Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1910-01-07
Plans General Law Protecting
Business from Undue State
interference.

their legitimate capital in a federal
Corporation, and to carry on their large
business within the lines of the Law.
Second. There are those who doubt
the constitutionality of such Federal
Incorporation. The regulation of inter-
state and foreign commerce is certainly
conferred in the fullest measure upon
Congress, and If for the purpose of
securing in the most thorough name
that kind of regulation. Congress shall
insist that il may provide and authorize
certain agencies to carry IN that COM
merce, 1t would seem to be within it's
power. This has been distinctly at
firmed with respect to railroad COM
panies doing an interstate business and
interstate bridges. The power OF in
corporation has been exercised by Con-
eress and upheld by the Supreme
Court in this regard. Why. then, with
respect to any other form OF interstate
like the sale OF goods across
state boundaries and into foreign COM
merce, may the same power not be
asserted? Indeed, it Is the very fact
that they carry on interstate commerce
that makes these great industrial con-
Germs 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 Fed
eral government to authorize the
manufacture of goods, Is perhaps more
open to discussion. though a recent de-
cision of the Supreme Court would
seem to answer that question in the
affirmative,
Even those who are willing to con-
cede that the supreme Court n a sis-
tain such Federal Incorporation arc in
clined to oppose It o N the ground Of its
tendency to the enlargement of tht
Federal power at the expense OF the
power of the States. 1t is a sufficient
answer to this argument to say that nc
other method can be suggested which
offers Federal protection on the one
hand and close Federal supervision or
tho other of these great organizations
that are in fact Federal because they
are as wide as the country and are en
tirely unlimited In their business by
state lines. Nor is the Capitalization oil
Federal power under this act likely &c
be excessive. Only the largest corpora
tions would avail themselves OF such
law, because the burden OF complete
Federal supervision and control that
must certainly be imposed to accom-
plish the purpose Of the incorporation
would not be accepted by an ordinary
business concern.
Answers Objections.
The third objection, that the worst
offenders will not accept Federal incor.
poration, is easily answered. The de-
crees OF injunction recently adopted ir
prosecutions under the antitrust law
are so thorough and sweeping that ths
corporations affected by them have buI
three courses before them:
First, they must resolve themselves
into their component parts in the diff
ferent States, with q consequent loss e
themselves OF capital and effective or
ganization and to the country of cot
contracted energy and enterprise; or
Second, in defiance of law and undel
some secret trust they must attempt Il
continue their business In violation O
the Federal statute, and thus incur the
penalties of contempt and bring on al
inevitable criminal prosecution OF tn,
individuals named in the decree and
their associates; or,
ItJtd, tilCJ Aioot oh0 ~
cept in good faith the Federal charter
/ suggest.
A Federal compulsory license law,
urged as a substitute for a Federal in
corporation law, is unnecessary except
to reach that kind of corporation which,
by virtue of the considerations already
advanced, will take advantage yolun.
tarily of an Incorporation law, while
the other state corporations doing an
interstate business do not need the
supervision or the regulation Of a Fed
eral license and would only be un-
necessarily burdened thereby.
The encouragement, at my sugges-
ton, has drafted a Federal incorpora-
ton bill, embodying the views l have
attempted to set forth. and IL will be
at the disposition OF the appropriate
committees of Congress-.
WILLIAM II. TAFT.
The White House, January Z, 1910.