New-York tribune., 1910-02-07
FOR FEDERAL
INCORPORATION
Administration Measure Will Be Introduced
Today
SHERMAN LAW NOT TO BE UPSET
New Plan 1t Is Believed viii Counteract Decisions Adverse
to Business
rFrorr rne Tribune R,1rsa,f. ]


Of interstate and foreign cornnerce.
which the President will hand TO the
chairmen of the Senate and House Com
mittees on Judiciar, tomorrow. constt-
tutes the most important and, In tbs
opinion of many, the most radical step
in the movement for federal control of
corporations which has been taken since
the enactment, twenty years ago. OF the
Sherman antitrust act, the rtgors OF
which the new law is purposed 20 n11t-
gate in so far as that can be done with
out violating the spirit or multiplying the
purpose of that law.
Briefly, the Wickersham bill provides
for the granting of charters to federal
corporations whose franchises and privi-
Iiges will be exempt from other than
federal taxation, whose affairs shall be
conducted under the supervision OF the
Commissioner of Corporations, who Will
enjoy practically the same power over
them, including that of appointing re-
ceiver for any found insolvent. as is now
exercised by the Controller OF the Cur
rency over national banks. The Attor-
ney General has, in fact, drawn largely
on the national bank act in preparing
the new law The provisions Of the law
are calculated effectively TO protect the
rights of investors and would go far to
ward insuring the stability Of the ss-
curities of the proposed corporations.
SUBJECT TO SHERMAN LAW.
The proposed federal corporations are
made subject TO the provisions OF the
Sherman law: nevertheless they would
furnish lawful means of reorganiza-
ton for many corporations which may
be found to be unlawful under that act
II is essential 10 a proper understanding
of the purpose Of the administration 20
bear in mind It's Interpretation Of the
Sherman law and certain correlated
facts The intent Of the sherman law.
in the words of President Taft, Is the
prevention OF THE aggregation of CAPT
tai and plants with the express purposs
or implied intent TO restrain fnterstafs
or foreign commerce. or to monopOlize IL
in whole or in part
Mr. Taft emphasizes his conviction
that merely incidental restraints OF trade
are not included within the prohibition.
but only those which have for their pur-
The administration confidently expects
to be sustained by the Supreme Court in
the Tobacco Trust and the Standard Oil
cases, and that there will follow the
necessity OF instituting other prosecu-
tions for similar violations OF the Sher-
man law.
Affirmative decisions in the cases
named would bring the Tobacco Trust,
the Standard Oil and probably other
large corporations face 10 face. as the
President has expressed it. with the
necessity of adopting one of three
courses-Ffrst. they may resolve them
selves into their component parts, with
consequent loss of capital and effective
energy; second, they may attempt to
maintain a secret organization and unity
of control in defiance of the law and
under constant --enace of criminal pros
ecution and third, they may reorganize
under the federal charters he proposes
MUST NOT ACQUIRE \ MONOPOLY
The administration bill clearly fOrbids
q corporation created hereunder TO ac-
quire or TO hold the stock of another
corporation. but il specifically author
bv purchase the property Of other cor
rorations. BY this means federal cor
roration could purchase the actual prop
erty of the parent and the subsidiaT!
corporations now constituting trust.
but always with the provision that this
must not be done to the extent of ac-
quiring a monopoly OF any industry.
This provision, it will be seen. espe-
oialIv prohibits the requirement. OF the
control of other corporations by the pur-
chase of a portion OF the stock.
The late E II. Hartman. IL will 90
recalled. testified that he secured abso-
lp+s control of the Illinois Central Rail-
road as soon as ne had acquired 80 per
cent of the stock, IL being impossiole
for his opponents 10 secure control o
another so per cent 10 oppose him. u
is in the opinion OF the administrators,
this acduirement OF the control OF great
Industrial instrumentaEties by artlnciai
means and the resultant nonopoiies. not
the normal Capitalization OF corporate
control. which should be prevented.
or course. federal incorporation Is
made purely voluntary. and no corpora
,ion or individuals need avail themselves
/ OF the privileges of the proposed act un-
/ less they deem il beneficial To their in
terests and those they represent TO do
I .o B,1t in addition to the power law
/ fully 10 acquire by purchase the prop
/ critics OF a trust, or a considerable part
/ nf them the administration believes the
/ nronosed federal charter VIII offer other
/ advantages. such as the freedom from
/ Iurdensome and often conflicting state
/ legislation, which has made il little
! short of impossible for corporations TO
Z observe the law throughout the terri
/ tory in which they did business and has
! called into being those conjurtes which
I have taken the form Of subsidiary cor
,,orations. the very existence OF which
arouse suspicion as TO the iawfulness
| os the parent corporation
/ Even In the mind of the admintstrs-
tion the precise limits TO which any cor
noration may go without violating the
sherman law are not defined. Light on
this subject is expected from the forth
| coming decisions OF the Supreme Court
| although il is realized that even now the
court may refuse 10 define the law be-
yond the point made necessary In rem.