in the market. A man who manufactures and sells but two or three per cent of the products in an industry never can be sure that his business indicates the general condition of the trade, but the manager who handles sixty or seventy per cent of the products of that industry can much more safely gauge the extent of the market and the future demand. This tends to prevent an unnecessary extension of credit and an overproduction in manufacture:

Another factor of safety is to be found in the ability to enlarge the market by the extension of foreign trade and by the steadier and safer market due to the extent of the domestic sales. The larger and broader the market, the steadier and safer it is.

Again, by means of the great extent of the corporation and the placing of its securities upon the general exchanges of the country, its stock becomes distributed among a large number of holders, and has a known value and a ready market. The organization thereby becomes a distributer rather than a concentrator of wealth. Where the original owners were numbered by hundreds, the ultimate stockholders are numbered by thousands.

The control of prices, which is often apprehended, can be brought about permanently only by such a superiority in the methods of manufacture as will successfully defy competition. Any price established by a combination which enables competitors to make a reasonable profit will soon encourage such competition as will reduce the price. No permanent monopoly, not founded upon some governmental privilege in the nature of a patent or a public license or a tariff protection, can long exist, unless founded upon the superior excellence and economy in manufacture. The present combinations do not destroy competition. They, on the contrary, are themselves the creatures of competition. The fundamental cause of these combinations has been an effort for self-preservation against the evils of unrestrained competition. The wise manager of a combination, even if he has it within his power temporarily to control the prices in any industry, will not raise those prices to a point which encourages the establishment of competing plants. The economies of consolidation and a fair return upon capital invested afford a sufficient protection and encouragement to every consolidation without an attempt to control prices.

While a corporation engaged in a private business, and holding no rights or privileges by public grants, is under no obligation to disclose its business to the public generally, any more than an individual in the same business, the managers, officers,

and directors of every corporation are trustees for its stockholders, and are bound to exercise perfect good faith toward them. Any concealment from such stockholders which operates to their injury, and every advantage gained by the trustee which he appropriates to his personal gain, is a plain dereliction of duty, and should be punished by law. Stockholders should have access to the books and records of the corporation at all reasonable times, and should have the power to compel disclosure of all information necessary for the protection of their interests. All corporations which appeal to public support by placing their stocks upon the public exchanges, thus inviting investment by the public in their securities, should give the greatest degree of publicity to their affairs. If the public are invited generally to invest in the securities of a corporation, the truthfulness of all representations made should be enforced, and the same degree of publicity to which the stockholder is entitled should be extended to the public. This is founded not on any supposed right of the public to pry into the private business of people associated in the form of a corporation, but to prevent fraud and imposition upon the public in selling the stocks of corporations. This publicity should be enforced not only by the stock exchanges where these stocks are dealt in, but by public statute. If I am invited to buy the stock of a corporation, I have a right to know what assets it represents, and what its earnings and expenses are, and all the details which give light upon the value of the stock, and, having bought the stock, I have a right to know how my interest in the company is being administered by its officers and directors.

This publicity would make overcapitalization comparatively harmless. The facts which go to the question of success of the business of a corporation are those which determine whether or not it is doing its business at a profit, and whether or not it is indebted. If it is free from debt and doing business at a profit, it is immaterial, so far as the business success of the corporation is concerned, whether its stock be worth ten or a hundred, or whether it be one million or ten millions in amount. Multiplying the number of shares of a corporation does not affect its assets nor its earning power. It is difficult to understand. how an attempt to pay dividends on a large capitalization increases prices, as some claim, unless we assume that the managers of corporations with small capitalizations do not try to make as large profits as they can, and voluntarily depress prices. to their own disadvantage. We have never discovered such a charitable disposition in business, even among managers of cor

porations organized on a cash basis. It is safe to assume that everyone in business will make his profits as large as he can. Overcapitalization is a danger to the investor, rather than to the corporation or to the public dealing with the corporation. It is a kind of inflation. It amounts to a creation of fictitious stock, which affords an opportunity to impose upon the unwary investor. This is an evil wherever there is any concealment of the affairs of the corporation. Issuing a false prospectus or a false statement of a corporation ought to be punishable here, as it is in England.

R. S. TAYLOR.

Member Indiana Bar.

At the beginning of the recent remarkable movement toward large combinations in business, the organizations were in the form of trusts, properly so called. The associated corporations put their stock, with its voting power, into the hands of a trustee or trustees; and so, while the different corporations retained their separate legal existence, they became subject to a single, central control. Such arrangements are very vulnerable. They are so plainly combinations in restraint of trade that they are easily reached under the law. Hence they have been, for the most part, abandoned and replaced by great, single corporations; and these, for want of a better name, we continue, quite inappropriately, to call trusts. But it is material to note that the things with which we have to deal are corporations, lawful and regular in form and ostensible objects, and differing from the ordinary corporation only in the scale of their operations.

Legal remedies are directed against legal wrongs. The ascertainment of the wrong logically precedes the study of the remedy. What real harm, therefore, do these great corporations do or threaten to society which calls for intervention by the law?

It is manifest that we are just now in the midst of a trust craze. But that will have its day, and end probably in a crash. Many persons who are investing in the inflated stocks and bonds of these "industrials" will suffer heavily. That the law should lay some restraining hand on the formation of such organizations for the protection of investors is very obvious and very easy to say.

But the interest of investors in the shares of such enterprises is a small consideration beside the interest of the general mass of the people whose food, clothing, and transportation are controlled by them. Nothing can be more certain than that the