Practical Legislation for Governmental Surveillance of Corporations By Perley Morse, C.P.A., of New York THE nefarious practices of corpo rations and their pernicious influ ence in politics and business, have been the subject of much discussion in the public press and by politicians and others in the past two or three years. It can be asseverated that the people have just cause for complaint, but we must not lose sight of the fact that corporate organizations are a necessity, as large business enterprises could not be suc cessfully conducted in any other manner. In the general clamor, however, no practical plan has as yet been proposed making it impossible for corporations to commit acts inimical to public inter ests. Corporations exist by consent of the government (in this country by consent of the governed) hence the government should supervise the business conducted by corporations. This fact is believed by the people and admitted by the cor porations. Therefore, the only question would seem to be the equitable mode of procedure. The Constitution of the United States gives power to Congress to regulate commerce between the states; hence legislation that is constitutional could be enacted by Congress providing a system for the inspection of all corpo rations doing an interstate business. A necessary part of this system would be the appointment of a large corps of inspectors of corporations. Unless the proper class of inspectors is employed the accomplishment of the desired object would at once be defeated. Ex perts with the requisite training rarely accept government employment, in
asmuch as the private remuneration of such men for their skill, knowledge, industry and integrity is far greater than the government would be willing to pay them. It therefore follows that the government would be obliged to appoint as inspectors of corporations men without any special training, thereby enormously increasing the ex penses of the government, without effect. In the majority of cases the appointment of these pseudo-experts would be secured through political or subtle influences opposed to govern mental regulation. During the Roosevelt administration an enormous amount of money was spent by the government (and there is no way for the public to ascertain the amount) in investigating so-called trusts in order to obtain evidence of violation of the law. In many instances suit was brought by the government, but without results; not because there were no violations of the law, but because the evidence obtained by the government was faulty. Notable examples of this were the failure of the so-called beef combine case and the Standard Oil case, in which Judge Landis imposed the now famous $29,000,000 fine, which ap pealed to the American sense of humor, and caused an interminable number of cartoons and jokes to appear in the newspapers and periodicals. Notwith standing the humor, confidence was still further destroyed and thoughtful people heaved a sigh of relief when the higher courts came to the rescue and reversed Judge Landis. The government has now practically
