The Greenville journal. [volume] (Greenville, Ohio) 1850-1918, 1911-12-07

ANNNNN AON nAGu y DllUOso Bccu NulGEea
by court than that against the Tobacco
trust
II has been assumed that the present
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 all the
companies into which the trust has By
decree been disintegrated This Is er-
roneouH and is based upon the assumed in
efficacy and iunocuousness 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
view to the control Of the market, their
number IL so large that such an attempt
could not well be concealed and its prime
movers and all its participants would be
at once subject to contempt proceedings
and imprisonment OF a summary charac-
ter. The immediate result Of the present
situation viii 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 IL seen
to be effective for the accomplishment Of
the purpose of its enactment, we nre met
by a cry from many different quarters
for its repeal. 1t is said to be obstructive
Of business progress. to be an attempt to
restore old-fashioned methods Of de-
structlve 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-
tions 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 Z, 1910, 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 wage earners, employees.
and associated tradesmen must neces-
sarily tend to disturb the confidence or
the business community TO 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-
ton which wish in this message to
bring clearly to the consideration and
discussion of congress Is whether, in
order to avoid such a possible business
dauger. something cannot be done by
which these business combinations may
be offered a means. without great f1nan-
cial disturbance. 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 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 OF useful
manufacture under such limitations aa
will secure a compliance with the anti
trust law. 1t is possible so to frame
O. statute that while 1T offers protec-
tion to a federal company against
harmful, vexatious and unnecessary
invasion by the states, 1t shall subject
1t to reasonable taxation and control
"a. - a. Aa, $50
ly local business.
"CorporationS organized under this
act should be prohibited from acquir-
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 an
effective agency in the creation OF the
great trusts and monopolies.
IF the prohibition of the ANTITRUST
sact against combinations in restraint
of trade is to be effectively enforced.
1t is essential that the national govern
ment shall provide for the creation OF
national corporations to carry on
legitimate business throughout the
United States. The conflicting laws OF
the different states OF the Union with
1t diMcult If not impossible, for one
corporation to comply with their re-
uuirements so as to carry on business
in a number of different states"
Federal Commission Proposed.
I 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-
tions of capital into federal corporations.
They should be subject to rigid rules as
to their organization and procedure, in
cluding effective publicity, and to the
closest supervision as 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 sub
sequent Illegal conduct, but the publicity
Of Its procedure and the opportunity for
frequent consultation as to the legitimate
purpose of it's transactions would offer
it 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 the protection OF such 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
IA right to complain If 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 a
charter.
Fame Of u Hung Chang,