New-York tribune., 1909-12-29
PRESIDENT FOR
FEDERAL CONTROL
ANTITRUST UESS4GE
FIRM IN TONE.
WOuld Protect Corporations
from Possible Injustice
By States.
rFronl Ths Trlsun. Ru-.an- .


in a movement which his closest ad-
visers believe will prove the most mo-
mentous of his administration
Mr. Taft Will urge upon Congress. a,
was told in dispatches 10 The Tribune -
December 81. the necessity Of federal
incorporation act. and will further sub
nit that as an Inevitable corollary -
such federal Incorporation the corpOrate
entity 50 created must be adequately
protected from the possible injustice ~
state enactments. whether they be in the
form OF regulation OF Of taxation.
The Presidents views. a set forth IN
this message. will constitute a material
deviation from the popularity accepted
theory regarding the rights OF the states
over intrastate commerce. which pOpula.
theory he will argue not only con-
stitutes an anachronism closely akin 20
a violation OF one OF the chief inhibi
tiOns OF the Constitution Of the United
States. the guarantee Cf equal rights to
the citizens of all the states in each.
but provides an actual menace TO the
proper and normal development OF the
foreign commerce Of the nation
He will even maintain that the exist
ing popular theory in operation closely
approximates. if il does not actually
constitute a grave obstacle to Interstate
commerce and is capable OF working in
calcuIabIe injury to the business Of the
country.
CURB OF THE STATES
Mr.. Taft viii point out that the exist
ing agencies of communication 80 essen
tiaI TO commerce. such as the mail. the
telegraph and rail transportation, are
now controlled by the federal govern
ment; that interstate contracts are
made by mail or by telegraph; that
these contracts are fulfilled by the de-
livery of goods by interstate carriers:
and, finally, that they are completed by
payments made through national banks.
The one link necessary 20 complete the
chain is the federal. and therefore uni
form, control OF the regulations affect
ing such commerce.
Mr.. Taft has become convinced OF the
inutility not TO say futility. of attempts
by the federal government to extend the
foreign trade OF the nation. which can
only be done by corporations. while any
one of the fOrty-six sovereign states en-
joys the power 10 exclude such cOrpo-
rations from it's boundaries or 10 impose
upon them regulations which would
compass their destruction
He finds the federal government en-
tering into treaties OF commerce with
foreign powers whereby specific privi-
leges are guaranteed To the corporations
of the signatOry powers. which guaran-
tees may be violated at any time BY
any or all of the states of this nation
He finds the energies of the federal gov
eminent devoted to the promotion of a
foreign trade which could be carried on
only by a corporation prohibited because
OF Che size of its capital from doing
business in several of the states.
Within this country he finds corpora
tions enjoying the right 10 transact busi-
ness within the state OF their creation.
but without the right 10 transact bust
ness in any other state. and doing so
only by the grace OF existing adIniris-
uratiOns of such states. which are liable
TO change at any time.
federal INCORPORATION ESSEN
TIAL-
That the federal government enjoys
abundant power 70 regulate commerce
between the states. even 10 the extent
OF prescribing what shall constitute a
just rate for transportation. is every
where conceded, but the President
through close study of the problems
growing out of this responsibility. also
believes that the power of the states 10
brescribe rates for inurastate commerce
may materially affect those rates
charged for transportation between the
states.
That a common carrier may submit as
a reason for interstate rates which might
ordinarily be deemed too high the fact
OF its COmpulsion 10 render intraState
Sc ervice al abnormaIIy low rates cannot
be gainsaid. and this fact affords Mr.
Taft another reason for his belief thar
federal incorporation IS essential 10 the
further normal development OF COM
merce
On more than one occasion the Presi-
dents attention mas been directed 70 tbs
seeming anomaly of permitting a single
state To create corporate entity under
conditions which might be promptly re-
jected by the remaining forty-dve states
New Jersey has been subjected 10 spe-
cial criticism OF this character. II has
been customary To reply that each o.
the remaining states enjoyed the priv
ilege of excluding such a corporation
from doing business within its borders
The enjoyment of that privilege how
ever. has not served 10 check the growth
of such corporations, and efforts at state
regulation or inhibition have almost IN
variably been undertaken only after
great numbers of people have invested
in the stock OF such corporations
As instance OF the length 10
which state regulation may be carried
the President has before him the cas-
of several states which have actually
prescribed the maximum compensation
which mutual insurance companies NAV
pay To their officers and upon what
terms they must at all times be ready
To advance money upon policies.
Investigations conducted in connec-
ton with the pure food law have r.
vealed the fact that no large producer
can possibly so manufacture or label his
goods as 20 meet the requirements OF
the forty six states with regard IN their
retail trade