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Evening star. [volume] (Washington, D.C.) 1854-1972, January 04, 1938, Image 12

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O’Mahoney Cites Need to
Control to Preserve Free
The following address on ways <
curbing trusts and monopolies was d«
livered last night by Senator Joseph <
O'Mahoney, Democrat, of Wyomini
speaking on the National Radio Fc
rum, arranged by The Star and broad
cast over a Nation-wide network c
the National Broadcasting Co.:
For more than 150 years the Ameri
ean ideal has been a system of fre
Individual enterprise in a competitiv
market. Every man was entitled t
the rewards he could win in a fai
field without favor. To protect hir
In this right, the Constitution and th
laws were so drafted as to shield hirr
on the one hand from too much go\
emment interference and on th
Other from private interference b
those who would, by unfair devici
deprive him of his opportunity.
That is still the American ideal, bu
we have come to such a pass that nin
years after the worst depression i:
history, after the expenditure of bil
lions of dollars borrowed on publi
credit, we are told by a Governmen
•gent, who was specially appointe
to find out, that there are in th
United States between 7,000,000 an
i 1,000.000 persons, anxious and willin
to work, who are without employmeni
This is a condition which threaten
the very survival of the America:
Ideal. It calls for something mor
than epithets. It calls for sober think
ing, patriotic co-operation and vig
orous action. More than anythin
else. It calls for a restoration of pub
Me confidence in the good will an
honest purpose of both our politics
•nd commercial leaders.
Fecause, with Senator Borah of Ida
ho, I have offered a bill assertin
Federal authority to define the powe
and the public responsibilities of a
corporations engaged in inters tat
commerce, I must make it perfectl
clear at the outset that the purpose c
this bill is not to increase but to de
crease Government interference in pri
vale business, not to restrict businef
but to set it free.
* Some Form of Law Needed.
L, Strange as I know it sounds to man
•ars. I have no hesitation whatever i
Isserting that the American ideal c
free, independent private enterpris
eannot endure without some form c
I Federal incorporation law. Unle<
this principle is adopted it will be dii
ffcult, if not impossible, to avoid som
sort of a collectivist state. The exper
enee of the whole world teaches thi
lesson and we shall be blind Indeed t
what is going on about us if we fa
to heed it.
rThe central fact which, in the fac
of warnings by eminent and thought
ful leaders, we have ignored for full
80 years is that the modern corpora
tion is itself a collectivist state—
sort of absolute government whic
Intervenes between the i eople an
their historic institutions, a governmei
which is not responsive to the ideal
of democratic control, which is nc
conscious of public responsibility, bt
which is unable of itself to solve th
problems to which its very exlstem
gives rise.
Let me mention a single example
the American Telephone * Telegrap
Co.—because it is known to every on<
Is generally believed to be well an
honestly managed and has not bee
Involved in any of the recent emotioni
controversies. Most people think c
this as a private enterprise, but is it
What private person owns it? It
owners are its stockholders, numberin
In excess of 640,000 persons, more thai
there are inhabitants in several State!
Jf we were to add to the number c
•toekholders the number of employe!
we would have an economic state, th
population of which is exceeded b
that of only four cities in the whol
United States.
The American Telephone & Tele
graph Co. bears a more vital and inti
nate relationship to all of the peopl
•f the country than any single Stat
government. It is national in it
•eope. It collects its revenue froc
•very community in the land. Yet i
came into existence to do business i
Interstate commerce, the regulation o
Which was committed to the Federa
Government by the Constitution, with
out ao much as saying "by your leave
Ip that Government.”
Creature of Government.
■ Precisely here is the point whicl
Os a people we have persisted in mis
understanding. Precisely here is th
point which has been the cause o
Jnost of our economic ills. We seer
unable to get away from the Idea tha
Corporations, no matter what thei
•1ze, should be judged by the sam
■tandards and clothed with the sam
fight as natural fleeh-and-bloo
persons. What natural flesh-and-bloo
person in his own right and in his owi
name could span the country with
communication system like that of th
American Telephone & Telegraph Co.
Again let me say that I cite this par
ticular organization without th
slightest thought of criticism or hos
tility. I am merely trying to illustrat
in the clearest way I can th differenc
between a corporation and a person.
The corporation is a mere creatur
of Government, but Governments ar
made by people. The natural persoi
if we are to believe the Declaratio:
Of Independence, has certain inalien
able rights, that is to say, rights tha
even government cannot take awa:
gut corporations, to quote ianguag
once used by the Supreme Cour
“have no rights, but only privileges.
3§ other words, they have only tho*
powers which are given to them fc
Government on behalf of the people,
Every corporation is called into e>
lute nee by a contract between son
government and the natural person
who, to escape personal liability and t
acquire capital from the public, war
the privilege of doing business in tt
corporate form. My contention
that the public interest requires thi
the terms of the contract by whic
every corporation engaging in intei
state and foreign commerce is calle
into existence should be laid doe
by the Federal Government. I sa
this because without it we cannot poi
sibly achieve certainty and stabilii
in national commerce. I say it b<
cause the history of the last 50 yea:
proves beyond any poesibility of dou
that every salutary rule for the prei
ervation erf competition, tor the pr<
tection of free, independent priva
enterprise has been and can be evad<
so long as the States are permitted
issue unlimited charters to intersta
Plan of Leaders of Past.
I can say without immodesty thi
this is the most important bill thi
has been presented to Congrees in !
years—because I did not originate I
The idea is not mine nor is it Senati
Borah’s. It has been advocated 1
many men who have gone before u
As long ago as December 8, 1888, 1
Speaks in Forum
“ a message to Congress, Presiden
1 Grover Cleveland declared that “cor
* poratlons should be the carefully re
! strained creatures of the law.”
f Later, in 1905, President Theodor
’ Roosevelt, speaking to Congress, de
dared, “The fortunes amassed througl
1 corporate organizations are now »
6 large, and vest such power in thos
1 that wield them, that it makes it i
‘ matter of necessity to give to the sov
£ ereign—that is, to the Governmenl
: which represents the people as a whol
1 —some effective power of supervisioi
* over their corporative use * • *. Sucl
1 regulation and supervision can onl;
? be effectively exercised by a sovereigi
' w'hose Jurisdiction is co-extensive wit]
s the Held of w»ork of corporations
* that is, by the National Government.
5 . Later, President William Howar
TafLonce sent a Federal incorporatioi
bill to Congress with a special mes
s sage. And in 1919, President Woodroi
‘ Wilson specifically declared:
“We should formulate a law requir
1 ing a Federal license of all corpora
tions engaged in interstate commerc
' and embodying in the license, or ii
* the conditions under which it is t
j be issued, specific regulations deslgnei
to secure competitive selling and pre
e vent unconscionable profits in th
J methods of marketing."
‘ These and similar recommendation
have never been followed, not onl
" because some States chiefly concerne
in the revenue to be derived from issu
ing irresponsible charters have resiste
it, but because individual business me:
V have been led to believe that their in
1 terests are identical with the interest
f of big corporations. Moreover, the be
e lief has been entertained by the man
f agers of both big and little corpora
* tions as well as by persons doin
- business as individuals, that a Federa
e incorporation law would mean mor
- centralization of government and con
s sequently more bureaucratic interfer
s ence with the free, independent, pri
1 vate enterprise. Both of these ideas ai
in error.
Big Corporation* Dominant.
y let us first discuss the relative posi
. tions of the big and little corporation!
! Within the past year the Twentietl
1 Century Fund, Inc., a foundation ere
j ated by a group of wealthy individual
[t for the purpose of studying present
s day economic conditions, published ;
^ small book entitled “Big Business, It
t Growth and Its Place."
e Among the amazing facts reveale
f in this book was that in 1933 all th
corporations in the United States wit:
assets of less than $50,000 each, thougl
1 in number they constituted 47 per cen
, or almost half of all profitable cor
j porations. received less than 2>2 pe
1 cent of the total Income.
I On the basis of property owne
f rather than of taxable income, th
, record was even more surprising
5 There were 211,586 corporations wit]
assets of less than $50,000 each. Thes
j constituted 54 per cent of all the cor
porations. But all their assets com
| bined amounted to only 1.4 per cen
of all corporate assets.
| That was one end of the scale. A
' the other end the 594 largest corpora
, tions constituting less than one-fourtl
of 1 per cent (0.15 per cent to b
exact) of the total number owne
‘ approximately 53 per cent of all th
’ assets. In other words, we find th
' position of the big corporations am
' the little corporations almost exact!
j reversed. The big fellows constitute
. less than 1 per cent of the numbe
owned more than half of the asset
^ and the little fellows, constituting 5
per cent of the number, owned scarce!
| 1 per cent of the assets.
‘ Who is going to contend that thi
is a healthy situation for free, lnde
pendent, private enterprise? Who i
going to contend that the interest o
i the little fellows Is identical with tha
■ of the big fellows?
! ®g Corporations Grow.
It is no answer to say that the own
ership of the big corporations is dis
c tributed among 10,000,000 or 12,000,00
[ stockholders. Most of them owi
‘ amounts that are insignificant. A1
- most none of them exercise any influ
? ence in the management, and evei
large owners, in contest* with manage
| ment. sometimes find it difficult t
have their own way. Thai* figure
only prove the point I made a littl
while ago that the huge corporation
are in fact collectivist economic state!
For the purposes of this discussion
we may admit that they are efficient
we may acknowledge the integrity am
good faith of their management, bu
when all is said and done, they are no
private enterprises. Hiey are publl
enterprises with which free, independ
ent, private enterprise cannot hope t<
Year by year they have grown ii
magnitude and importance. Year b;
year they have absorbed competition
Year by year their influence has ex
panded from ocean to ocean and acros
the sea. Some of them are not onl;
richer and more powerful than man;
of the States in the Federal Union
but than many of the nations on thi
Let no one interpret what I say a
an attack on business. It is not. It 1
merely an analysis of a conditioi
which must be understood if we an
even to make a beginning in the solu
tion of our present dilemma. Let m
assert here my own personal belie
that most of the executives of al
t these corporations are men of gooi
. will. In practically every one of then
. you will find the positions of author
ity filled, for the most part, by mei
, who fought their way up from th
” bottom without the aid of money o
, family. I rejoice in their success
5 I’m proud of their achievement.
, will not question their honor or thei
[ patriotism. But that does not blim
. me to the fact that the corporation
they represent dominate the economli
life of the people of America. I be
[ lieve that these agencies and the hun
, dreds of thousands of small corpora
t tions which receive only IVa per cen
, of all corporate income can be madi
, the instrumentalities by which pros
. perity may be achieved for all our peo
» pie. But this I know, the only wa;
i by which that may be accomplishe<
( is by means of a Federal incorporate
. law. Neither the big corporations no
, the little ones can thrive while 8.000,
000 to 12.000,000 persons are unem
. ployed. Every business executive re
, allies now that increased prosperit;
, depends upon Increased consumption
i which in turn depends upon increase!
, purchasing power among the masses
1 We know now that this purchasini
. power cannot be built up bv Govern
, ment deficit-spending. There is onl;
one way to do it, and that is by stlmu
, lating free, independent, private en
j terprise.
j Federal Law la Needed.
The first step in this direction i
i the adoption of a national law whicl
t will allow the Federal Government
• which has the duty of regulating in
i terstate commerce, rather than th
■ State government from which tha
■ power was withdrawn, to write th
■ contracts which define the power*
? duties and responsibilities of inter
1 state corporations.
- But some one says such a law wouli
■ increase the power of the Federal bu
- reaucracy and Increase Govemmen
■ meddling in private business. I
e would do nothing of the sort. Th
law I have in mind, like the law rec
ommended by Woodrow Wilson, wouli
not clothe any Government function
ary with discretionary power. Withii
the four corners of the law would b
set forth clearly just what was re
quired of the corporation. Its virtu
would lie not in any new authorit;
granted to Government agents but li
g closing the avenue—the loose Stat
charter—by which public responsibil
j lty has been evaded in the past. I
, has been the lack of such a law tha
, has caused the expansion of bureau
} cracy. Because a few States hav
t been willing to issue blanket charter
by which the prohibitions of the Fed
’ eral anti-trust laws could be avoided
Congress has been forced to creat
j the vast establishment which not
, overcrowds the city of Washingto
Obviously if corporations did not hav
the corporate power to commit th
abuses which have caused the peopl
to complain, it would not be necessar;
to appoint an army of supervisory am
[ prosecuting agents to keep them it
j. * A national incorporation law ma
be drafted which can be as easil
, enforced as the National Banking Acl
, There was a time when there were n
j national banks. All such institution
, were created by the State government*
, But when national commerce ha
j grown to such a point and the nation*
r interest was such that it seemed neces
. sary, the National Banking Act wa
r passed. Who will now say that tha
s act was not a proper and normal resul
t of the growth of the country?
j Corporations Dominate Field.
The same situation exists now witl
1 respect to commerce and Industr
■ Fully 57 per cent of the entire na
1 tional income is produced by corpora
( tlons. The significance of this fac
t will be better realized when it is re
numbered that 94 peP cent of all agri
cultural activity is non-corporate 1
- character. The corporation dominate
- the field in finance, trade, transports
) tion, public utility, manufacturing an
l mining. The developments of scienc
- have been such, improving the mean
- of transportation and communicatior
l that State lines have practically cease
• to exist commercially. Corporation
> created in one State do business 1
i the others—indeed, they are createi
! for the express purpose of engagin
i in interstate and foreign commerce
Yet the Federal Government has no
, even attempted to prescribe the power
, and duties of the most Important agen
i cy of the commerce that was com
; mitted to its care.
If such a law were passed it woul<
: almost automatically put an end t
• the necessity for Federal legislatloi
> attempting to control the business ac
tlvity of the natural person. Because
i hitherto, we have not discriminate!
r between natural persons and corporat
. persons, we have attempted to regu
late the latter by laws which als
i apply to the former. I would elevat
r the natural person to his proper posi
r tion of superiority over the artiflcii
, agency created by the 8tate.
Major Principles of Bill.
There are three principal feature
i of the bill:
i First and most Important, the asser
i tion of the Federal authority over th
* form and character of interstate cor
■ porations.
> Second, the requirements that Fed
f eral corporations shall not emplo;
I child labor, shall not dlscriminat
l against women and shall recognize th
i right of labor to bargain collectivelj
■ Third, the direction to the Feders
L ~~
1 Trade Commission to call Immediately
t a national industrial conference ii
. which capital and labor and consume
t shall be represented to recommend i
> stabilisation plan to Congress.
This is scarcely less important that
the first. Our Nation is in as grea
need today of an economic constitu
‘ tion as it was of a political constltutloi
' in 1787, and I know of no better way
' to secure one than under the forma
supervision of a non-political agency
| like the trade commission.
» The alternative to this program 1
. state collectivism to this program i
j another. There are not wanting ad
s vocates of the totalitarian state wh
. will resist this proposal because the;
1 want to hasten the coming of an all
powerful authoritarian government
They will tell you that private enter
• prise is a failure, that competition wii
not work, that it necessarily gives way
■ to private monopoly under privati
6 ownership and that that in turn wi
■ necessarily give way and ought to giv
way to public monopoly under publi
. ownership. But monopoly, whethe
f private or public, is the negation o
» freedom and freedom is still the Amer
i lean ideal. Private monopoly can de
. velop only through the use of thi
1 corporation. And if America will only
’ limit the exercise of corporate poweri
i the people of this country may remail
' free without either private or publii
: masters.
I Br the Associated Praia,
r PORT DEPOSIT, Md., Jan. 4 —Ex
elusive Tome Institute's two-day stu
dent strike, called by the school's 18
1 boys a month ago in protest agaliu
1 dismissal of Tome's headmaster, re
' suited yesterday in his reinstatemen
} Ralph S. Williams, New York bust
' ness man and member of the board c
' trustees, announced last night after
■ special board meeting that:
Headmaster Charles J. Keppel'
1 ouster had been unan.mously re
' scinded.
■ The board had Indorsed his admin
1 istration.
s No effort would be spared to se
s that the students, on their return froi
' the holidays, "find themselves in
J completely harmonious atmosphere.”
The board would vote immediate!
■ the appropriation necessary for “
s competent survey” of "every phase t
r the present school status.”
_ I —
Housebreaking and Receivinj
Stolen Property Are Charged
to Seven.
A series of housebreaking cases ove
) a period of several months resulted 1:
t, the arraignment of five colored youth
. and two colored girls yesterday befor
, Police Court Judge Hobart Newman.
i Benny Witherspoon, John Lewis an
I John King, all 19, were held for gran
, Jury action under $10,000 bond eac
on charges of housebreaking. E
j Connor, also 19, and Fannie an
. Minnie Connor, 17 and 18, respectivel;
who were charged with receivin
. stolen property, were held for th
grand Jury under $5,000 bond each,
e The other youth—Richard Knigh
i 20—demanded a jury trial on tw
s charges of attempted housebreakir
in connection with the same cases. A
y the prisoners pleaded not guilty,
s Police said two juveniles also wei
f arrested with the other seven. The:
cases will come up In Jnvenlle Cour
The gang, operating from a house
in the 2100 block of L street N.W.,
, confined Its activities largely to Sani
tary Grocery Stores, but also Included
some exclusive Connecticut avenue
shops, according to police. One theft
, is said to have Involved $800 worth
' of clothing.
[ Former Archbishop of Rouen
b Clashed With Pope.
e NICE, France, Jan. 4 <4>).—Msgr.
. Andre du Bois de la Vlllerabel, titular
Archbishop of Melitene. who was re
moved as Archbishop of Rouen In 1938
. after a bitter clash with the Vatican,
“ died here yesterday at. the age of 73.
al The archbishop will be buried at
• Rouen after religious services at Nice
I tomorrow.
e _
In the spring of 1936 Msgr. de la
t, Vlllerabel, then Archbishop of Rouen,
o carried charges of financial irreg
g ularitles against Msgr. Rene Bertin,
II the vicar general, to a French Civil
Court Instead of to church authorities.
e To discipline him the Vatican de
r posed him and Pope Pius rejected his
personal appeal for reinstatement.
This young
man is a lot
than many
You MO there it nothing the professor con do about hair gona
for good. It'* like your eyesight, just can't ba replaced, but
hundreds af young men will toll you that thay have fine, healthy
growths of hair because they came to me in time. If you are
tha least in doubt about your hair, COME IN NOW!
A Consultation Costs You Nothing and
Doesn't Obligate You in Any Way
Every cose of falling hair is slightly different. The follicle an
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understanding of hair growth cara. 3rd, The wrong treatment.
I accept no cases if my examination reveals that my treatment
would ba of no bonofit. Coma in new far a consultation.
F. D. Johnson
Scalp Specialist
1050-53 Shorgham Bldg., 15th and H Phong NA. 6081
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