[Footnote 1:  “Law, Its Origin, History, and Function,” N.Y., 1907.]

[Footnote 2:  These provisions will be found digested in the writer’s “Federal and State Constitutions,” pp. 339-341.]

One of the principal earlier objects of the trust was to evade the corporation law.  To-day they specially aim at becoming a legal corporation.  In like manner their earliest object and desire was to escape all Federal supervision and interference by legislation or otherwise; to-day they are desirous of such regulation under Federal charters, for the purpose of escaping the more multifarious and radical law-making of the forty-six different States.  Before the Industrial Commission in 1897-1900, all the heads of the great “trusts”—­Rockefeller, Archbold, Havemeyer—­testified in favor of Federal incorporation; almost all other witnesses, except one or two New York or New Jersey corporation lawyers, against it.

In the article in the Harvard Law Review, above referred to, the writer suggested that the evil might be cured by compelling trusts to organize as corporations, thereby bringing them under the regulation and control that the State exercises over corporations.  That has come to pass, but the remedy has not seemed adequate.  In the early Sugar Trust case, the New York Supreme Court decided that combinations to sell through a common agent, thereby, of course, fixing the price, with other common devices for controlling the market and preventing competition, were illegal at the common law; and also that a corporation which, in order to bring about such a combination, put all its stock in the hands of trustees or a holding company, thereby forfeited its charter, the only result of which decision was to drive the Sugar Trust from its New York charters to a legal organization in the State of New Jersey.  It is noteworthy that one or two of the most obvious remedies for this condition of things have never been employed, possibly because they would be too effective.  That is to say, there might be legislation that a corporation should not act out of the State chartering it—­that a New Jersey corporation, holding no property and doing no business in New Jersey, should not be used to carry on business in New York.  We also might have legislated, going back to the strict principles of the common law, to forbid any corporation, any artificial body, from holding shares in another corporation.  It is doubtful, to-day, whether this can be done under the common law, and the authors of the Massachusetts corporation law refused expressly to provide for it; on the other hand the proposed Federal Incorporation Act expressly validates it.  We do, however, begin to see some legislation on this line of approach, notably in the case of competing companies, several Western States at least having statutes forbidding a corporation from holding stock in such companies; and it was one of the recommendations of President Taft’s recent message, at least as to railroad companies not holding half of such stock.