The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-01-27
Its Main Purpose, the Indianapolis
Man Says, Is to Require Corpora
tiOns to Publish Statements.
PUBLICITY IS NOT A CURE-ALL
But 1T WILL TEND TO LESSEN THE
EVIL OF OvERCAPITALIZATI
Little Danger Of Trusts DEPRESSING
the People when Light Is Turned
on Their Operations.

WASHINGTON, Jan. ga report pre-
pared by Representative Littlefield to &C
company the antitrust bill reported to the
House by the judiciary committee was pre-
scented to-day by Representative Overstreet.
of Indiana, Mr.. Littlefield being in New
England investigating the coal situation
along the coast. The report treats OF the
trust question at great length. Speaking
of the bill reported. il says:
Its purpose is more effectively to regu-
late and control. on conservative lines. In
dustrial and business combinations. which.
in their operation. prove Injurious to the
public welfare. 1t is believed to be a de-
cided step in the advance of existing legis-
lation. 1t involves the idea of publicity
and additional legislation TO prevent dis
ordinations by rebate or special privileges
upon the part of railroad companies. 1t
aims to prevent the effort to destroy COM
petition in particular localities by discrim-
ination in prices. and prohibit railroad COM
panies from transporting goods in violation
of the provisions of the law, and contains
provisions intended to facilitate the enforce
ment of this act as well as existing legis-
lation on the same lines.
1T is through the medium Of consumers.
the purchasers of its products, that the
overcapitalized combination finds its most
extensive and oppressive contact with the
public. Successful overcapitalization in
wolves the necessity of declaring a dividend
upon the overcapitalization equal TO d.
vision upon actual value, thus giving to
the stock an earning capacity and creating
an artificial market value. II all OF the
decentralization held by the promoters
and organizers was not held for the pur-
pose of increasing the return, there would
be no object in overcapitalizing.
'"The aggregation of large capital great
volume of business on small margin, CIV
ing a fair return TO the capital invested,
with reduction in price to the consumer.
Is what is termed the new phase Of mod
ern industrial development; and the cor
porate form of organization, with its evils
of oyercapitalization, is the medium
ly taken place. Theoretically, on paper,
this reasons WELL looks well. and works
well. The chief ultimate result In which
the public has an abiding interest the re-
duction Of the price to the consumer. Is in
practice seldom attained. This result is
the only fact that can justify this phase of
Industrial development from the public
standpoint. 1t is not believed that any of
these corporations yet organized have ever
been dominated by. or organized for. the
the consumer. The controlling purpose of
such organizations is believed to be what IL
naturally would be-the profit of the parties
thereto. If the public receives any benefit
it Is incidental. Profit to the persons in
control inspires their operation as well as
organization.
the public is vitality interested in the
amount of capital necessary to carry on a
given enterprise. Such fair return is
proper element of the cost of the article,
and the public must pay for IL. and the
other element of cost involved when 1t
buys the article.
ITO what extent we are now paying ex-
orbitant prices to produce abnormal re-
turns no tell reports are
now made to any authority. state or ma
tional. that give any adequate information
on that point. This is one Of the things
that this bill seeks to accomplish. 1t is
through the facility offered for overcap-
italization that the promoters of great COM
binations, formed from independent cor
porations and competing business concerns,
get their enormous fees.
"Overcapitalization furnishes the con-
venient opportunity for concealing the
profitable character of the enterprise. 1t
is said that it was first employed for that
purpose There are instances where cor
porations have increased their capitaliza-
ton 100 per cent. in order that what was
really. say. II per cent. dividend, would
appear to be only per cent. dividend, and
thus avoided the danger of making their
employees uneasy and FESTIVE because they
were not receiving wages in fair proper
ton of the earnings OF the business.
Publicity. by creating an intelligent pub
lie sentiment, will go far toward ameliorat-
ing oppressive conditions. II II is a fact
that competitors are ruthlessly destroyed
and prices are increased in order that enor-
lively insignificant investment and the
searchlight of publicity can be turned
thereon 1t is doubtful IL the persons who are
responsible for such a reprehensble con-
dition could long stand the well-directed
public Indignation that would be thus
aroused.
ALL II is hoped, however, that its applica-
| ton to the operation of natural laws NAV
| in appreciate degree alleviate existing
conditions.