Judge Grosscup On Trusts

Judge P. S. Grosscup, the eminent jurist of Chicago, lectured Saturday in the Good Government Club course to a very fair audience. In his opening remarks he said that he came, not to entertain, but to deliver a message. His message, he remarked, was upon the trust question.

In the course of hls lecture he said: "The pre-eminence of Washington, of Lincoln, of McKinley, was due to the fact that upon one thing was concentrated their conscience, convictions, and their efforts. And it is characteristic of the American people as a body that they will do but one thing at a time. The trust question will soon demand imperatively the undivided attention of the public.

"The tendency in labor in modern civilization has been from the simple toward the complex. This is shown by the extended division of labor now where before the same article was begun and finished by one man. On the other hand the tendency in proprietorship has been from the complex to the simple, from diffused to concentrated ownership. Consolidated companies have been organized and proprietorship reduced in extent. Consolidated companies are capitalized, not on basis of actual property value, but upon earning value. Consolidation is not to be objected to because it is consolidation, nor because it makes men rich. But it is to be objected to because, on account of dishonest management, the majority of the people distrust it as a means of investing their capital, and are therefore kept from being proprietors."

The lecturer showed by statistics that bank deposits had increased as consolidation went on, out of all proportion to the increase in population; that is, the public had become to a large extent lenders, rather than investors, avoiding the risks, and foregoing the profits of proprietorship. The wealth amassed by the borrowers, in a short time, gave rise to the suspicion, on the part of the people, that they had been wronged. This suspicion opened people's minds to socialism, first, then public ownership, as a cure for the trouble. The time is coming when the people must decide for or against socialism, an untried form of government which destroys industrial liberty, the heart of American institutions.

In this connection the speaker continued :

"But socialism is not the cure. The cure lies in extending proprietorship, by changing conditions so that profits will depend solely upon the vicissitudes of business. The laws of the United States should be changed so that the mere fact of incorporation would be an assurance that the stock has an asset value. Americans are naturally investors, proprietors, and wait only for the assurance that a corporation has been fairly organized to invest.

"The laws at present pending before congress exhibit no purpose to widen proprietorship of the country. But as soon as the people are awake to the real issue, the time to act has come. When they are face to face with socialism or some other non-republican form of government American patriotism will win the day for American institutions.

Judge Grosscup's remedy was stated in his own words as follows:

"There must be a known uniform basis for corporate organization. The public must be assured, by the mere fact of incorporation, that the assets and proposed stock issue have been adjusted to conform to the known legal basis.

"A Corporation organized on the basis just stated should be subjected to the further power of visitation by some department of the government. This is not intended to, nor does it, take the place of so-called publicity. It means only that as trustee for the stockholding public, some department of the government should be charged with taking note of dangers in sight, and armed with power to adequately meet them. It need not take the form of hurtful inquisition into the corporation's affairs; it need not be injuriously paternal. But it must be adequate - fully adequate - to protect the men and women who wlsh, not simply with their hands, but with their savings and pecuniary means as well, to re-enter the industries of the country.

"I would add to this, provision for Interesting the wage-earners of the corporations as part proprietors."