'r-
The Commoner.
JUNE 23, 1911
7
5PHE STATE'S POWER OVER CORPORATIONS
Findlay, O., Juno 12, 1911. Editor Com
moner: Now that the federal judiciary and
department of justice have fully demonstrated,
in the Standard Oil and Tobacco trust cases,
their impotency, or at least, disinclination to
afford the people any effective measure of relief
against the oppressions of private monopoly, it
remains for the states to demonstrate whether
or not they are equally impotent.
Tho authentic history of the development of
this evil of private monopoly, clearly shows that
It was by means of prostitution of corporato
forms, fictions and ideal entities, as instrumen
talities in monopolistic combination, -that these
evils have grown up and been fostered and per
petuated, and without the prostitution of which
they could never have been created, and could
not be continued.
The first move of the monopoly pirate when
he starts out to capture or scuttle an industry
is to get control of the principal corporations
engaged in it, after which he creates, or scuttles
such other corporations as he requires to per
petuate or operate his monopoly.
It Is by these means, the prostitution of cor
porate forms, corporate laws and ideal fictions,
that he conceals his identity, and up to date,
has succeeded in rendering abortive every
remedy designed or contrived for the relief of
his victims, whether these victims be some in
dividual, some class, or the public at large.
These corporate laws, agencies and fictions,
these ideal entities, are the creatures of stato
legislation; and that which the state can create,
that it can control, or if need be, destroy.
Sinco the unfortunate decision of the Dart
mouth college case by Judge Marshall in the
United States supreme court, holding in effect
that the charter of a" corporation was a contract
binding upon the state, which was a vested
property right within tho meaning of the con
stitution, and hence inviolable by the state which
granted the charter, most of the states, including
Ohio, have' provided In their respective constitu
tions, the bill of rights, their organic laws, in
substance, that all powers created and conferred
by legislative authority, including that of being
a corporation, holding corporate property, or
exercising corporato functions, should be sub
ject to revocation by tho same authority by
which they were created.
Private monopoly is not only "indefensible
and intolerable" but was condemned as against
tho wise public policy of tho common law be
fore our government was formed, and it was
this same declaration of public policy which
dictated the enactment of state anti-trust laws
by the legislative authority of many, if not most
of the states. These state anti-trust statutes
are more drastic, at least, more comprehensive,
than the Sherman law of congress.
"That a corporation is a legal entity, apart
from the natural persons who compose it, is a
mere fiction, introduced for convenience In the
transaction of its business, and of those who do
business with It; but like every other fiction
of the law, when urged to an intent and pur
pose not within its reason and policy, may be
disregarded. But tho fiction can not bo abused.
A corporation can not be formed (or used) for
the purpose of accomplishing a fraud or other
Illegal act under the guise of the fiction, and
when this is made to appear the fiction will be
disregarded by the courts, and the acts of the
real parties dealt with as though no corporation
had been formed, on the ground that fraud
vitiates everything into which It enters, includ
ing the most, solemn acts of men."
This is a literal quotation from tho supreme
court of Ohio, but is supported by numerous
other authorities and approved text writers, and
is in accord with sound and settled principles
of jurisprudence.
This then is the settled law in dealing with
those who attempt to prostitute corporate laws,
forms and ideal fictions. A corporation is a
corporation, In contemplation of law, only so
long as her Incorporators Keep her within the
legal channel of corporate navigation; but the
moment they put her hull into the waters of
monopolistic piracy, she is less than nothing.
When once this wholesome doctrine Is under
stood and applied by the bench and bar of this
country, the problem of private monopoly is
solved, and the remedy apparent (on the legal
Bide) and the "failure to appreciate and apply
it has wrecked every anti-trust campaign to date.
Corporate fictions and agencies being as we
have seen, the indispensable instrumentalities
of private monopoly piracy, whether it is demon
strated that a gang of business pirates can not
use a corporation in the manner In which the
law tolerates Its use, the only thing left, or
necessary for tho stato Is to tako tho corporation
away from them, just as she takes gambling
appliances from tho gambler, or whisky from
tho illicit vendor.
It is perfectly competent for tho general
equity jurisdiction of any stato whoso people
are being oppressed by means of corporato fic
tions, created by, or operating within her ter
ritorial boundaries, to decree tho liquidation of
these fictions, and divest them immediately of
their physical holdings, by means of tho ordinary
receiverships, and at once disarm all privato
monopolies within her domain, and this upon
common law principles and irrespective of so
called anti-trust legislation, which, with tho
possible exception of their criminal features,
are but declaratory of tho common law.
These "malefactors of great wealth" who thus
persistently prostitute corporato laws, seem to
have concluded, and not without reason, that
they have indeed outgrown tho laws and tho
legal administration of the states whose laws
they prostitute, and whose poople they oppress,
and I am fully persuaded that from the moment
they become aware that tho legal department of
some central stato, upon whose corporate laws
the perpetuity of their institutions imperatively
depends, is after them in earnest (rather than
in forms for public deception) there will bo
little delay, and much less difficulty in admonish
ing them that they are at least one sizo smaller
than tho laws of their country, and that tho day
of reckoning is at hand.
This is the problem of all problems if govern
ment by, for and of the people, rather than the
private monopolist is to survive. Yours for tho
people's rule. GEORGE II. PHELPS.
WATCH IT GROW
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Megown, Mo.
A MAN PLUS $5?
How many dollars must be added to a man
to raise him to tho rank of a voting citizen?
That is the question that Rhode Island Is
struggling with. The democrats are trying to
remove the property qualification and put the
voters of the state upon a level with tho voters
of other states.
Of course, tho republicans of Rhode Island
may know tho people of the state better than
outsiders do, but outsiders are apt to assumo
that the average man in Rhode Island Is equal
to the average man in otlier states, and does
not need a plus $ sign after him to mako
him fit to vote. . '