while the states could not issue money, they could create a corporation and give it the power to issue money (not making it a legal tender),1 and straightway we had as bad a currency as ever afflicted a suffering people. Congress had the power to coin money and regulate the value thereof,2 but had failed to establish a sufficient and uniform currency. So far as the currency could be said to be regulated, at all, it was practically relegated to the private interests of 1600 "Wild cat banks," created in the several states, with an infinite variety of special powers, under charters largely "based on ignorance, intrigue, favoritism, or corruption," without uniformity of creation, management, operation, liability, responsibility, or regulation, and issuing 10,000 different kinds of notes. So far as a national currency is concerned there was no adequate provision for one until the National banking act3 was passed, and no uniform one until the state bank issues were taxed out of existence in 1865. 2. Concentration of control. Our commercial condition is, similarly, an unregulated corporate regulation, with the addition that the control of the main forces and instruments of commerce is now vested or centered in a few state created corporations that have become federal in operation, federated in organization, and imperial in power.

General Garfield thus characterized the situation thirty years ago:

"The vast railroad and telegraph systems have virtually passed from the control of the States. . . . The efforts of the States to regulate their railroads have amounted to but little more than feeble annoyance. In many cases the corporations have treated such efforts as impertinent intermeddling. In these contests the corporations have become conscious of their strength, and have entered upon the work of controlling the states."'4

If this was true in 1873, how much more cause for concern, and need of adequate regulation, are there arising from the development since? Prior to 1870, scarcely any railroad system was over 1000 miles in length,-consolidation and effective pooling had only fairly begun; between 1870 and 1890, railroad systems were formed controlling 5000 miles; between 1890 and 1898, single systems of 10000 miles or over were formed, and now the five principal systems aggregate nearly 150,000 of the total 200,000 miles of railroad in this country. In 1900 one-fourth of all the railroad shares were

1 Briscoe v. Bank, 11 Pet. 257.

2 Art. I, Sec. VIII. cl. 5.

3 Acts, Feby. 25, 1863, and June 3, 1864.

4 The Future of the Republic, J. A. Garfield. 2 Works, p. 61.

held by other railroad companies, and undoubtedly this has greatly increased since. A late authority says that 19 railroad systems, practically controlled by nine men closely associated in various. ways, operate 165,321 miles, or nearly 81 per cent of all the railroad mileage in the country.1

Concentration in the industrial and financial fields has been even more rapid. It has been stated that between 1860 and 1870 only two "industrial trusts" formed by combination of formerly competing concerns, were created with a total capitalization of $13,000,000; between 1870 and 1880, four more were formed with $135,000,000 nominal capital; between 1880 and 1890, eighteen more were formed with $228,000,000; and according to the last census there were then 183 combinations with a capitalization of $3,619,C39,200; in 1902, there were said to be 213 combinations, with nearly $7,000,000,000 capitalization, while a later authority says there are 850 industrial combinations not including railroad mergers, with a nominal capitalization of $9,000,000,000. These vast sums are not the most important point; the concentration of control is still more important. This has already been noted as to railroads. It has been said:— "The property which the Amalgamated Copper Company now controls was once perhaps a thousand mining claims. . It is estimated that the Standard Oil Company has taken, by contract or by force the business of ten thousand corporations and merchants in all parts of the Union."'2

The estimated wealth of the United States, according to the census of 1900, was $94,300,000.000. The control of a sum nominally equal to one-twelfth of this is represented by the 24 directors of the United States Steel Corporation; they are, also, the influential directors in more than 200 companies that operate half the railroad mileage of the country; dig and carry the iron and coal; control the greatest oil, copper, sleeping car, telegraph, express, agricultural implement, bridge, traction and shipping interests in the country; also the five greatest insurance companies, nine of the greatest banks, and sixteen of the largest trust companies with their large chains of affiliated banks and trust companies, throughout the country. This group of men controls corporations with a nominal capitalization of $9,000,000,000; and of the 24, two, Mr. Morgan and Mr. Rockefeller, are said virtually to control eight out of the nine billions.3

1 S. S. Pratt, in World's Work, Dec. 1903, p. 4262.

Report of Com. on Commercial Law, Am. Bar. Assn. 1903, p. 6; Am. Law. Rev. Nov.-Dec. 1903. p. 828.

3 See Article in World's Work for Dec. 1903, Who owns the United States?

3. Extent of operations. Not only is concentration of control important, but the extent of operations is of great significance. The Standard Oil wagon is seen in nearly every city, village, and hamlet in the land, and its operations extend around the world. The 213 or more separate plants of the United States Steel Corporation are located and operated in nearly half the states, and its trade invades the markets of the world. And so with many others. As Mr. Dill says:

"The trusts today are a force and power national in extent. National in extent in that their business not only extends throughout all of the original and acquired territory of this country, but is rapidly over leaping the boundaries of our States and possessions, entering into foreign countries and making rapid inroads into foreign markets; and national in extent also in that their financial roots extend down and into every commonwealth and municipality of this country.""

4. Form of organization. The great aggregation of wealth represented, the extraordinary concentration of its control, and the vast extent of the operation, are not more material than is the affiliated and federated form of organization. Through the interholdings of corporation shares, interests of the greatest diversity are held and controlled in harmony; and through the method of the holding corporation is susceptible of unlimited extent, concentration, and duration. There are now not only combinations of combinations, but corporations of corporations, joined in a federal union, that can act with the speed, the certainty, the vigor, and the effect of a monarchy, and under the laws of many states where they are or may be formed, with less responsibility to their constituents and to the public than any constitutional monarch in the world. The order of the Standard Oil Co., or of the United States Steel Corporation, and of many others, as to the prices of their products or of the raw material they use, act with a directness and rapidity greater and affect a larger territory in a shorter time, and without warning, than the act of any legislature in the world.

5. Laxity of state laws. Under present laws in several states the directors may provide, in the organization of the corporation, for no effective control over their acts, liabilities, or operations by the members, and the laws of such states provide no public control of consequence outside of taxation. Most of these great corporations have been organized under the same laws as the United States Shipbuilding Co., or laws not even as strict as they are, and allow of

1 Address, National Incorp. Laws for Trusts, Harv. Univ. March 1902.

the same unbridled effrontery, speculation, peculation, and fraudulent promotion that seem to have taken place there, and without certain and adequate remedy to the sufferers. The shares of corporations organized under the same laws, and with no more protection, are widely scattered over the land, and if like transactions have not occurred, or do not occur, in many other cases it will not be because the laws are adequate to prevent them. As a hotel man recently said in New York the shares are insecurities rather than anything else, and many a one finds himself in the same predicament as he, "I have made my pile, and it is safely invested in Steel Common, Amalgamated Copper, and Shipbuilding securities, and nobody can take it away from me,'-or wont.

6. Diversity of state laws. The great diversity of state laws under which corporations may be formed, confuse the investor, and often mislead him to believe there is safety where there is none. The vast variety of these laws, and in many cases the uncertainty of their provisions, make a jungle of confusion wherein the dishonest promoter or manager finds safety.

Aside from this, many states, by liberalizing their laws, so as to induce corporations to incorporate within their borders, for the revenue derived from the fees, have made it possible to get a charter where there is

"No franchise tax; no limit on capitalization; no amount of stock required to be subscribed; no state control, no examination of books; stock non-assessable; keep office any where; do business any where."

Some of the states make a business of spawning spurious corporations to infest other states, than the one in which they are incorporated, with their nefarious practices and progeny.

7. Methods used to build up trusts. The methods whereby these institutions have been built up must also be considered. From the investigations of our various commissions during the past twenty years it has been made certain that the particular devices used in most cases, which have brought the problem before us in the condition above pointed out, have been mainly four: (1) The acquisition, practically, of monopoly power either by grant of franchises of various kinds, or through discrimination in transportation charges; (2) The destruction of legitimate competition by the predatory competition of the holders of monopoly power; (3) The overcapitalization of corporations; and (4) Dishonest and irresponsible corporate promotion and management. The first three have been usual, and the last not infrequent. The first three have hardly been unequi

vocally denied, and the 2d and 3d generally defended as justifiable, by those benefiting by them. There is, however, almost no doubt that the first two destroy the independent and honorable business of vast numbers of honorable and competent business men. Of course it is also said that the consumer is benefited by lower prices; but such statements are not generally believed or found to be correct. That illuminating oil goes up, and crude goes down, in price, -and dividends get larger, is not an unusual experience. The first three make, or give the power to make, all consumers pay tribute into the coffers of those whose will fixes the price as their interes dictates; and the last two enable the unscrupulous to shear the lambs, and if greatly successful in these various and devious ways are frequently looked upon as economically righteous.

8. Effect, or the danger threatened. Judge Walton of the Supreme Judicial Court of Maine has pertinently observed that:

"Men are mortal, and their combinations short lived, but corporations are immortal and their combinations and acquisitions may go on forever; they may add field to field, wealth to wealth, and power to power, till they become too strong for the government itself; all experience shows that such accumulations of wealth and power are dangerous to the public welfare."'1

Any person, with no inclination to see imaginary dangers, is, nevertheless, instinctively led, or reluctantly driven, to ask if we are approaching the condition of universal monopoly of which Fourier wrote nearly one hundred years ago:

"The organization of the commercial classes into federal companies, or affiliated monopolies. . will reduce the middle and laboring classes to a state of commercial vassalage. . And we shall see the reappearance of feudalism.”

Without in the least forgetting the value of corporate organizations, and their necessity in our business life; without denying there can be great benefit derived from the nationalization rather than the localization of our industries; and admitting that concentration of control and management may result in great savings in production and distribution, and believing that if all these are honestly and honorably done, they may be made to promote the general welfare, yet, if our diagnosis is correct, the fact remains, that the National Government does not, the states cannot, and the corporations do, control our industries, but not "in order to promote the general welfare." As was said in the Addyston Steel Co. case, private contracts between such corporations "may in truth

1 Brunswick G. L. Co. v. United Gas Co., 85 Me. 532, 35 Am. St. R. 385, 387 (1893).