TRUSTS AND MONOPOLIES SPEECH OF HON. WILLIAM H. THOMPSON OF KANSAS IN THE SENATE OF THE UNITED STATES AUGUST 25, 1914 WASHINGTON SPEECH OF HON. WILLIAM H. THOMPSON, OF KANSAS. The Senate, as in Committee of the Whole, had under consideration the bill (H. R. 15657) to supplement existing laws against unlawful restraints of monopolies, and for other purposes. Mr. THOMPSON. Mr. President, the objects of the trust bills under consideration, briefly stated, are to prohibit and make unlawful certain unfair practices which ordinarily, when considered separately, might not constitute a violation of existing laws; to strengthen the Sherman antitrust law; to prevent the formation of trusts and monopolies by disarming their promoters in the outset; and to prohibit overcapitalization of corporations. Among the particular practices made unlawful is unfair and oppressive competition exercised for the purpose of injuring or destroying the business of competitors, holding companies, interlocking directorates, and the overissue of securities by common carriers. The officers and directors of corporations are made personally liable for the unlawful acts of the corporation on the theory that they after all are the real perpetrators of the offenses against the law and consequently should suffer directly the penalty of the law. Another important feature of the legislation is the exemption of labor and farmer organizations from the operation of the antitrust laws in order to avoid the embarrassment occasioned by some of the decisions of the courts on this question, which I discussed a few day ago. The trust question is one of the most difficult problems ever presented to Congress for solution. The trust is the greatest menace to individual effort ever conceived by man. The idea was created by men whose wealth had already reached proportions beyond the dreams of avarice, but whose greed was unsatisfied unless they practically controlled all of the production of the country and every business enterprise engaged in by their fellow men. The trust wave swept over the country like a ter rible cyclone, causing greater loss and destruction of property accumulated by individual effort than all of the storms and cyclones that have occurred since the flood. Men who had devoted a lifetime to a particular trade or business found themselves bankrupt in a single night and, what was really worse, left in an entirely helpless condition, where further individual effort along their chosen line of employment brought no returns. The greatest period of trust formation and activity occupied the decade between the years 1898 and 1908. The business men of the country during this period seemed to be corporation mad. The principal business of lawyers was to organize corporations, and as soon as organized to throw as many corporations into one concern as could be induced to enter a combination in order to create the greatest monopoly possible in the particular business engaged in or attempted to be controlled. During this time I was living in the oil and gas section of my State and witnessed that great development in southeastern Kansas. Most every person owning as much as 40 acres of land formed a corporation with a capital stock of about $1,000,000 and began at once to sell $1 shares of stock in his company at about 10 cents per share. If he finally got money enough together to drill a well and happened to strike oil or gas, his stock immediately went up to par, and a $2,500 oil or gas well raised in value in the owner's mind to a million dollars. The result was that nearly every individual operator failed and the Standard Oil Co., as usual in such cases, came along and purchased all of the wrecked properties for a mere song, reaping the benefits of all the individual labor and money spent in prospecting and obtained and still retain almost complete control of the field. Thousands of corporations were formed everywhere over the United States at the rate of about 20,000 each year. The growth was so rapid that, according to the number of returns made to the Internal Revenue Commissioner in 1909, the number reached the enormous figure of 262,490 and gradually increased since that time until in 1912, when 305,336 corporations rendered returns for that year representing a capital stock of $61,738,227,730.54 and bonded and other indebtedness of $34,749,516,353.63 and an aggregate net income of $3,832,150,410.92. The increase in capital stock in 1912 over 1911 is shown to have been $1,671,088,805.12, while the amount of bonded and other indebtedness shows an increase of $2,585,978,392.23. The net income reported shows an increase in that single year of $618,443,163.10. (See 1913 Annual Report of Commissioner of Internal Revenue, p. 12.) About S,000 of the 305,336 corporations have a capital stock of $1,000,000 or more and about 600 combinations of corporations, or what are commonly called "trusts," were organized from these corporations. As corporations are combinations of individuals, trusts are generally com binations of corporations, so that many industries may be carried on under one general management. I have spent considerable time and labor trying to ascertain with some degree of accuracy the number of trusts and large combinations of corporations organized to date, and I am able to furnish a list of most of them, which I have endeavored to make as complete as possible. Of course in the preparation of any list of trusts much must necessarily depend upon the definition or understanding of the term “trust." Several different definitions have been employed by various writers on this subject: (a) Definitions based on size alone; for example, all concerns having a capital of more than $1,000,000 or $5,000,000 or $10,000,000 are sometimes regarded as trusts. (b) Definitions based on degree of control of industries; for example, it has been held that a concern is a trust if it controls half the products of an industry, or by others if it controls CO per cent or 40 per cent or 30 per cent. (c) The presence to a substantial degree of this control has been held by many writers to be the determining factor justify. ing the term "trust." According to this idea, any concern is a trust which, by virtue of its control of raw materials or its production of a large portion of the output in a given industry. or by other means, is able to control prices. The best definition I have been able to find, however, and specially applicable to the subject under consideration, is given |