Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1908-02-04
NATIONAL CORPORATION LAW
Herbert Knox Smith Favors General
Administrative System.
JUDICIAL PROCEDURE TOO SLOW
Report of Federal COmmissioner De-
cIares Public Opinion II Quick
to Correct Commercial
Evils.

WASHINGTON. Feb. 3-Pub!c opinion
has been prompt and efficient In the cor
rection of commercial evils when those
evils are stated specifically. This Is one
OF the conclusion reached by Herbert
Knox Smith. commissioner OF corporations.
and expressed I'm the annual report OF the
operations OF the bureau OF corporations,
made public today Naturally, under
present conditions the real power OF pub
lie opinion reaches only such cases as may
be specifically stated.
Thus" says Commissioner Smith. "eX-
perience of the bureau seems 70 point
logicall TO the need for an extension OF
such results by the creation Of general
administrative system of supervision OF
Interstate corporations which shall give,
in substantially the same form as is fur
nished now for corporation, the essen
tal facts relating to all the great inter
state corporations. Whether the system
take the form of a federal license plan
or simple requirement that interstate
corporations shall make reports and sub
NIT their books TO a federal bureau is
of little consequence, so long as the in
formation necessary for publicity is OBJ
tanned.
Judicial Process Not Best.
rive at system which will accomplish
the result; which will enable the govern
meut to deal with such corporations in the
main by administrative supervision rather
than by judicial procedure; whose methods
will be preventive rather than penal; and
most important of all. a system which will
afford a permanent practical ground for
contact and cooperation between the
government officials charged with this
work on the one hand and corporate man
ayers on the other
"It is believed that the time is ripe for
such a system. The bureau has had In
creasingly the voluntary cooperation and
assistance of most of the large corpora
tIons involved in the subject matter of the
bureaus investigation. This assistance
given by the leaders Of industry, has been
very encouraging, especially in its indica-
ton of the attitude of many of the ablest
men of the country and the attitude of
the public at large toward the funda-
mental objects for which the bureau was
created.
There is no need that such federal su-
pervision should derogate from the proper
powers of the states. The businesses of
today are transacted under conditions
which, from a commercial standpoint, are
purely national with no reference TO state
lines, but the legal status of these busi-
nesses is still limited almost wholly by
state statutes, a discrepancy which has
been the cause Of many existing evils.
Operations Are. National.
Corporate measures as carried on by
those great companies, whose operations
substantially constitute the whole problem
before us. are national and have been
deliberately made national; the control over
them. should. to some extent at least be
also national
1t is with such information as the bureau
Of corporations is able. under the law to
collect and publish that the great cor
rective force of public opinion can be in
teIligently and efficiently directed at those
Industrial evils that constitute the most
important of our present problems
Corporate combination. as such, appears
to be not only an economic necessity, but
also largely an accomplished fact.
1T 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 unfair
methods. and toward keeping open the
opportunities for competition in industry
Little idea OF the accomplishments of the
bureau of corporations during the fiscal
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.
Aid Given Prosecutors.
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 alleged offenses against the
Elkins law Determinations in railway
rates). The report says;
'The offenses upon which these indict-
ments were brought were not mere tech
nical branches Of law, but were, in most
cases. wilful. long continued and dangerous
violations OF the entire spirit and letter
of the legislation forbiddlng railway dis
ordinations"
Commissioner Smith says he is continu-
ing 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 operation of the
International Harvester company; into the
cause Of q high price Of lumber, with a
view to developing any combination that
may exist; into the causes of fluctuations
and differences I'm the price OF cotton; and