The Cairo bulletin., 1905-12-06
REGU LAll0N OF TRUSTS

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So long as the finances Of the nation
are Kept upon an honest basis no other
question of internal economy with which
the congress has the power TO deal
begins to approach in Importance the
matter Of endeay0rng TO scare proper
industrial conditions under which the
individuals, and especially The great
corporations, doing an interstate bust
ness are to act The makers of our
national constitution provided especial
~ that the regulation of interstate COM
MERGE should come within the sphere Of
The general government The argu-
ments in favor of their taking this
stand were even then overwhelming,
but they are far stronger today. in view
of the enormous development of great
business agencies, usually corporate in
form. Experience has shown concu-
siyely that ii is useless to try to get
any adequate regulation and super
vision Of these great corporations by
state action Such regulation ana su-
peyisi0n can only be effectively exer-
cised by sovereign whose jurisdiction
is coeXtensYe with the field Of work of
the corporations that is, by the nation
al government ! believe that this reg
ulation aud supervision can lie obtain
ell by the enactment Of law BY the con.
SgeSs. II this proves impossible ii will
certainly be necessary ultimately ID
confer in fullest form such power upon
The national government by a proper
amendment Of the constitution 1t
would obviously he unwiSc TO endeayor
to secure such an amendment until it
is certain that the result cannot be OBJ
tanned under the constitution as it now
is. The laws of the congress ana of
the several states hitherto, as passed
upon by the courts. have resulted more
often in showing that the states have
no power in the matter than that the
national government has power; so
that there at present exists a very IN
fortunate condition Of things. under
which those great corporations doing
nm interstate business occupy the po-
sitiOn Of subjects without a sovereign,
neither any state government nor the
national government having effective
control over them. Our steady aim
should be by legislation, cautiously and
carefully undertaken. but resolutely
perSeyered in. to assert the sovereignty
Of the national government by afirma-
tive action.
An innovation Only In Form.
g. in, /. f.,f
In substance it is merely restoration
for from The earliest time such resula-
ton Of industrial activities has been
recognized in the action of the law
making bodies, and all that propose
Is to meet the changed conditions in
such manner as will prevent the com
monwealth abdiclting the power it has |
always possessed. not only in this coun- !
try, but also in England before and |
since this country became a separate |
nation
1t has been misfortune that the ma
tional laws on this subject have hithcr-
to been Of negative or pr0hibitiyc |
rather than an affirmative kind. ana |
still more that they have in part sought /
10 prohibit what could not be effective /
Is prohibited and have In part Ia their |
prohibitions COMPOUNDED what should |
be allowed and what should not be al
lowed. II is generally useless 20 try |
10 prohibit all restraint on competition,
whether this restraint be reasonable or
unreasonable. and where ID is not use
less 1t Is generally hurtftl Events
have shown that il is not possible AIDE
quatcly TO secure the enforcement Of
any law Of this kind 10y iuccssant APP
real 90 the courts. Tho department OF
Justice has for the Hast four years dc
voted moro attention 10 the enforce.
mcrt Of the antitrust legislation than
10 anything else Much has been ace
complishcd; particularly marked has
iccn the moral effect OF the pro socu-
tI0ls. but IL * Increasingly evident That
there viii be a very insufficient houc-
fetal result In the way Of economic
change The successful prosecution Of
one device TO cgade the law immediate
ly develops another device 10 accom-
plish the same purpose. What {, need
Cd rs not sweeping prohibition of every
good or bad, which may
tend 10 restrict competition. but such
adequate supervision and regulation
as viii prevent any restriction Of com
petition from being % the dctrimcnt OF
the public. rs well as such supervision
and regulation as win prevent other
abuses in no way connected with re
Of competition. or these
abuses perhaps the chief although by
no means ihe only orc. is ovcrcapital-
ization, generally itself the result II
dishonest promotion. because Of the
myriad evils 81 brings I'm its train. for
such OvercapitaliZation often means an
imitation that invites business panic
II always conccals the true relation Of
'he profit earned TO the capital actually
invested. and 10 creates a burden of in
.crest payments which is a fertile cause /
pr improper reduction in or limitation
m wages. II damages the small in
.ze-i9r. discourage thriff rrd enr1ur-
gas csmhlinE and speculation. while
perhaps worst ~ az is nlo Thickness
anil dishonesty which ID implies. FER
harm 10 morals IS worse than any pos
siblc harm 70 material interests. and
De dcbluchcTT 81 polfics and h,lsfnoss
sF great dishonest corporations IS FAR