The Mobridge news. [volume] (Mobridge, Walworth Co., S.D.) 190?-1917, 1911-12-08

| pro-rata and common ownership IN all
| these companies by former stockholders
| of the trust would insure a continuance
OF the same old single control OF ali the
| companies into which the trust has by
| decree been disintegrated This is er-
roneous and is based upon the assumed in
efficacy and innocuousness Of judicial in
| functions. The companies are enjoined
from cooperation or combination, they
| have different managers. directors. pur-
chasing and sales agents II all or any
OF the numerous stockholders, reaching
into the thousands attempt to secure
concerted action OF the companies with a
view TO the control Of the market. their
number Is so large that such attempt
could not well be concealed and It's prime
movers and all its participants would be
at once subject to contempt proceedings
and Imprisonment OF summary charac-
ter. The immediate result OF the present
situation will necessarily be activity by
all the companies under different man.
ayers and then competition must follow.
or there will be activity by one company
and stagnation by another.
Cry for Repeal of Law.
But now that the antitrust act is seen
to be effective for the accomplishment OF
the purpose Of it's enactment. we are met
by a cry from many different quarters
for its repeal. 1t is said TO be obstructive
OF business progress, 10 De an attempt 10
restore old fashioned methods of de.
structive competition between small units.
and to make impossible those useful COM
binationS of capital and the reduction OF
the cost of production that are essential
TO continued prosperity and normal
growth.
In the recent decisions the Supreme
court makes clear that there Is nothing
in the statute which condemns combina-
tons of capital or mere bigness Of plant
organized to secure economy in produc-
ton and a reduction Of its cost. 1t is only
when the purpose or necessary effect OF
the organization and maintenance Of the
combination or the aggregation of i'm
mense size are the sitting of competition.
actual and potential, and the enhancing
Of prices and establishing monopoly.
that the statute is violated.
For Federal Incorporation.
In a special message to congress on
January :. 1910. l ventured to point out
the disturbance to business that would
probably attend the dissolution OF
these offending trusts. l 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 wage earners, employees.
and associated tradesmen must neces-
sarily tend to disturb the confidence or
the business community. 70 dry up the
now flowing sources OF capital from its
places OF boarding. and produce halt
in our present prosperity that VIII
cause suffering and strained circum-
stances among the innocent many for
the fault of the guilty few. The ques-
ton which l wish in this message to
bring clearly to the consideration anc
discussion of congress is whether. IN
order to avoid such a possible business
do, he h
which these business combinations may
be offered means without great finan-
cial disturbance. of changing the char
acter. organization and extent OF their
business into one within the lines or
the law under federal control and su-
pervision, securing compliance with the
antitrust statute.
Generally, in the industrial combi-
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 busi-
ness far exceeds the business done in
any one state. This fact will justify
the federal government in granting a
federal charter to such a combination
to make and sell in interstate and for
eign commerce the products or usefuI
manufacture under such limitations as
will secure a compliance with the anti
trust law. It is possible so to frame
tion to a federal company against
harmful, vexatious and unnecessary
invasion by the states. 1t shall subject
It to reasonable taxation and control
by the states with respect to its pure
ly local business.
Corporations organized under this
act should be prohibited from acqufr-
ing and holding stock in other corpora
tions Except for special reasons. upon
approval by the proper federal author
ity), thus avoiding the creation under
national auspices OF the holding COM
pany with subordinate corporations In
different states. which has been such aA
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.
1t Is essential that the national govern
ment shall provide for yne creation OF
national corporations to carry on
legitimate business throughout the
United States. The conflicting laws OF
the different states or the Union with
respect to foreign corporations makes
It dihcult, II not impossible. for one
corporation to comply with their re-
ouirements so as to carry on business
In a number of different states.
Federal Commission Proposed.
I do not set forth in detail the terms
II
supply the constructive legislation permit
ting and aiding the formation Of combna-
tions Of capital into federal corporations.
They should be subject to rigid rules as
to their organization and procedure, in
cuding effective publicity. and to the
closest supervision to the issue OF
stock and bonds by an executive bureau
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. 1t must
be distinctly understood that incorpora-
ton under a federal law could not ex-
empt the company thus formed and its
incorporators and managers from prose-
cution under the antitrust law for SUBJ
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
1t as great security against successful
prosecutions for violations Of the law
as would be practical or wise
I 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 tha protection of such a charter
would attract all who are anxious to keep
within the lines Of the law. Other largs
combinations that fail to take advantage
Of the federal Incorporation will not have
a right to complain II their failure Is
ascribed to unwillingness TO submit
their transactions TO the careful scrutiny.
competent supervision and publicity at
tendant upon the enjoyment Of such