Federal Regulation of Corporations

In the first half of his lecture on "The Federal Regulation of Corporations," yesterday, Mr. Henry L. Stimson traced the growth of the present-day monopolistic corporations, and emphasized the fact that though they are not essentially a menace to the public, there is a dividing line, often overstepped, beyond which they cease to be beneficent and become actually dangerous and harmful. That they are a necessary outgrowth of existing economic conditions is shown by the fact that they have increased in the teeth of active competition. The chief factors in this rapid growth are the limited liability of the investors in a corporation, and the tremendous power without a corresponding responsibility which lies in the hands of the directors and managers of the corporation to control prices and thus to injure competitors.

As it is economically useless to attempt to check corporate monopolies, the government should confine its efforts to ascertaining the line beyond which they become dangerous and confining them within it by stringent legislation. Inasmuch as corporations extend their ramifications over many states, they have passed beyond the scope of state control and contrary to the opinion of many people, lie naturally under the jurisdiction of the federal government.

Mr. Stimson will continue his lecture in Emerson J this afternoon at 4 o'clock, discussing the scope of present legislation and its future tendencies.