THE CONTROL OF TRUSTS 243
industrial securities should represent as little risk as any others, and should pay no higher dividends. Then in some way a regulating force should be found which would keep profits at the normal level and give the consuming public the benefit of improvements, except generous managerial compensation, in lower prices. And even if prices have continued to fall after the trust has been formed, the fact that in a few cases the pub- lic can be exploited is an evidence of irresponsible power that is sufficient cause for public concern.
The foregoing analysis of the advantages and disadvantages of trusts suggests in general the course which legislation should take with reference to them. First, the laws already enacted which seek to destroy this great labor-saving machine should be repealed. In the ne.xt place, the evils would be remedied by some system of public control which would throw some safeguards about the legitimate capital investment, and some system of taxation which would tend to regulate prices by absorbing all profits above an average amount. The second of these remedies would necessarily involve the first ; for the actual earnings of the trust could not be ascertained without some rigid system of inspection, similar to that to which the national banks are now subjected, but having regard for a different set of facts. Mr. Havemeyer in his famous statement before the Industrial Com- mission said that he thought it would be a good plan to expose the business books of the great corporations to government inspection. While manufacturers have shown a tendency to keep their accounts secret, there would doubtless be no legiti- mate objection to a regular system of oversight which would make no necessarily private matters public, but would give inex- orable publicity to any crookedness in the management of that which is truly a trust.
The plan which I suggest for the control of trusts I offer with some diffidence, but with the conviction that it would be both efificacious and feasible. It is a system of graduated income taxation by the national government, with the rigid supervision of the accounts of corporations which such a system would neces- sitate. Of course, the national government could bring under
