The Providence news. (Providence [R.I.]) 1891-1906, 1902-10-15
Attorney General Knox Discusses a
Vital Question Before PittSburg
Chamber of Commerce.

Pittsburg. Oct. l5.-Attorney General
Knox addressed the members OF the
Chamber OF Commerce at the Hotel
Schenley here last night. There were
200 guests present. The subject OF his
address was THE Commerce Clause OF
the Constitution and the Trusts"
He said in part:
The people. by common consent have
denominated the great Industrial and
other corporations now controlling many
branches OF commercial business, trusts.
The technical accuracy OF the term is
unimportant, but indeed IL is much more
apt than might be supposed. when IL is
recalled that the essential difference be-
tween the old industrial trusts and the
great corporations owning and control
ling subsidiary ones Is that In respect
TO the former the shares OF independent
corporations agreeing 10 act in harmony
were lodged with trustee who received
the separate earnings and distributed
them among the holders OF trust certih-
Gates, while as TO the latter, corpora
ton 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 I'm the combina-
ton. The corporation owner of corpora
tons invokes specific legal authority from
the legislature of the state under which
II IL created
These great combinations. now num-
bering thousands. are the instrumentali-
ties OF modern commercial activity. Their
number and size alone appall no healthy
American. We are accustomed TO large
things and TO do them I'm n large way.
We are accustomed TO speak with a
justifable pride OF our great institutions
nd uha hay ri sha oil
through them.
No right thinking man desires to i'm
pair the efficiency of the great corpora
tions as nstrumentalities OF national
commercial development Because they
are great and prosperous Is no sufficient
eason for their destruction. II that
greatnes and prosperity are not the result
OF the defiance OF the natural rights or
recorded will OF the people, there Is no
Just cause of complaint
That there are evils and abuses in
trust promotions. purposes, organizations
methods. management and effects none
questions except those who have proflted
by those evils That all or any OF these
abuses are to be found In every large
organization called trust no one would
assert who valued his reputation for
sane judgment
ovERCAPITALIZATI
The conspicuous noxious features OF
trusts existent and possible are these:
pitalzation. lack of publicity OF
operation. discrimination In prices TO de-
stroy competition. insufficient personal
responsibility of officers and directors FOR
corporate management. tendency 90
monopoly and lack OF appreciate IN
their management OF theSs relations 20
the people, for whose benefit they are
permitted To exist.
e. L. ho ,H,t 81
and the source from which the minor :
ones flow IL is the possibility OF over
capita lization that furnishes the temp
tations and opportunities for most OF the |
others Overcapitalization does not mean !
large capitalization or capitalization ade-
quate for the greatest undertakings
IL is the imposition upon an under |
taking OF liability without correspond |
ing asset TO represent II. Therefore over
capitalization is fraud upon those who |
the real capital either origin |
ally or by purchase. and the efforts 20 /
realize dividends thereon from opera
tions is n fraudulent imposition OF
burden upon the public.
When property worth n million dollars |
upon all the sober tests Of value Is capt.
talized ~ 100000 and sold 20 the public.
II is rational 10 assume that its pur-
chasers will exert every effort 20 keep
les earnings up % the basis Of their 1
capitalization. When the Inevitable de-
preston comes. wages must be reduced, |
prices enhanced. or dividends foreEone
AS prices are naturally not Increased
but lowered In dull periods. Il usually
resolves itself into a question of wages
DR. dividends
While this condition may exis, under
any circumstances. ~ A. exaggerated by
i've 10 one. The overcapitalized securi-
les enter into the general budget ~ the |
country are bought and sold rise and |