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"You'll never come to any good without study. Now when I was your age..." I knew his history by heart, a common one in this country, although he made an honourable name instead of a dishonourable one. And when I contrast him with those of his successors whom I was to know later...! But I shall not anticipate. American genius had not then evolved the false entry method of overcapitalization.
In some method, whether by a national license law or in other fashion, we must exercise, and that at an early date, a far more complete control than at present over these great corporations a control that will among other things prevent the evils of excessive overcapitalization, and that will compel the disclosure by each big corporation of its stockholders and of its properties and business, whether owned directly or through subsidiary or affiliated corporations.
I believe that monopolies, unjust discriminations, which prevent or cripple competition, fraudulent overcapitalization, and other evils in trust organizations and practices which injuriously affect interstate trade can be prevented under the power of the Congress to "regulate commerce with foreign nations and among the several States" through regulations and requirements operating directly upon such commerce, the instrumentalities thereof, and those engaged therein.
Nevertheless grave evils had attended the process: overcapitalization was one; untruthful representations concerning the value of the properties in which business asked the public to invest was another. Such evils should be attacked; with extreme care, to be sure, but also with resolution. Combination and concentration, he thought, should be supervised and, within reasonable limits, controlled.
The transit facilities of millions of Americans had merely become the instruments of a group of speculators who had made huge personal fortunes and had left, as a monument of their labors, street railway lines whose gross overcapitalization was apparent to all and whose physical dilapidation in many cases revealed the character of their management.
Of these abuses, perhaps the chief, although by no means the only one, is overcapitalization generally itself the result of dishonest promotion because of the myriad evils it brings in its train; for such overcapitalization often means an inflation that invites business panic; it always conceals the true relation of the profit earned to the capital actually invested, and it creates a burden of interest payments which is a fertile cause of improper reduction in or limitation of wages; it damages the small investor, discourages thrift, and encourages gambling and speculation; while perhaps worst of all is the trickiness and dishonesty which it implies for harm to morals is worse than any possible harm to material interests, and the debauchery of politics and business by great dishonest corporations is far worse than any actual material evil they do the public.
I believe that monopolies, unjust discriminations, which prevent or cripple competition, fraudulent overcapitalization, and other evils in trust organizations and practices which injuriously affect interstate trade can be prevented under the power of the Congress to "regulate commerce with foreign nations and among the several States" through regulations and requirements operating directly upon such commerce, the instrumentalities thereof, and those engaged therein.
In some method, whether by a national license law or in other fashion, we must exercise, and that at an early date, a far more complete control than at present over these great corporations a control that will among other things prevent the evils of excessive overcapitalization, and that will compel the disclosure by each big corporation of its stockholders and of its properties and business, whether owned directly or through subsidiary or affiliated corporations.
To confer upon the National Government the power for which I ask would be a check upon overcapitalization and upon the clever gamblers who benefit by overcapitalization. But it alone would mean an increase in the value, an increase in the safety of the stocks and bonds of law-abiding, honestly managed railroads, and would render it far easier to market their securities.
Now, what I'd like, Andy, says I, 'would be a summer sojourn in a mountain village far from scenes of larceny, labor and overcapitalization. I'm tired, too, and a month or so of sinlessness ought to leave us in good shape to begin again to take away the white man's burdens in the fall.
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