New-York tribune., 1910-02-18
SEES ONLY BENEFIT
NIGEL ON FEDERAL
CORPORATIONS.
-4nssrers Objections and Points
Ont 4duantagcs Of
Taft Plan.


aenartment of Commerce and Labor in an
address before the Industrial Club here to-
night. declared that federal control OF cor
porstions is necessary TO the CONNER SIai
prosperity OF the country
As Ia the power Of the national govern
raent 10 authorize the organization OF fed
ersl corporations. he said 5here could he
no question. The existing system of clash
ing state faws-.a system on ali sides al
war with itself''-he regarded as intolerabie
and he assured his hearers that federal
incorporation law such President Taft
had proposed could make fer nothing but
the general good
= change OF attitude regarding the rela-
fion OF national To state authority. he be-
lieved. had corle over the country with the
srvelopr7ent Of problems too big for the
states individually 10 meet
Among the more important problems
re said. appears tc he the quesnoA
whether OF not the national government
may and should authorize and regulate the
organization and conduct Of federal cor
porations Only few years ago the baFe
suggestion of s-Ich an idea filled the puohc
with dismay. The authority was denleo
and the policy was questioned. To-day lie
1rreconcilable conflicts TO which ORDINARY
business organizations are subjected IN our
states have forced q general recognition
that something must be done 10 relieve 1he
situation. The idea is not limited 10 any
particular locality Of our country or 10 any
special class. From all parts East and
West. North and South, city and country
come suggestions that some relief upon
,17.se lines must he worked out The
proposition has now been squarely put be
fore the country The President of the
United States has made & distinct recon-
,nendsrion IN message calling attention
re the needs anc submitting for consldera-
ZION a form TO which legislators and con-
stituents may give their attention
The need and purpose of federal control
Of corporations. the Secretary said, he be-
lie1ed 10 he simply to place a private
business company in its commercial activity
precisely where the Constitution undertooA
70 put he citizens Of the United States
The purpose is 10 organize companies that
NAV engage in interstate commerce under
. regulations fixed by the federal govern
r77ert and free from the unnatural and un-
economical embarrassments which 50 far
any state has been at liberty 10 interpose -
Mr. Nagel began his address by saying
that an impression seemed to prevail that
in matters of legislation the national gov
eighty This danger he believed 10 be ex-
aggerated, especially with reference TO the
federal incorporation bill. The questions
arising he stated as follows:
First - Has the national government
through Congress the power 10 authorize
the Organization of federal corporations?
Second-W hat are the conditions that
make legislation OF this kind advisable?
Third-Nhat would be the more marked
q
40 DOUBT CT AUTHORITY.
Answering them. he said, ii part:
The authority. which only few years
ago would probably have been denied with
oLt discussion. now seems 10 be doubted
b- very few. Indeed, il has seemed TO me
from the start that no could subject
this question 10 2 thoughtful consideration
without arriving at the CONCLUSION 1iat fhe
federal Congress must undoubtedly nave
the authority. From the earliest case IN
which the exclusive right of Congress 10
regulate Interstate commerce was consId-
cred Il was made apparent thai the au-
JAori1v to provide for the organization OF
business corporations was necessary III
sidenL 70 the exercise OF that authority
l3ut this conclusion was not left 10 IN
ference because again ana 2San the
supreme Court Of the nited states mas
said in terms that Congress has inns power
in the case or qUaSl-pubHc corporations
That power has been exercised IN the past
without question or doubt In the case OF
7,-Ivare business corporations il has been
asserted without hesitation by the courts.
When il has been said that the states
have neglected their opportunities and
that in consequence me 1edera govern
u91uf has beeu tempted 10 encroach upon
their authority. ] am l'ersuaced mat the
charge against the states has gone too
far The failure of the states successfully
20 cope with the conditions that have in
ev1ts bly arisen in the development Of our
commerce Is not to be ascTibed 10 neSH-
sence - much as 10 ina blllty
The plain ana indisputabe fact Is that
the commerce Of those organizations with
which We are really concerned has out
grown both the boundaries and the au-
fhorfty of any particular state. ReailZ-
ing that have 2 national commerce. we
ere naturally calling upon national au-
rhority to control il and 10 protect IL
DEFECTS IN PRESENT SYSTEM.
Nr Nagel reviewed the embarra ssments
arising from the present system. in which
he said. each state has the power 10
exclude absolutely the corporate orsani-
cation cf every other state, and has the
r7rivilese Of fixing the conditions upon which
s1lch corpoTariGT NAY enter as wei as the
time when il may have TO quit and pro-
oeeded-
The result is altogether anomalous. 4
corporation organized ia one state and
engaged in business IN border city OF
mat state has right as q matter OF law
10 cross the boundary and 10 transact
business IN Tie sister state TWO cities TO
centre are governed by distinct codes of
law, and one and the same business or
xsuizafion exists in one as a matter of
right and may he excluded from the
other al any time as matter of law
Ccrpcrstions organized by state authority
enter other states al the risk cI being eA
RELIED at any lime. OF seeing their property
1ut on the- market and the good will
-rhich they have built up destroyed with
out conpensation Regulations made ia
slre state as 10 the character Of The
product 10 ne offered may he and often
are in conflict with similar regulations in
other states thai constitute ready market
for the same concern
ADVANTAGES OF NEW PLAN.
Nr NageI said he had no fear OF the
consequences Of the adoption of the federal
Incorporation plan. although il was so COM