The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-08-29
THE LAWYERS
ON THE TRUSTS
Modern Industrial Combinations Must be
Stayed, Says the Committee on
Commercial Law

will combine into one organization all
of the land, so that the workman who
works for wages can find but one posi-
BILE employer and the purchaser of wares
but one possible seller. The steps toward
the formation of one industrial corpora
ton which shall crowd out all other cor
porations and assume to itself all the IN
dustries of the land have been already
more than half taken. 1t is not so far
to go from now to that end as we had
to go to reach present industrial condl-
tions.
A monopoly is economically desirable;
that is, for the monopolist. The United
States States Steel Corporation can pro-
duce, no matter what it sells them for,
its goods cheaper than the element out
of which the combination is composed
ever produced them. The Standard OIL
Company is economically holy for 1t
pays 40 per cent dividends The sugar trust
is economically correct for whereas the
industrial sugar refiners lost money on
small capitalizations. the sugar trust pays
big dividends on a large capitalization.
The railroad combinations are economl-
caly impregnable, for they pay
If Mr.. Morgans shipping trust and Mr..
Schwab's shipbuilding trust are failures,
they are exceptions to the rule. We can
not therefore, rely on natural forces,
on the laws of supply and demand or on
economic considerations to limit the growth
OF modern combinations. If they are UNI
desirable, if the people of the American
nation would be better off without them
or with limitations put upon them, they
must put those limitations on by the ac-
ton of their legislatures, their congress
and their courts. The American bar
must act and the American Bar Assocla-
ton must take the lead. If the Northern
Securities Corporation had been allowed
to go on, the next thing to follow it
would naturally have been a United
States Securities Company, which would
hold the majority of the stock OF every
railroad where the American flag flies.
The report proposed the following RENE
dies:
First.-We can tax them to death; or
if that is too radical a remedy we can
tax them until their growth and enlarge
hent is impeded. There are constitutional
provisions requiring direct taxatlons to be
uniform, and in view of these provisions
it is probably impossible to discriminate
in the matter of direct taxation against
corporations holding large amounts Of
taxable
franchise tax imposed by most of the
States upon corporations at the time OF
their incorporation and annually there
after. This franchise tax is in almost al
States in some way graded so as to tax
the small corporation at a higher rate
than the larger one The first million
pays a higher rate than subsequent mil
lions In our Judgment the graduation
should be continued but it should be, a
grading up instead of down. We would
leave, perhaps, the first hundred thousand
free and the first million cheap and raise
the rate with each succeeding Million.
The United States Steel Corporation now
has capitalization of something over
one thousand millions. The graduation
stages might be slow and easy enough to
please the most conservative and yet re-
suit in a taxation of ten per cent upon
the last hundred millions. How long
would the United States Steel Corporation
continue under that system OF taxation?
Second.-We can compel them to render
better and cheaper service. II the com
bination of the Northern Pacific and the
Great Northern railroads is great enough
public disaster to have warranted the at
tention which it has attracted, 1T could
have been prevented much easier than by
a hundred Sherman antitrust laws by a
single United States statute that required
any incorporation engaged IN interstate
commerce to reduce its rates fifty per
cent to and from every point where com
petition has been prevented by comblr-
ton, merger, common control or agree
ment. Congress can enact that any cor
poration or individual who engages IN
Interstate commerce must furnish It's SER
vices or supply its goods at low rates
wherever by any combination, competition
is prevented than where competition Isl
left free.
.sTbird IF necessary, the State itself
can enter the industrial field as a producer
and restore the force of competition to-
it's former supremacy by becoming itself
q competitor of the great trusts.
The report is signed by all the members
of the committee, consisting of Walter S.
Logan. Henry Budd, Gardiner Lathrop,
George Whitelock and John Morris, Jr@
There was applause when Judge Logan
concluded the reading of the report. Judge
Ketcham. of Indiana, requested that Judge
Hammond, of Georgia, be asked to speak.
resolution was offered by MI
r. H. Busbee, of North Caro-
lima, providing that the report be
received and filed, accompanied 5y
a note that it did not express the views
of the association. Judge Hammond.
spoke briefly, endorsing the report, saying
that it was a most encouraging thing that
body like the commercial committee and
seen fit to grapple with such great ques-
ton as industrial combinations
William L. Royal, of Richmond, Va,
offered as substitute for the report
paper, the essential ideas of which were
that the injury done the public by trusts
was through unreal competition; that is.
the giving away of goods to destroy weak
rivals, or by selling goods below cost for
the same purpose. Stop this. he said, aud
the trusts power for evil is ended. His
remedy was that Congress pass law, es-
tablishing corporation commission n
each State or territory, having complete
authority, on complaint of any person that
his rival is trading dishonesty by giving
away his goods, or selling them below
cost, for the purpose of destroying the
complainant, to fine the offending corpora
| ton to such an extent as will make 1t