Los Angeles herald., 1905-12-06
NATIONAL LAWS
ON CORPORATIONS
NOT ADEQUATE

1t has been misfortune that the
national laws on this subject have
hltherto been of a negative or prohibi-
1--WE rather than an affirmative kind
and still more that they have in part
sought to prohibit what could not be
effectively prohibited, and have in part
in their prohibitions COMPOUNDED what
should be allowed and what should not
be allowed. 1t is generally useless to
try TO prohibit all restraint on compe-
tlton, whether this restraint be rea-
sonabe or unreasonable, and where it
is not useless it is generally hurtful.
Events have shown that II is not pos
sible to adequately secure the enforce
ment of any law of this kind by inces-
SAINT appeal to the courts. The de-
partment of justice has for the last
four years devoted more attention to
the enforcement of the antitrust leg
islation than to anything else. Much
has been accomplished; particularly
marked has been the moral effect of
the prosecutions, but it is increasingly
evident that there will be a very in
sufficient beneficial result in the way
Of economic change. The successful
prosecution of one device to evade the
law Immediately develops another de-
vice to accomplish the same purpose.
What is needed is not sweeping prohi-
bitiOn of every arrangement good or
bad. which may tend to restrict COM
petition, but such adequate supervision
and regulation as will prevent any re-
striction of competition from being to
the detriment of the public-as well as
such supervision and regulation as will
prevent other abuses in no way con-
nected with restriction of competition.
Evil of Overcapitalization
OF these abuses, perhaps the chief, al
though by no means the only one, Is
over aliZation-generally itself the
result of dishonest promotion-becaus
of the myriad evils it brings in It's
train, for such over er-capitalization often
means an initiation that invites busi-
ness panic; it always conceals the true
relation of the profit earned to the
capital actually invested, and 1t creates
burden of interest payments which
is a fertile cause of improper reduc-
ton in or limitation of wages it dam
ages the small investor, discourages
thrift and encourages gambling and
speculation, while perhaps worst of all
is the thickness and dishonesty which
it implies-for harm to morals Is worse
than any possible harm to material in
terests, and the debauchery of politics
and business by great dishonest COR
porations is far worse than any actual
material evil they do the public Until
the national government obtains, in
some manner which the wisdom of the
congress may suggest, proper control
over the big corporations engaged in
Interstate commerce-that is, over the
great majority of big corporations--it
will be impossible to deal adequately
with these evils,
Temperate Action Necessary
I am we'll aware of the difficulties of
the legislation that / am suggesting
and of the need of temperate and eau
tious action in securing 1t. l should
emphatically protest against improp-
erly radical or hasty action. The first
thing to do is to deal with the great
corporations engaged in the business
of interstate transportation. AS | said
in my message Of December last, the
immediate and most pressing need, so
far as legislation Is concerned, Is the
enactment into law of some scheme
to secure to the agents OF the govern
ment such supervision and regulation
of the rates charged by the railroads
of the country engaged In interstate
traffic as shall summarily and effec-
lively prevent the imposition of unjust
or unreasonable rates. 1t must include
putting a complete stop TO rebates In
every shape and form. This power tol
regulate rates, like all similar powers
over the business world, should be ex-
ercised with moderate caution and
self restraint, but it should exist, sol
that IL can be effectively exercised
when the need arises.
Power Should Be Administrative
The first consideration to be kept in
mind Is that the power should be az