The Cairo bulletin., 1910-01-08
FEDERAL INCORPORATION
AS Means Of Preventing Combinations
TO Prevent Competition.


There has been marked tendency
in business in this country for forty
years last past toward combination
of capital and plant in manufacture,
sale, and transportation The moving
causes have been several: First, It
has rendered possible great economy;
second, by a union of former COM
petitOrs it has reduced the probability
of excessive competitions; and, third,
If the combination has been extensive
enough, and certain methods in the
treatment of competitors and custom
ers have been adopted, the combiners
have secured monopoly and com
plete control of prices or rates.
A combination successful in achiev-
ing complete control over particular
line of manufacture has frequently
been called trust" I presume that
that derivation of the word is to be
explained by the fact that a usual
method of carrying out the plan of
the combination has been to put the
capital and plants of various indi
yiduals, firms. or corporations en-
gagged in the same bushes under the
control of trustees.
The increase in the capital of a
business for the purpose of reducing
the cost of production and effecting
economy in the management has be-
come as essential in modern progress
as the change from the hand tool
to the machine. .t....
Through all our consideration Of
this grave question, however, we
must insist that the suppression of
competition, the controlling of prices,
and the monopoly or attempt to
monopolize in Interstate commerce
and business, are not only unlawful,
but contrary to the public good. and
that they must be restrained and pun
ished until ended.
| therefore recommend the enact
ment by congress of general law pro-
yiding for the formation OF corpora
tons to engage in trade and com
merce among the states and with for
eign nations, protecting them 6rom
undue interference by the states and
regulating their activities, so as to
preeynt the recurrence, under nation
al auspices of those abuses. which
have arisen under state control. Such
a law should provide for the issue of
stock Of such corporations to an
amount equal only to the cash paid in
on the stock; and if the stock be is
sued for property, then at fair yalu-
alton, ascertained under approval and
supervision of federal authority, after
la full and complete disclosure of all
The facts pertaining to the value OF
such property and the interest there.
in OF the persons to whom it is pro-
posed to issue stock in payment of
such property. 1t should subject the
real and personal property only OF
such corporations to the same taxa
ton as Is imposed by the states
within which it may be situated upon
other similar property located therein
and 1t should require such corpora.
tons to file full and complete reports
OF their operations with the depart.
ment OF commerce and labor at regu.
lar intervals. Corporations organized
under this act should be prohibited
from acquiring and holding stock in
other corporations Except for special
reasons upon approval by the proper
federal authority, thus avoiding the
creation, under national auspices. of
the holding company with subordinate
corporations in different states, which
has been such an effective agency In
the creation of the great trusts and
monopolies
If the prohibition of the antitrust
act against combinations In restraint
Of trade Is to be effectively enforced,
1t Is essential that the national gov.
eminent shall provide for the creation
Of national corporations to carry on a
Legitimate business throughout the
U. s. The conflicting laws of the diff.
lferent states of the union with re.
spect to foreign corporations make
1t difficult. If not impossible, for one
corporation to comply with their re.