Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-02-03
System Proposed by Commits
sioner of Corporations.
WOULD ASSURE STABILITY
Regards Publicity as an Important
Requisite.
TENDENCY TO CONCENTRATION
Movement That Should Be Recog-
nized and Controlled Through
Federal Supervision.

The future Of the nation must depend
largely upon the stability of its bust
ness machinery says Herbert Knox
Smith, commissioner of corporations, in
| his annual report to the Secretary of
| Commerce and Labor. THAT machinery
| cannot be permanent or successful I'M
| less it operates openly and justly. 1t
must place and keep in control of our
great commercial forces men who have
risen there solely by superior industrial
| efficiency. 1t must protect such men
from the competition of those who get
power by unfair and illegal methods and
privileges-practices that rely peculiarly
on secrecy. To do this the government
must have such supervision and control
of that corporate machinery as will main
tain in business the fundamental Amer
lean ideal of equal opportunity to all.
Records Freely Opened.
1.-The time is ready for such an adj
vance in our corporation policy. There
has been. mainly from the work Of the
present administration. a remarkable adj
vance in the attitude of the financial
| leaders Of the country. Many of them
| frankly recognize that their great COM
mercial powers are largely affected with
a public trust They give substantial
| aid to the government in correcting cor
porate evils. The bureau receives fire.
quently their requests inviting Its criti-
cism on their business methods. Very
| few concerns have refused information
| to the bureau In its Investigations. Most
of those called upon have thrown their
records open to complete inspection Some
Of them have gone to considerable ex-
pense in disclosing all possible sources
of information. Many corporate man
| ayers have found that such cooperation
| makes for increased public confidence
in these companies and for their securi-
ties. They feel that the giving of rea-
sonable information as to their opera
| lions is we'll repaid by the improved
| standing thus gained for their companies
as concerns with open accounting and
| equitable methods.
IAN excellent illustration is in the re-
| cent action of the New York cotton eX
| change The commissioner of corpora
tons in a recent report criticised certain
methods Of that exchange. The exchange
at once appointed a special committee ex-
! pressly instructed to confer with the
ment in the methods Of the exchange
| Similar action has also been taken by the
| New Orleans cotton exchange
1--WE should take advantage promptly
of this attitude among business men. 10
| do so, we must have system OF super
vision which provides working basis Tor
| conference and cooperation and which
does not rely merely on criminal pro-
cedure and opposition.
Demand From the Public.
There is not only change in the at
titude of business leaders. There 10 also
an aroused and intelligent demand from
the public for fair business methods and
for equal commercial opportunity for all.
By vigorous effort there has been created
a current Of opinion which will amply
support q modern system OF regulation
when once the details thereof are properly
worked out. Attempts have already been
made in this direction. These were ex-
emplified in a bill introduced In the last
session Of Congress, intended TO amend
the Sherman antitrust law. 1t represented
an attempt to bring about some such CON
| structiye system of publicity as above
| outlined
Movement Toward Concentration.
Discussing the general subject OF cor
porate regulation and control, Commits
sioner Smith says:
| "There Is an irresistible movement
toward concentration in business. we
must recognize the fact that Industrial
concentration Is already largely accom-
| plished, in spite of general statutory pro-
! hibition The aim Of new legislation
should be to regulate rather than to pro-
| hibt combination. 1t is an obvious ab-
| surdity to attempt to do both at the same
| time and prohibition has practically
failed Our present law, forbidding all
| combination, therefore needs adaptation
TO the actual facts. If we are to do any
| thing effective with the corporation ques-
ton we must make an advance on our
present legislation. The practical object
| is to see that business opportunity and
| the highways of commerce are Kept
| equally open to all; to prevent fraud. spe-
| Cot n
do this we must recognize concentration.
| supervise it. and regulate Ii. Above all
| we must have a system Of efficient pub
| licity This is the strongest means for
| our purpose efficient publicity means
! that sort Of publicity which reaches the
! average citizen under everyday condi-
| tions A permanent Office, after collect
ing material, must also summarize 1t Tor
| the public in brief. clear and reliable
| conclusion. showing important permanent
| corporate tendencies.
The Proposed System.
"rhe control by the federal government
(of corporations should be broadened
into a general constructive system based
| on tested principles of supervision, pub
| licity and cooperation The details Of
such a system in its main features should
be as follows:
1T should be operated by the federal
! government
ut should provide for a system of regu-
lar reports from the large interstate cor
porations.
"Such government office should have ac-
| cess at all reasonable times to the records
| and accounts of such corporations.
/ THAT office should publish cOncisely
the important facts disclosed. 1t should
safeguard from publication all business
secrets.
Corporations complying with these re-
j ouirements should be given the advan-
tage of a definite federal registration.
"The system should, if possible, be vol
untary.
FINALLY. supervision must be admins
| trative. No other method has the neces-
| sary flexibility.
| I've must have a system of supervision