The Democratic banner. (Mt. Vernon, Ohio) 1898-192?, 1912-04-12
KEEP
Constant Curb On The U. S.
Corporations
Says Commissioner Smith
In His Report

WdSuluBLOu, ApTu Il--DisSOlutlOll VI
the Standard OIL Company and the
American Tobacco Company are the
chief subjects discussed by Herbert
Knox Smith, commissioner of corpora.
tions, in his annual report to Secretary
Nagel
These dissolutions have made it
clear, he says, if 1t was never clear be
fore, that "the federal government
must have permanent administrative
office through which to supervise in
terstate corporate business.
Whatever shall be our ultimate poll
cy, 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 COM
bination of these various principles, in
any event such permanent admin
istrative system Is a necessary part OF
1t. That system must have broad pow
ers of investigation, taking continuous
cognizance of the operations OF large
industrial corporations.
"Such administration is necessary
for either of the foregoing policies des'
cribed, while 1t does not exclude the
others. by publicity and supervision
1t will preserve competition and pro
vide equal opportunity; by an expert
knowledge of current business condi'
tions it will display the working OF
competition, and the cases, If any,
where this fails to be of benefit.
1T will always be in position to
furnish, through its permanent force
of trained specialists, the information
needed for legislation or regulation. 1t
will also have the knowledge and data
that may be required properly to en-
force competition and to carry out the
intent of any decree Of dissolution en-
tered under the antitrust law.
"a convincing object lesson on the
need of such administrative system Is
now before US. The American Tobac-
co Company and the Standard Oil Com
pany having been disintegrated, the
resultant units are now started on a
new career These disintegrations
have been accomplished only after long
litigation and at much expense.
"The purpose was to benefit the pub
lie by broad reform In economic con-
ditions And yet the country has no
effective means of ascertaining how
far the desired reform will really be
carried out. No one can foresee the
future of these new units in the two
great industries. 1t will he purely an
economic and financial process. No
| judicial machinery Is adapted to han
die this novel problem Indeed the
circuit court expressly refused the
proposition of the attorney-generaI
that the tobacco case be kept open
for three or more years for such pur
pose Of supervision
Public interest requires that these
| two groups OF companies and any 9th
ers in like circumstances, should be
at once obliged by law to submit tC
constant inspection by "A federal Office
organized on lines similar to those
outlined above In these two cases
which are but current examples OF q
general principle, both public and pri
yate rights are involved
"The public has no means OF follow
ing the development nf competition
therein through succeeding years, no'
have the security holders in those cor
porations-- certainly, at least, those
not 'on the inslde'-~any means ol
Judging the value of their holdings un
der the novel conditions now operat
i've.
"ln short, under present conditions
as well as in whatever future course
may hereafter he followed, II perma
nent administrative office will be alb
solutely necessary. The vast com
plexity of corporate business and 1t:
constantly changing conditions make
It wholly impossible to enforce effec
lively any real system of restrain
through the courts alone.
THE exact form of such an admin
istratiye office IL matter for further
detailed consideration. The essential!
are permanence expert training, ad
ministratlve flexibllity, effective In
vestigation and publicity, all covering
those Interstate industrial corpora
tions whose size and operations make
them of public Importance
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