Omaha daily bee., 1909-08-25
Right Of Public Supervision as Broad
as Interests Affected.
HOLDING COMPANY NEW DE
Successor Of Trusts Legal in j
States and More Effective.
DOES WORK MORE THOROUGH
Monopoly becomes More Nearly Coz
pIete ana It's Operations Cannot
he Reached Through
State Laws.

DhIhOlIs aug. I4s-In8 excise TAX upon
corporations imposed at the special session
OF congress has q Significance far beyond
its revenue features, according to Fred
erick W. Lehman, president Of the Amer.
ican Bar association, who delivered his
annual address at the meeting Of the or
ganization today.
1T is OF highest importance as the open
ing door 20 regulation which will broaden
with the years. said Mr.. Lehman. There
is IN this no invasion of merely private
affairs. business conducted by corporate
methods 10 not a private business. Corpor-
ate powers are not patural rights and the
general welfare Il the only justification for
the grant Of them. The right of public
supervision inhsres In them and is as
broad es the interests that may be af-
fected."
sMr Lshmann declared that the trust IL
obsolete. Nobody now is 30 ignorant or
so defiant Of law ~ to think of forming
one" said he. "And It is very easy to do
much better. Out Of the ashes Of the trust
has sprung the holding company, the
trust in an improved perfected form.
The holding company does and is designed
to do exactly what was done by the
trust and does It more efficiently. Is It
under the ban of the law7 Certainly not
In all OF the states"
New "Trust" is Lesnlised.
Mr.. Lehman mentioned the prohibition
In Montana against trusts. Having slain
the seniie and debilitated trust they made
invulnsrable through legitimacy its youth
ful and sturdy SUCCESSOR, the holding COM
pany" said he. The speaker said these
two laws stand toSether, with the result
that any industry or bushes Of the state
may be legally monopoiiEed. Provided It
n well and thoroughly done. and no half
way measures are employed. This condl-
tion Of the law exists In other states, he
asserted.
But The holding company is not the
fun and final dsYslopmsnt of industgiAi
eambination," continued Mr.. Lehman.
This q Feeched ~ ne single corporation
with unlimited power 0f capitalization and
diract owneFBhtp Of the business ana pro-
[peFties With which It deals Here IL elm
mated evan the disturbing element OF min
ority interests in constituent companies
Yet states which prohibit trusts and as
sumo TO prohibit monopoiies. set no bounds
70 the capitalization OF their corporations
or fix the hnit 90 high that under it many
industries may be completely engrossed.
The Fssnlt OF Huoh legislation is simply
20 prevent combination where the ap-
pearanoe Of competition is maintained and
to sanction II where the combination is
Open avoWed ana most effective. That GER
ytainiy wes not the popular purpose. The
movement against trusts was against the
monopoly of industry or business, how
\ ever accomplished, and the more
! thoroughly Il was done, the greater was
the Objection to n. The assurance that
the economies rssulting from combination
would ehaapen production ana that this
would SO 70 the benefit Of the consumer
was never accepted. Our people have no
faith IN a benevolent deapotism. They know
that power tsnds 70 abuse. A corporation
large enough TO sngross an industry can
not be trusted 10 q generous or even q
just use Of In mastery. An enlightened
self-lntsgest may find its real and lasting
advantage IN moderation. but self-interest
does not mean Acknowledgement. Recent
dsiolosaRss shgW that greed has not changed
tts nstuye and stili grows by what 1t feeds
apon The complete absorption Of q rival
Il not beyond its capacity, and the crumbs
Of q false balance are not beneath IT.
eoVStousnsnA.
Ne HAsnOny Between States.
mo state can deal with the problem
angly and master It, and there has been
ana can be no concert OF action between
The states.
THE Sreet Industrial corporations are IN
practical effect ss much agencies OF in
terbtate commerce are the great carrier
companies. II the production OF q com
modify II under one control commerce In
mat oommodity IL under the same con.
troll. bat unfortunately production is held
not 20 bs within the commerce CLAUSE OF
the federal constitution. and so eombina-
tions % snsross production may be ef,
feetsd because the general government
oann0t prevent them. and the states II
which they are located will not. But
something can be done under the taxing
power.
Mr.. Lehman then referred 10 the signif
tcanoe OF the federal tax on corporations
Continuins. the speaker said: 'Almos
the first law enacted by the first congress
OF the United States at its first session
was one levying duties upon imports, tn,
purposes declared by the act being 'th
support OF government the discharge Oi
the debts Of the United States, and the en-
SSuTsssIasnt and protection OK msRufRs
= lures and we have never been withOu
such law. What may thus be aided b.
the government may also be regulated
for there II no more a stretch OF fedora
authority IN the exercise, OF control ovel
out industries than In extending 10 them I
constant fostering care.
s1PsrvisiOn Aids Investor.
'lrhs investor In corporate securities
needs the protection which comes from su
peryiaiOn and publicity. The New Yorl
Bar association recently recommended
SiaW permitting corporation to issue shAre
without a par value and as representa-
only aiiQuot parts Of the ownership. Th
proposition. Il was said, had attracted
great deal OF sympathetic support iron
business men who were looking for a wa!
Of reeOncllng the necessary methods o
business with the interests OF ethics an,
who feel that they have been disturbed b!
the apparent conflict and more than al