Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1911-12-07
Supplemental Legislation Needed-Not
RepeaI or Anendn1ent

for sitting competition and effecting- me-
nopoly. should be described with sufficient
accuracy in a criminal statute on the one
hand TO enable the government to short
en- its task by prosecuting single nlisde-
meanors instead of an entire couspirac,,
and, on the other hand, to serve the pur-
pose of pointing out more in detail to the
businesI community what must he
avoided.
Federal Incorporation Recommended.
In a special message to congress on
January Z, 1910 I ventured to point out
the disturbance TO business that would
probably attend the dissolution of
these offending trusts. [ said:
But such an investigation and pos
sible prosecution OF corporations whose
prosperity or destruction affects the
comfort not only of stockholders but of
millions of wa ge earners. employees.
and associated tradesmen must neces-
sarily tend to disturb the confidence Of
the business community. 10 dry up the
now flowing sources of capital from its
places OF boarding, and produce halt
in our present prosperity that will
cause suffering and strained circum-
stances among the innocent many for
the fault of the guilty few. The ques-
tion which l wish in this message TO
bring clearly to the consideration and
discussion of congress is whether in
Danger. something cannot be done by
which these business combinations may
be offered a means. without great finan-
cial distur bance of changing the char
acter, organization and extent Of their
business into one within the lines Of
the law under federal control and SUI
pervision. securing compliance with the
antitrust statute.
Generally. in the industrial comb
nations called Trusts the principal
business is the sale of goods in many
states and in foreign markets; in other
words. the Interstate and foreign bust
ness far exceeds the business done in
any one state. This fact will justify
the federal government in granting
federal charter to such a combination
to make and sell in interstate and for
eign commerce the products of useful
manufacture under such limitations as
will secure a compliance with the anti
trust law. 1t is possible so to frame
q statute that while it offers protec-
ton to a federal company against
harmful. vexatious and unnecessary
invasion by the states it shall subject
it to reasonabl taxation and control
by the states with respect to its pure
ly local business.
Corporations organized under this
act should be prohibited from acquir-
ing and holding stock in other corpora
approval by the proper federal author
ity), thus avoiding the creation under
national auspices of &he holding COM
pany with subordinate corporations in
different states, which has been such an
effective agency in the creation OF the
great trusts and monopolies.
IF the prohibition of the antitrust
act against combinations in restraint
of trade is to be effectively enforced
it is essential that the national govern
ment shall provide for yne creation OF
national corporations TO carry on a
legitimate business throughout the
United States. The conflicting laws OF
the different states or the Union with
respect to foreign corporations makes
it diBcult, if not impossible, for one
corporation to comply with their re-
quirements so as to carry on business
in a number of different states"
Federal Cooperation Commission Pro
posed.
do not set forth in detail the terms
and sections of a statute which might
supply the constructive legislation permit
ting and aiding the formation of cOmbina-
tons of capital into federal corporations
They should be subject to rigid rules as
to their organization and procedure, in
Guiding effective publicity, and to ths
closest supervision as to the issue Of
or commission in the department OF
commerce and labor, to which in times of
doubt they might we'll submit their pro-
posed plans for future business. It must
be distinctly understood that inCOrpOr2-
ton under a federal law could not ex,
empt the company thus formed and iss
incorporators and managers from prose
cution under the antitrust law for sub
sequent Illegal conduct but the publicity
of its procedure and the opportunity for
frequent consultation as to the legitimate
purpose of its transactions would offer
it as great security against successful
prosecutions for violations of the law
as would be practical or wise.
Such bureau or commission might
well be invested also with the duty al
ready referred to, of aiding the courts
in the dissolution and recreation of trusts
within the law. 1t should be an eXecu-
tive tribunal of the dignity and power of
the comptroller of the currency or the
interstate commerce commission, which
now exercise supervisory power over i'm
portant classes of corporations under fed
eral regulation.
The drafting of such a federal incorpor-
alton law would offer ample opportunity
to prevent many manifest evils in corpOr-
ate management today, including ire
sponsibility Of control in the hands of
the few who are not the real owners.
incorporation voluntary.
1 recommend that the federal charters
thus to be granted shall be voluntary, at
least until experience justifies mandatory
provisions The benefit to be derived
from the operation of great businesses
under the protection of such a charter
would attract all who are anxious to keep
within the lines of the law. Other large
combinations that fail to take advantage
of the federal incorporation will not have
a right to complain if their failure is
ascrfbed to unwilIingness to submit
their transactions to the careful scrutiny,
competent supervision and publicity at
tendant upon the enjoyment Of such a
charter.
Supplemental Legislation Needed.
The opportunity thus suggested for fed
eral incorporation. it seems to me, is suit
able constructive legislation needed to IA
cilitate the squaring of great Industrial
enterprises to the rule of action laid down
by the antitrust law. This statute as
construed by the Supreme court must
continue to be the line of distinction for
legitimate business. It must be enforced.
unless we are to Danish individualism from
all business and reduce it to one common
system of regulation or control of prices
like that which now prevails with respect
to public utilities. and which when ap-
piled to all business would be long step
toward state socialism.
VIM. H. TAFT.