Lower coast gazette., 1910-01-15

1IS bI.SlIltSS, d!Ii maui llltiI " II ~
back into the zone Of lawfulness. without
losing 10 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 manufacturers our foreign
trade has been greatly Increased.
Asks National Corporation Law.
II therefore recommend tie enactment
by congress Of a general law providing
for the formation of corporations to en-
gage in trade and among the
states and with foreign nations, protect
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
have arisen Under state control. Such a
law should provide for the issue of stock
Of such corpOratiOnaS 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 a full and complete dis
closure of all the facts pertaining to the
value or 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
pOratlOns to the same taxation as i'm
posed by the states within which it may
| NC oiNuol'" "Ppl oNliS M Ptcp'lty
located therein, M it should require
such corporations to file full and COM
| plete reports of their operations with the
department Of and labor at
regular intervals. Corporations organized
under this act should be prohibited from
acquiring and holding stock in other cor
porations Except for special reasons upon
approval by the proper federal author
ity), thus avoiding the creation. under
national auspices, of the holding company
with subordinate corporations in different
states which has been such al effective
agency in the creation Of the great trusts
and m%onopolies.
State Laws Conflict.
IF the prohibition of the antitrust act
against combinations in restraint Of trade
Is to be effectively enforced, it is essen
tial that the national government shall
provide for the creation Of national cor
pOratlOnS to carry on a legitimate bust
ness throughout the United States. The
conflicting 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 so as to carry on business
in a number of different states.
ITO the suggestion that this proposal Of
federal incorporation for industrial COM
binations is intended to furnish them a
refuge in which to continue industrial
business under federal protection. 1t
should be said that the measure contem-
plated does not repeal the Sherman anti
trust law and is not to be framed so as
to permit the doing OF the wrongs which
1t is the purpose of that law to prevent,
but only to foster a continuance and ad-
vance Of the highest industrial efficiency
without permitting industrial abuses.
"Such a national incorporation law will
be opposed, first, by those who believe
that trusts should be completely broken
I'M and tjnir rrn,nr., 5aet~p,l -sl
be opposed, second. by those who doubt
the cOnstitutionatity Of such federal in
corporation and even if it is valid. object
to it rs too great federal Capitalization.
1t will be opposed. third, by those who
will insist that a mere voluntary inc0r-
assistance the worst Of the Offenders
against the antitrust statute and who
Will therefore propose instead Of 1t a SyS-
TEN of compulsory licenses for all feder-
al corporations engaged in interstate
business.
LET US consider these objections in
their order. The government is now try
ing to dissolve some Of these combina-
tons and it is not tho intention of the
government to desist in the least degree
In its effort to end these combinations
which. are to-day ~monopolizing the COM
pears that the acquisition and concen-
tration Of property go to the extent Of
creating a monopoly of substantially and
directly restraining interstate commerce.,
1t is not the intention Of the government
to permit this monopoly to exist under
federal incorporation or to transfer to
the protecting wing Of the federal gov
ernmen of a state corporation now vio-
latinS the Sherman act. But it is not,
and should not be, the policy Of the gov
eminent to prevent reasonable concen-
tration of capital which is necessary to
the economic development Of manufac-
ture, trade and commerce.
May Doubt ConstitutionaIity.
"Second-There are those who doubt the
constitutionality of such federal incorpor-
alton The regulation of interstate and
foreign commerce is certainly conferred
IN the fullest measure upon congress, and
II for the purpose of securing in the most
thorough manner that kind of regulation,
congress shall insist that it may provide
and authorize agencies to carry on that
commerce, it would seem to be within its
power, this has been distinctly affirmed
with respect to railroad companies doing
an interstate business and interstate
bridges. The power of incorporation has
been exercised by congress and upheld
by the supreme court in this regard.
Why, then. with respect to any other
of goods across state boundaries and into
foreign countries, may the same power
not be asserted? Indeed, it is the very
fact that they carry on interstate com
merce that makes these great Industrial
concerns subject to federal prosecution
and control. How far as incidental to
the carrying on Of that commerce il may
be within the power Of the federal gov
m to authorize the manufacturer Of
goods, is perhaps more open to discus
sion, though a recent decision Of the SUI
preme court would seem to answer that
question in the affirmative.
The third objection, that the worst Of
tenders vii! not accept federal incorpora-
ton, is easily answered. The DEGREES OF
Injunction recently adopted in prosecu-
tons under the antitrust law are 50
thorough and sweeping that the corpora
courses before them:
First, they must resolve themselves
into their component parts in the differ
emit states, with a consequent loss to
themselves of capital and effective organ
lzatlon and to the country of concen-
trated energy and enterprise; or second,
IN defiance of the law and under some
secret trust they must attempt to CON
tlnue their business in violation of the
FEDERAL statute. and thus incur the pen
alties of contempt and bring on an in
evitabie criminal prosecution of the indi-
Vlouals named IN the decree and their as
socrates: or
Third, they must %reorganize and ac-
cept in good faith the federal charter 7
suggest a federal compulsory license law,
urged as a substitute for a federal incor-
poration law. Is unnecessary except to
reach that kind of corporation which, by
virtue of the considerations already aG- !
vanced: will take advantage voluntarily
or an Incorporation law. while the other
state corporations doing an interstate
business do not need the supervision or
the regulation of federal license and
Wnllt nIV n
thereby"