The Thibodaux sentinel. (Thibodaux, La.) 1905-1912, 1911-12-09

trust A'"es'
! II has been assumed that the presen,
| pto~rata and common ownership in al
| tnese companies by former stockhoider,
| OF the trust would insure a continuance
VI tne same old single control o. all thu
| companies into which the trust has By
decree been disintegrated This ia er.
Toneous and is based upon the assumed in.
| efncacy and fnnocuousness Of judicial In
functions. The companies are enjoined
from cooperation or combination: they
nave different managers. directors pur.
| cnasing and sales agents. If all or an.
| 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, theii
| number is 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 proceedinga
| and Imprisonment of a summary charac-
ter. The immediate result of the presen,
| situation win necessarily be activity by
all the companies under different man
/ ayers afsd tsssns coiapetttson mist follow
! or there win be activity BY one company
and stagnation by another.
Cry for Repeal Of Law.
But now that the antitrust act is seen
the purpose of its enactment, we are met
I by q 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-
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-
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 esta ablishing a monopoly.
that the statute is violated.
For Federal incorporation.
In a special message to congress on
January :. 1910 i ventured to point out
the disturbance to business that would
proba bly, attend the dissolution OF
these offending trusts. 1 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 OF
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-
tion which / wish in this message to
bring clearly to the consideration ana
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 means. without great finan-
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
Generally. in the industrial combi-
nations called Trusts the principal
business is the sale of goods in many
sta tes and in foreign markets: IN other
words. the interstate and foreign bus1-
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 usefuI
ma nufacture under such limitations as
will secure compliance with the anti
trust law. IT is possible SO 10 lfdmo
a statute that while 1t offers protec-
ton to federal company against
harmful. vexatious and unnecessary
invasion by the states it 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 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
act against combinations In restraint
Of trade is to be effectively enforced.
1t is essential that the national govern
mert shall provide for sne creation OF
national corporations to carry on
legitimate business throughout the
United States. The conflicting laws OF
the different states OF the Union with
respect to foreign corporations makes
it dihcult If not impossible. for no
corporation to comply with their re-
quirements so as to carry on business
in a number of different states"
Federal Commission Proposed.
DO not SET ICrtn IN detail lHe LeFIIo
and sections of statute which might
supply the constructive legislation permit
ting and aiding the formation Of combfna-
tfons 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 |
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
for violations OF the law
as would be practical or wise.
l recommend that the federal charters
thus to be granted shall be voluntary. at
least until experience justif1es 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
,om mbinations that fail to take advantage
II the federal incorporation will not have
right to complain If their failure is
lscribed to unwillingness to submit
heir transactions to the careful scrutiny.
competent supervision and publicity at
endant upon the enjoyment of such
harter.