Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-01-07
PRESIDENTS MESSAGE ON REGULATION OF CORPORATIONS

legally If only they do not abuse the
the business. They point with force to
certain notorious trusts as having grown
into power through criminal methods by
the use Of illegal rebates and plain cheat
ing, and by various acts utterly yiolative
of business honesty or morality, and
urge the establishment of some legal
line of separation by which criminal
trusts of this kind can be punished.
and they. on the other hand. be per
mitted under the law to carry on their
business. Now the public. and espec-
tally the business public, ought to rid
themselves of the idea that such
distinction is practicable or can be in
troduced into the statute Certainly under
the present antitrust law no such
distinction exists. Ii has been proposed,
however. that the word reasonable
should be made a part Of the statute,
then that it should be left to the court
of trade. what is a reasonable suppress
sion of competition. what Is a reasonable
monopoly. / venture to think that this
| is to put into the hands of the court
power impossible to exercise on any
consistent principle which will insure the
uniformity of decision essential TO just
Judgment. 1t is to thrust upon the courts
a burden that they have no precedents
to enable them to carry, and TO give
them power approaching the arbitrary,
whole judicial system in disaster.
Restoring to Lawfulness.
In considering violations of the anti
trust law We ought. of course, not TO
forget that that law makes unlawful
methods Of carrying on business which
before its passage were regarded as evil
dence OF business sagacity and success,
and fhQf in aof
not because Of their intrinsic immortality,
but because of the dangerous results
| toward which they tended, the concentra-
| ton Of industrial power in the hands of
justice. In dealing, therefore, with many
of the men who have used the methods
condemned by the statute for the pur-
pose of maintaining profitable business
We may we'll facilitate change by them
in the method of doing business, and
enable them to bring it back into the
! zone of lawfulness without losing to the
country the economy of management by
which In our domestic trade the cost of
production has been materially lessened
and in competition with foreign manu-
| facturers our foreign trade has been
realty increased.
Through all our consideration of this
rave question, however, we must insist
that the suppression of competition, the
controlling Of prices and the monopoly or
attempt to monopolize in Interstate COM
| merce and business are not only unlaw-
sul, but contrary to the public good. and
that they must be restrained and pun
shed until ended.
General Law Recommended.
by Congress OF general law providing
for the formation of corporations to en-
gage in trade and commerce among the
| ing them from undue interference by the
states and regulating their activities, so
as to prevent the recurrence. under ma
| tional auspices. of those abuses which
| nave arisen under state control. Such a
| Jaw 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 issued for property.
/ then at a fair valuation, ascertained I'M
der approval and supervision of federal
| authority, after full and complete dis
| closure Of all the facts pertaining to the
| value Of such property and the interest
| therein Of the persons to whom it is
proposed to issue stock in payment OF
| such property. 1t should subject the real
and personal property only Of such cor
porations to the same taxation as is i'm
posed by the states within which it may
be situated upon other similar property
located therein, and it should require such
corporations to file full and complete re-
ports of their operations with the De-
partment Of Commerce and Labor at reg
ular intervals. Corporations organized un-
der this act should be prohibited from
acquiring and holding stock in other cor
| porations 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.
| II the prohibition of the antitrust act
against combinations in restraint of trade
| is to be effectively enforced. it is essential
| that the national government shall pro-
| vide for the creation of national corpora
tions to carry on a legitimate business
| throughout the United States. The con-
dicting laws Of the different states of the
Union with respect to foreign corpora
tons make it difficult, If not impossible,
for one corporation to comply with their
requirements as to carry on business
! in a number of different states.
Does Not Repeal Sherman Law.
To the suggestion that this proposal OF
federal incorporation for Industrial COM
| binations is intended to furnish them a
refuge in which to continue industrial
abuses under federal protection, 1t should
be said that the measure contemplated
does not repeal the Sherman antitrust
law and is not to be framed so as to per-
NIT the doings of the wrongs which it is
the purpose of that law to prevent, but
only to foster a continuance and advance
of the highest industrial efficiency with
out permitting industrial abuses.
Such a national Incorporation law will
be opposed. first. by those who believe that
trusts should be completely broken up
and their property destroyed. 1t will be
opposed, second. by those who doubt the
constitutionality of such federal incor-
poration. and even If it is valid, object to
it as too great federal Capitalization. 1t
will be opposed, third. by those who will
insist that mere voluntary incorpora-
ton like this will not attract to it's ac-
ceptance the worst of the offenders
against the antitrust statute. and who
will therefore propose instead of it a sys-
tenn of compulsory licenses for all fed
eral corporations engaged In interstate
business.
Objections Analysed.
Let US consider these objections in their
order. The government is now trying to
dissolve some of these combinations. and
1t is not the intention of the government
to desist in the least degree In its effort
to end those combinations which are to-
day monopolizing the commerce of this