
doubtful and very limited usefulness to the
intending purchaser of corporate shares
is the danger. not to be lightly estimated,
OF giving sanction to a principle of *
treme paternalism and furnishing a fresh
impulse, not to compete but 10 CONSOLE
date