Evening star., 1938-04-30


comprehensive study by the Federal
Trade Commission, the Department of
Justice, the Securities and Exchange
Commission, and such other agencies
Of government as have special expert
ence in various phases of the inquiry.
enumerate some Of the items that
should be embraced in the proposed
study The items are not intended to
be all inclusive. One or two of the
items. such as bank holding companies
and investment trusts, have already
been the subject Of special study and
legislation concerning these need not
be delayed.
Better Legal Procedure.
Cd Improvement of antitrust pro-
cedure. A revision Of the existing
antitrust laws should make them sus-
ceptible Of practical enforcement by
casting upon those charged with vio-
lations the burden Of proving facts
peculiarly within their knowledge.
Proof by the Government of identical
bids, uniform price increases, price
leadership, higher domestic than ex-
port prices, or other specified price
rigidities might be accepted as prima
facie evidence of unlawful actions
The Department of Justice and the
Federal Trade Commission should be
given more adequate and effective
power to investigate whenever there
is reason to believe that conditions
exist or practices prevail which violate
the provisions or defeat the objectives
of the antitrust laws. If investigation
reveals border-line' cases where legiti-
mate cooperative efforts to eliminate
socially and economically harmful
methods of competition in particular
industries are thwarted by fear of
possible technical violations of the
antitrust laws, remedial legislation
should be considered
AS a really effective deterrent to
personal wrong-doing, l would sug-
joined from violating the law, the
court might be empowered to enjoin
the corporation for a specified period
Of time from giving any remunerative
employment or any official position to
any person who has been found to
bear a responsibility for the wrongful
corporate action.
AS a further deterrent to corporate
wrong-doing the Government might
we'll be authorized to withhold Govern
ment purchases from companies guilty
of unfair or monopolistic practice.
Rigid Scrutiny of Mergers.
co Mergers and interlocking rela-
tionship. More rigid scrutiny through
the Federal Trade Commission and
the Securities and Exchange Commis-
sion of corporate mergers, consolida-
tions and acquisitions than that now
provided by the Clayton Act to prevent
their consummation when not clearly
in the public interest; more effective
methods for breaking up interlocking
relationships and like devices for be-
slowing business by favor.
go Financial controls. The opera
ton of financial institutions should be
directed to serve the interests of in
dependent business and restricted
against abuses which promote concen-
trations of power over American in
dustry.
fA) Investment trusts. Investment
trusts should be brought under strict
control to insure their operations in
the interests of their investors rather
than their managers. The Securities
and Exchange Commission is to make
a report to Congress on the results of
a comprehensive study of investment
trusts and their operations. which it
has carried on for nearly two years.
The investment trust, like the holding
company, puts huge aggregations of
the capital of the public at the di-
rection of few managers. Unless
properly restricted. it has potentialities
of abuse second only to the holding
company as device for the further
Capitalization of control over American
industry and American finance.
The tremendous investment funds
controlled by our great insurance COM
panies have a certain kinship to in
vestment trusts. in that these COM
panies invest as trustees the savings of
millions Of our people. The Securities
and Exchange Commission should be
authorized to make an investigation
of the facts relating to these invest
ments with particular relation to theie,
use as an instrument Of economic
power.
Bank Holding Firms Hit.
(B) Bank holding companies.
| 1t is hardly necessary to point out
the great economic power that might
be welded by group which may sue
ceed in acquiring domination over
banking resources in any considerable
area of the country. That power be-
comes particularly dangerous when il
is exercised from a distance, and
notably so when effective control is
maintained without the responsibilities
of complete ownership.
We have seen the multiplied evils
which have arisen from the holding
company system in the case of public
utilities. where small minority own
ership has been able to dominate a
far-fung system
We do not want those evils re-
peated in the banking field, and we
should take steps now to see that
they are not.
It is not a sufficient assurance
against the future to say that no
great evil has yet resulted from hold
ing company operations in this field.
The possibilities of great harm are
inherent in the situation.
Legislation Now Asked.
recommend that the Congress en-
act at this session legislation that will
effectively control the operation of
bank holding companies; prevent hold
ing companies from acquiring control
of any more banks. directly or indi-
! rectly; prevent banks controlled by
holding companies from establishing
any more branches, and make it illegal
for a holding company or any corpo-
ration or enterprise in which it is