The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-01-27
LTTLEFIELD
LET'S LOOSE
Oyercapitalization the Key
note of His Report ON
Anti Trust Bill.

WASHINGTON, D. c., Jan. 90
a report prepared by Representative
Lfttlefeld to accompany the anti trust
bill was presented today by Repre-
sentative Overstreet Qnd.), Mr.. Lit
tlefeld being in New England investi-
eating the coal situation. The report
treats Of the trust question at great
length. Speaking of the bill reported,
it says:
.9ts purpose is more effectively to
regulate and control, on conservative
hness industrial and business comb
nations, which, In their opinion, prove
injurious to the public welfare 1t Is
believed to be decided step in the
advance of existing legislation. It
involves the idea of publicity and adj
saitional legislation to prevent dis
examinations by rebate or special PRIV
ilegese upon the part of railroad COM
panfes. It seeks to prevent the effort
to destroy competition in particular To-
calities by discrimination in prices,
and prohibits railroad companies from
| transporting goods in violation of the
provisions of the law. and contains
provisions intended to facilitate the
enforcement of this act, as we'll as eX-
listing legislation on the same lines.
1T is through the medium Of con-
5umers, the purchase of its products,
that the oyercapitalized combination
finds it's most extensive and oppressive
contact with the public. Successful
overcapitalization involves the neces-
sity of declaring dividend upon the
overcap italizatiOn equal to dividend
upon actual value, thus giving to the
stock an earning capacity and Great
ing an artificial market value. IL all
of the apitaliZatiOn were held by
the promoters and organizers, and was
not held for the purpose OF increasing
the return, there would be no object in
overeap italization.
New Phase of Development.
i'The aggregation of large capital,
great volume of business on a small
margin, giving a fair return to the
capital invested, with reduction in
price to the consumer, is what is term
ed the new phase of modern industrial
development; and the corporate form
of organization with evils of overcapi-
talization, Is the medium through
which the development has largely
taken place. Theoretically on paper,
this reason 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 justi-
fly this phase of industrial develop
ment from the public standpoint. 1t
is not believed that any of these cor
poPatiens yet organized have ever been
dominated by or organized for the al
trufstic purpose of reducing the price
to consumer. The controlling purpose
of such organizations Is the profit of
the, parties thereto. If the public re-
ceives any benefit, 1t is incidental.
Profits to the persons in control In
sTirt their operation as we'll as organi-
zatfon
As capital is entitled to fair re-
turn, the public Is vitality interested In
the amount of capital necessary to
carry on a given enterprise. Such fair
return is a proper element of the cost
of the article. and the public must pay
for it, and the other element of cost
involved, when it buys the article.
Who Can Tell.
ITO what extent we are now paying
exorbitant prices to produce abnormal
returns no one can tell, as no reports
are made to any authority that give
any adequate information on that
point That is one of the things that
this bill seeks to accomplish. 1t is
through the facility offered for over
capitalization that, the promoters of
great combinations formed from indie
pendent corporations and competing
business concerns get their enormous
fees.
s0vercapitalization furnishes the
convenient opportunity for conceaIing
the profitable character of the enter
prise. 1t is said that 1t was first en-
ployed for that purpose. There are In
stances where corporations have in
creased their capitalization 100 per
cent in order that what was really,
say II per cent, dividend would appear
to be only s per cent dividend, and
thus avoided the danger of making
their employees uneasy and FESTIVE be-
cause they were not receiving I'm wages
fair proportion of the earnings Of the
business ~
TT is not claimed that publicity is a
cure-all. It is hoped, however. that by
its application the principle of natural
, laws may, In appreeiabie degree, allie
yiate existing conditions