The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1912-04-08
Commissioner Of Corporations
Makes His Report to Sec
retary Nagel
PERMANENT SYSTEM DESIRED
Standard Oil and Tobacco Com
panies Illustrations
Public Has No Means at Present Of
Aseertsining If Competition Has
Developed.

Washington, April SIN his an
nual report TO Secretary Nagel of the
Department Of Commerce and Labor
today. Commissioner Of Corporation
Herbert Knox Smith earnestly urges
the establishment OF a permanent
system Of federal supervision Of cor
porate business, and points out in
adequate restrictions upon his depart
ment. He says:
The actual dissolution of two great
corporate combinations, ordered by the
Supreme Court in the STANDARD oil
Co. and American Tobacco Co. cases,
/ has thrust forward the whole problem
ofof our policy toward industrial cor
porations. If II was not plain before,
it is certainly clear now that the Fed
eral Government must have a per-
manent administrative Office through
which to supervise interstate corporate
business.
There is little dispute as TO the OBJ
ject of our corporate policy. We want
business machinery of high efficiency
serving the best interests Of the ciu-
zen and returning ample reward 10 the
ability and industry of those who use
that machinery fairly. But the means
10 this end are nOw in debate.
Two great restraints may be i'm
posed upon business. One is the au-
tomato regulator. competition; the
etbcr direct syoverImental fntesven-
ton. 1t Is indeed true that under
some conditions even fair competit-
tion may result in combination. The
further question is then raised. How
far is ii desirable to enforce com
petition by dissolving such combna
tion? That question. however, need
not be discussed here.
Permanent System Needed
Whatever shall be our ultimate pol
icy. however, whether Of preserving
competition, of enforcing competition.
or Of direct governmental regulation
Of business operations: or whether as
is perhaps more likely, our policy will
be a combination Of these various
principles, ir any event such a per-
manent administrative system is
necessary part Of ii. That system
must have broad powers Of investiga-
ton, taking continuous cognizance OF
the operations of large Industrial cor
porations. such administration is nee
essary for either of the foregoing poll
cies described. while ii does not ex-
clude the others. Ey publicity and
supervision it will preserve COMPETE
ton and provide equal opportunity
by an expert knowledge OF current
business conditions il will display the
working of competition, and the cases
il any. where this fails TO be of bene-
TT. 1t will always be in a position IN
furnish. through its permanent force
Of trained specialists. the information
needed for legislation or regulation.
II will also have the knowledge and
data that may be required properly
10 enforce competition and TO carry
out the intent of any degree OF dis
solution entered under the antitrust
law.
"A convincing object lesson on the
need OF such administrative system
is now before us. The American To-
bacco Co. and the Standard oil Co.
having been disintegrated. the re-
sultant units are now started on a new
career. These disintegrations have
been accomplished only after long lit-
cation and at much expense.
Are Reforms Carried Out?
The purpose was 60 benefit the pub
lie by broad reform in economic
conditions. And yet the country has
ne effective means Of ascertaining how
far the desired reform will
be carried out. No one can forcsee the
future of these new units in the two
great industries. II will he purely an
economic and financial process. No
Judicial machinery is adapted tohandlc
this novel problem. Indeed. the Cir
cult Court expressly refused the sug-
gestion of the Attorney General that
the tobacco case be kept open for
three or more years for such purpose
of supervision
Public interest requires that these
two groups of companies and any
others in like circumstances should be
at once obliged by law to submit 10
constant inspection by a Federal Office
organized on lines similar 20 those
suggested above. In these two cases
which are but current examples Of a
general principle. both public and pri-
vate rights are involved. The pub
lie has no means OF following the de-
velopment of competition therein
through succeeding years. nor have
the security holders in those corpora