The Washington times., 1911-08-01
DISINTEGRATING THE STAN
DARD OIL COMPANY.

N--N
preme Court, both the Standard Oil
and the American Tobacco Company
have taken first formal public action
toward readjusting their corporate or
ganizations. The Standard Oil Com
pany is to be divided into thirty-three
corporations. Each holder of a proper
tion of Standard Oil stock will be given
the amount of stock in each of the
subsidiaries to which he is entitled. 1t
is stated that scrip will be given for
fractional shares, and that no less than
10000 certificates will have to be writ
ten
When this distribution is accom-
plished the same people will own the
stock as now. But they will own thir
tythree kinds instead of one. No
holder will be certain which of this
family of companies is going, in flu
ture, to get the lions share of earnings
and which will get less proportion
than formerly.
Thus there will be opportunity for
the insiders, Mr. Rockefeller and his in
innate associates, who overwhelmingly
control the stock, to manage the busi-
ness in such fashion as to conduit the
larger share of earnings into the treas
uries of whatever companies they
may choose to favor. The outsiders
will, of course, not know which are to
be the favored concerns. The fractional
shares will be undesirable, and it may
be expected that a vast amount of
dealings in them will presently result
in a still closer concentration of owner
ship in those companies which, in the
plans of the insiders, are destined to be
made the most profitable.
The possibilities of manipulation and
speculation of the surething character
are thus almost infinite. 1t will be
highly interesting to note the results
that may be brought to pass.
From the standpoint of the small
group of majority owners, the concen
tration of control will be just as solid
and firm as ever; but the small holder,
unless he is prepared to keep together
his myriad of certificates for fractional
shares, will be at great disadvantage.
In any event, the substantial unity of
the great producing, refining, and dis
tribution system will be broken up.
Not at once, of course; but if the in
siders conclude that they can add to
their gains by concentrating earnings
in a comparatively small number of
the companies the outsiders, the small
holders, will be at their mercy. Deal
ings in these forthcoming issues will
thus be largely speculative, and always
more or less dependent on the "tip" as
to what corporations are to be made
the most profitable and what the least.
These and many other obvious diff
culties in this taking to pieces the
structure of a great business organiza-
tion suggest anew the possibility that
after all the better method of handling
these problems would be through rig
orous Federal regulation, even to the
fixing of prices and determination of
the rate of earnings that may be al
lowed, if that shall prove necessary.
No such ideal as confscation has yet
been commonly indorsed by anybody.
When there are thirty-three companies
instead of one the same stockholders
will own the entire business. But the
advantage of the controlling element
will be vastly greater than before, and
the physical difficulties of doing busi-
ness will be greatly exaggerated.
We are emboldened to venture that
before many of the great industrial
combinati tions have thus been disinte-
grated the results will prove such that
such a plan as that put forward by
Senator Newlands, for Federal super
vision and control, will come to be bet
ter appreciated than it is at present.
AMERICAN GENIUS EVOLVES