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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Dec. 8, 1911)
" yrrrfl rqpraX&FW -vryvwit T , -T- JMI DECEMBER 8, 1911 The Commoner. methods for stifling competition and effecting monopoly, should be described with Buffiicent accuracy in a criminal statute on the one hand to enable the government to shorten its task by prosecuting single mis demeanors instead of an entire con spiracy, and, on the other hand, to serve the purpose of pointing out more in detail to the business com munity what must be avoided. Federal Incorporation Recommended In a special message to congress on January 7, 1910, I ventured to point out the disturbance to busi ness that would probably attend the dissolution of these offending trusts. I said: "But such an investigation and possible prosecution of corporations whose prosperity or destruction affects the comfort not only of stock holders but of millions of wage earn ers, employees, and associated trades men must necessarily tend to disturb the confidence of the business com munity, to dry up the now flowing sources of capital from its places of hoarding, and produce a halt in our present prosperity that will cause suffering and strained circumstances among the innocent many for the faults of the guilty few. The ques tion which I wish in this message to bring clearly to the consideration and discussion of congress is whether, in order to avoid such a possible business danger, something can not be done by which these busi ness combinations may be offered a means, without great financial dis turbance, of changing the character, .organization, and extent of their business into one within the lines of the . law under federal control and supervision, securing compliance with the anti-trust statute. 4 "Generally, in the industrial com binations called 'trusts,' the princi pal business is the salo of goods in many states and in foreign markets; in other words, tno interstate and foreign business far exceeds the busi ness done in any one state. This fact will justify the federal govern ment in granting a federal charter to such a combination to make and sell in interstate and foreign com merce the products of useful manu facture under such limitations as will secure a compliance with the anti-trust law. It is possible so to frame a statute that while it offers protection to a federal company against narmful, vexatious, and un necessary invasion by the states, it shall subject it to reasonable taxa tion and control by the states with respect to its purely local business. "Corporations organized under this act should be prohibited from acquir ing and holding stock in other cor porations (except for special reasons, upon approval by the proper federal authority), thus avoiding the crea tion under national auspices of the holding company with subordinate corporations in different states, which has been such an effective agency in the creation of the great trusts ana monopolies. ..,. "If the prohibition of the anti-trust act against combinations in restraint of trade is to be effectively enforced, it is essential that the national gov ernment shall provide for the creation of national corporations to carry on a legitimate business throughout the United States. The conflicting laws of the different states of the union with respect to foreign corporations make it difficult, if not impossible, for one corporation to comply with their requirements so as to carry on busi ness in a number of different states " I renew the recommendation or tne enactment of a general law providing for the voluntary formation of cor porations to engage in trade and commerce among the states and with foreign nations. Every argument which was then advanced for such a law, and every explanation which 11 was at that time offered to possible objections, have been conflrmod by our experience since the enforcement of the anti-trust statute has resulted in the actual dissolution of active commercial organizations. It is oven more manifest now than it was then that the denunciation of conspiracies in restraint of trade should not and does not mean the denial of organizations largo enough to bo intrusted with our interstate and foreign trade. It has been made more clear now than it was -hen that a purely negative statute like the anti-truBt law may well bo supple mented by specific provisions for the building up and regulation of legiti mate national and foreign commerce. Government Administrative Experts Needed to Aid Courts in Trust Dissolutions The -drafting of the decrees in the dissolution of the present trusts, with a view to their reorganization into legitimate corporations, has made it especially apparent that the courts are not provided with the adminis trative machinery to make the neces sary inquiries preparatory to re organization, or to pursue such in quiries, and they should be em powered to invoke the aid of the bureau of corporations in determin ing the suitable reorganization of disintegrated parts. The circuit court and the attorney general were great ly aided in framing the decree in tho Tobacco trust dissolution by an ex pert from the bureau of corporations. Federal Corporation Commission I'roposeu I do not set forth in detail tho terms and sections of a statute which' might supply the constructive legis lation permitting and aiding the for mation of combinations of capital into federal corporations. They should be subject to rigid rules as to their organization and procedure, in cluding effective publicity, and to tho closest supervision as to tho issue of stock and bonds by an executive bureau or commission in the depart ment of commerce and labor, to wfilnli in Hmnc: of dnilM t.hfiV mlcht well submit their proposed plans for future business. It must be dis tinctly understood that incorpora tion under a federal law could not exempt the company thus formed and its incorporators and managers from prosecution under the anti-trust law for subsequent Illegal conduct, but the publicity of its procedure and tho opportunity for frequent consul tation with the bureau or commis sion in charge of the incorporation as to the legitimate purpose of its transactions would offer it as great security against successful prosecu tions for violations of the law as would be practical or wise. Such a bureau or commission might well bo invested also with tho duty already referred to, of aiding courts In tho dissolution and re-cre- -.!-. ni fxiiofa wlfMn th law. It should be an executive tribunal or the dignity and power of the comp troller of the currency or the Inter state commerce commission, which now exercise supervisory power over important classes of corporations under federal regulation. The drafting of such a federal In corporation law would offer ample opportunity to prevent .many mani fest evils in corporate management today, including irresponsibility of control in the hands of the few who are not the real owners. Incorporation Voluntary I recommend that the federal charters thus to be granted shall be voluntary, at least- unti experience justifies mandatory provisions. The benefit to be derived from the opera tion of great business under the pro tection of such a charter would at tract all who are anxious to keep within the lines of the law. Other largo combinations that fail to tako advantagoof tho federal Incorporation will not have a right to complain If their failure Is ascribed to unwilling ness to submit their transactions to the careful official scrutiny, compe tent supervision and publicity atton- dant upon tho enjoyment of such a charter. Only Supplemental Legislation Needed Tho opportunity thus suggested for federal Incorporation, it seems to mo, is suitablo constructive legis lation neodod to facilitate tho squar ing of groat industrial enterprises to tho rule of action laid down by tho anti-trust law. This statute as con strued by tho supromo court must continuo to bo the lino of distinction for legitimate business. It must ho enforced, unless wo are to banish In dividualism from all business and re duce it to one common system of rogulation or control of prices like that which now prevails with respoct to public utilities, and which when applied to all business would be a long stop toward state socialism. Importance of tho Anti-Trust Act Tho anti-trust act i3 the expression of tho effort of a freedom-loving people to preserve equality of oppor tunity. It is tho result of the con fident determination of such a people to maintain their future growth by preserving uncontrolled and unre stricted tho enterprise of tho indi vidual, his Industry, his ingenuity, his intelligence, and his independent courage. For twenty years or more this statute has been upon the statute book. All know its general purpose and approved. Many of its violators were cynical over its assumed impo tence. It seemed Impossible of en forcement. Slowly the mills of tho courts ground, and only gradually did tho majesty of tho law assert itself. Many of its statosmon-authors died before it became a living force, and they and others saw tho evil grow which they had hoped to destroy. Now Its efllcacy Is seen; now its power is heavy; now its object is near achievement. Now we hoar tho call for Its repeal on tho plea that it interferes with business pros perity, and wo are advised in most general terms, how by some other statute and in some other way the evil we are just stamping out can bo cured, if wo only abandon this work of twenty years and try another ex periment for another term of years. It is said that the act has not done good. Can this be said in the faco of the effect of the Northern Securi; ties decree? That decree was in no way so drastic or Inhlbitlve In detail as either the Standard Oil decree or the Tobacco decree; but did It not stop for all time the then powerful movement toward tho control of all the railroads of the country in a single hand? Such a one-man power could not have been a healthful In fluence In the republic, even though exercised under the general super vision of an interstate commission. Do we desire to make such ruthless combinations and monopolies lawful? When all energies are directed, not toward tho reduction of the cost of production for the public benefit by a healthful competition, but toward new ways and means for making per roanent in a few hands the absolute control cf the conditions and prices prevailing in tho whole field of indus try, then individual enterprise and effort will be paralyzed and the spirit of commercial freedom will be dead. WILLIAM H. TAFT. White House, December 5, 1911. ' UGRrrrtct yry ...C0ME 8cu TO AMEfl'CA'S market nutDEMS. Ctkheat Soq. Siatt j tmen4 br J. a. 1 a v. FHOM THE PEANUT FIELDS OF VIRGINIA IU IH6 OKAKOE DROVES OF FLORIDA Raffle Fruit and Vegetable! for Bljt Profit. H-ilthfol climate fettllo toil-plenty 0I atei pilicj lowcny xtmu kboeli aaJ cbmcbn Qui k ttjiMjVMUlloji to Mr maikc-u. Neat town. In Manatco Counly on tho West Coal of nunuH ra i io 3 ciopi a year net $500 10 aiiwv per ar ie. wiila NOW lot IWaf uaud Booklet. J. A. PRIDE, Gen. Ind. 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