Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-02-03
TO PREVENT NOT TO PUNISH
AIM OF FEDERAL SUPERVISION
OF CORPORATIONS.
How Public Opinion May Be Di-
rected to the Correction Of
Commercial Evils.

PUBIC opinion has been prompt and
efficient in the correction of commercial
evils when these evils are stated speci-
f1cally. This Is one of the conclusions
| reached by Herbert Knox Smith. COM
| missioner Of corporations. and expressed
In the annual report of the operations of
| the bureau Of corporations made public
today. Naturally. under present condi-
| lions. the real power of public opinion
reaches only such cases as may be ''spe-
officially stated"
Thus says Commissioner Smith, 1.-THE
experience of the bureau seems to point
logically to the need for an extension Of
such results by the creation of a general
administrative system of supervision of
interstate corporations. which shall give,
In substantially the same form as is fur
| nished now for a few corporations, the
essential facts relating to all the great
interstate corporations Whether the sys-
tenn takes the form of federal license
plan or a simple requirement that inter-
state corporations shall make reports and
submit their books to federal bureau is
OF little consequence SO long as the infor-
nation necessary for publicity is OBJ
tained. The thing that is important is
to arrive at a system which will accom-
pilsh the result: which will enable the
government to deal with such corpora
tons in the main by administrative SUI
pervision rather than by judicial pro-
cedure; whose methods will be preventive
| rather than penal; and. most important
OF all. system which will afford a per-
| manent practical ground for contact and
| cooperation between the government
ofncials charged with this work on the
one hand and corporate managers on the
other.
Assistance of Corporations.
1T is believed that the time is ripe for
such system. The bureau has had in
creas1ngly the voluntary cooperation and
assistance of most of the large corpora
| tons involved in the subject matter of the
bureaus Investigations. The assistance
given by the leaders Of industry has been
very encouraging. especially in it's indica-
ton of the attitude of many of the ablest
men of the country and the attitude of the
public at large toward the fundamental
objects for which this bureau was Gre
ated.
There is no need-that such federal SUI
pervlsion should derogate from the proper
powers of the states The businesses of
today are transacted under conditions
which. from commercial standpoint, are
purely national. with no reference to
state lines. but the legal status of these
businesses Is still delimited almost wholly
by state statutes. discrepancy which
has been the cause of many existing
evils. Corporate commerce as carried on
by those great companies whose opera
tons substantially constitute the whole
problem before us is national. and has
been deliberately made national: the con-
troll over them should. to some extent at
least. be also NATIONAL
Direction Of Public Opinion.
It is with such information as the bu-
reau Of corporations is able. under the
law. to collect and publish ''that the great
too anfy Of -
| intelligently and efficiently directed at
those industrial evils that constitute the
most important of our present problems.
Corporate combination. as such, ap-
pears to be not only an economic neces-
sity, but also largely an accomplished
fact It is not the existence of Industrial
power. but rather its misuse. that is the
| real problem. The government should di-
rect its attention toward preventing un-
fair methods and toward keeping open the
opportunities for competition in industry"
Little Idea OF the accomplishments of
the bureau of corporations during the fis-
cal year ended June 30 last is afforded by
the report for the reason that. under the
law. the results achieved may be made
public. only. by the President. or through
his express authority. Commissioner
Smith points out. however, that the chief
legal work of the bureau during the year
consisted in aiding the law officers of the
government In preparing and prosecuting
indictments against the oil trust for al
legged offenses against the Elkins law dds
criminative in railway rates.. The re-
port says: 1.-THE offenses upon which these
| indictments were brought were not mere
technical breaches of. law, but were, in
most cases. willful. lOng-continued and
dangerous violations of the entire spirit
and letter of the legislation forbidding
railway determinations"
Commissioner Smith says he is contin-
uing the Investigations already begun into
the industries of petroleum. tobacco and
steel. Under resolutions adopted by the
last Congress the bureau also is making
Investigations into the operations of the
International Harvester Company: into
the cause of the high price of lumber.
with view to developing any combina-
ton that may exist; into the cause of
fluctuations and differences in the price of
cotton, and into patents granted to OFF,
GERS and employees of the United States.
An inquiry is also being conducted into
water transportation, both coastwise and
internal.