Los Angeles herald., 1910-02-18
COUNTRY NEEDS
FEDERAL CURB
SAYS Mr.. NAGEL
Control of Corporations
Is Subject of Speech
at Chicago
STATES IN TURMOIL
Argument Brought Forth
That Peace Comes Only
with Strong Hand

HICAGO, Feb. 17.-Federal control
of corporations is necessary to the
commercial preservation of the
country, declared Charles Nagel, secre-
tary of commerce and labor of the
United States, in an address before the
Industrial club here tonight.
AS to the power of the national gov
ernment to authorize the organization
Of federal corporations, Mr.. Nagel said
there could be no question. The exist
ing system of clashing state laWs-"a
system on all sides at war with ITSELF
he regarded as intolerable, and he as
sured his hearers that the consequence
Of federal corporation law such as
President Taft had proposed could
make for nothing but the general good.
The purpose Of the government to
regulate the corporations, in the opin-
ion of the secretary, could not be con-
sidered as an attempt to encroach upon
state authority, but as a determination
to employ old authority for the solu-
tion of new problems" A change of
attitude regarding the relation of ma
tional to state authority, he believed,
had come over the country with the
development of problems too big for
the states individually to meet.
Relief Is Demanded
Among the more important prob
lems," said Secretary Nagel, appears
to be the question whether or not the
national government may and should
authorize and regulate the organiza-
tion and conduct of federal corpora
tions Only a few years ago the bare
suggestion of such an idea filed the
public with dismay. The authority
was denied and the policy was ques-
toned. Today the trreconcilable con-
flicts to which ordinary business organ
izations are subjected in our states
have forced a general recognition that
something must be done to relieve the
situation.
1.-THE idea is not limited to any par
ticular locality OF our country or to
any special class. From all parts, east
and west, north and south, city and
country, come the suggestions that
some relief upon these lines must be
worked out. The proposition has now
been squarely put before the country.
The president of the United States has
made a distinct recommendation in a
message calling attention to the needs,
and submitting for consideration a form
to which legislators and constituents
may give their attention"
Three Grave Questions
In considering the proposition Sec
retary Nagel stated that three points
must be determined: First, the ques-
tion of the governments authority;
second, the conditions which make ad-
visable such legislation, and third, the
consequence of such legislation.
From the earliest case in which the
exclusive rights of congress to regulate
interstate commerce was considered, 1t
was made, apparent that the authority
to provide for the organization of busi-
ness corporations was a necessary in
cident to the exercise of that authority,
and again the supreme court has said
that congress has this power" said the
secretary.
1.-THE plain and indisputable fact isl
he said, that the commerce of these
organizations with which we are really
concerned has outgrown both the
boundaries and the authority of any
particular state. IN other words, the
Individual state is vainly struggling to
control conditions as well as power
and the modern demand for congress
sional action Is nothing but the plain,
practical call for an authority that is
equal to the occasion with which it
has to deal. Realizing that we have
a national commerce, we are naturally
calling upon national authority to con-
troll it, and to protect it."
Fair Control Needed
The need and purpose of federal con-
troll of corporations, the secretary
stated, he believed to be simply to
place a private business company in
its commercial activity precisely where
the constitution undertook to put the
citizens of the United States" The
purpose is to organize companies that
may engage in interstate commerce un-
der regulations fixed by the federal
government and free from the unnat-
ural and uneconomical embarrassments
which so far any state has been at
liberty to interpose."
Another phase of the question dis
cussed by the secretary was the inter-
national commerce of the country. Up
to the present time, he said, the coun-
try has rested on the belief that de-
velopment of domestic commerce was
sufficient. Other countries felt the
need of international commercial de-
velopment long ago and the United
States, he urged, must do all that was
necessary to meet what it's competi-
tors were doing in that line.
"We are now engaged in establishing
relations with foreign countries" con-
tinued the speaker, Cooking for the
opportunities of our commerce in their
midst We are shaping our treaties to
secure open doors and equal rights with
other countries. In what form shall
Tn1S pAAoO IT'S
appearance in other countries If not
in the form of the accepted corporate
organization?
Present System Ruinous
"Does it stand to reason that we can
successfully depend upon corporation
large enough to engage in foreign COM
merce and at the same time too large
TO be admitted by most of the states
composing our own Union? VIII it be
seriously contended that we will be
blind enough to engage in foreign busi-
ness under federal protection, and at
the same time permit individual states
of the Union to cut the pins from un-
der this same commercial organization
at home? We cannot hope to succeed
with such an inconsistent and ruinous
9system.
apart from all the embarrassments
(Which antagonistic and conflicting state
legislation has so far created it appears
to me that contemplation of the future
Of our foreign commerce in itself abb
solutely settles the need for an intelli-
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