tion or association, to do any Act or thing in restraint of trade, or to do anyth.ng outside of the State of its incorporation which it is not permitted to do therein;

(c) Provide that all its stockholders shall have an equal right to vote according to the number of shares held by them, respectively, at all meetings and for all directors, subject to any general limitation on the number of votes that may be cast by a single stockholder;

(d) Provide that no other corporation, association. or partnership shall have any vote or voice, directly or indirectly, in its affairs, and that no person representing, directly or indirectly, any competing business as owner, stockholder, officer, employee, or agent thereof or otherwise shall have any such vote or voice, directly or indirectly, in its affairs or be eligible as a director or officer thereof;

(e) Provide that its capital stock shall be fully paid or payable, and permit it to be paid in property or services only when the value of such property or services has been determined according to the fact upon competent and specific proof under oath filed in a designated public office;

(f) Limit its surplus at any time to fifty per centum of its outstanding capital stock and its indebtedness at any time to not more than its outstanding capital stock and surplus;

(g) Provide that such corporation shall by an amendment of its charter be subject to and comply with, and, if necessary, shall accept, any requirement that may be made by the State of its incorporation and with any requirement that may be imposed by Congress as a condition of its right to engage in interstate commerce.

Second. Unless it is conducted and managed in conformity with the said provisions and limitations, and is organized under the laws of a State, Territory, or District in which its executive offices are located and its directors' meetings regularly held.

Third. If it directly or indirectly, of itself or in connection with others, destroys or seeks unfairly to stifle fair competition in any part of the United States in the manufacture, production, mining, purchase, sale, or transportation of any articles of commerce not the subject of any patent, copyright, or trade mark held by it either by making or effecting exclusive contracts, rights, or privileges relating thereto, by restricting its customers or other persons with regard to price, territory, or otherwise in freely buying, selling, or transporting any such article, by securing the monopoly or control of raw material or sources of supply or of any business connected therewith, by temporarily or locally reducing prices with intent to stifle competition, by accepting rebates, or by any other act, device, or course of business that is unfair and tends to secure an unfair advantage and unreasonably and unfairly to destroy compe tition.

SEC. 2. That every contract made in violation of this Act shall be void, and no corporation or association shall bring or maintain any suit or proceeding in any court of the United States unless it is organized, conducted, and managed as required by section 1, nor shall this provision prevent the removal of any such suit or proceeding to such courts where such defense may be available to the defendant.

SEC. 3. That the prohibitions of section 1 and section 2 shall apply to any association membership in which is represented by shares, and the word "association" used in this Act shall include any joint-stock company, business, trust, estate, or any form of association used for business purposes; but said prohibitions shall not apply to any corporation or association not engaged in business for profit or engaged exclusively in any one or more of the following businesses: Education; a railroad or other common or public carrier of property or persons or messages; banking; insurance; the supply of water, light, heat, or power; or engaged exclusively and independently in any business or businesses the substantial bulk of which is carried on in foreign countries or exclusively in any one State or Territory or District, and which does not involve the transmission of goods from one State or Territory or District to another, nor the purchase. sale, or consignment of articles commonly the subject of of commerce between the States and Territories, and actually intended for or becoming the subject of such commerce.

SEC. 4. That no person or persons shall form, operate, or act as or for a corporation or association for the purpose or with the effect of violating this Act or conspire thereto and of themselves or by coconspirator do any act or thing to effect such conspiracy.

SEC. 5. That every corporation, association, trust, or person violating this Act shall be subject, upon conviction thereof, in case of a corporation or association, to a fine not exceeding 10 per centum of its capital stock, or to a perpetual injunction against engaging in interstate commerce, or both, and in the case of a person, to a fine not exceeding $10,000 for each violation, and, if the violation is willful with intent to defraud or create a monopoly or unfairly to stifle competition, to such fine and imprisonment for not exceeding five years. SEC. 6. That the Act of February 11, 1903, relat.ve to the expedition of certain suits in equity and sections 4 and 5 of the Act of July 2, 1890 known as the Sherman Antitrust Act, shall apply to all proceedings and suits in equity under this Act.

SEC. 7. That the purchase, sale, or consignment of any article intended to become and actually becoming an article of commerce between the States or Territories shall be deemed to be an act of engaging in such commerce under this Act.

SEC. 8. That the foregoing provisions of this Act shall take effect January 1, 1913, but shall not apply to corporations or associations having a capital stock and surplus under $10,000,000 until January 1, 1914.

SEC. 9. That any corporation or association organized, conducted, and managed as required by section 1 shall, after the passage of this Act, be entitled to engage in commerce between the States and Territories, and to carry on its authorized business relative to such commerce in any part of the United States, subject to the provisions of this Act and to all present laws of the United States and to future Acts of Congress, and to the general laws and taxing power of any State, Territory, or District in which it may do business. Senator O'MAHONEY. If either of these bills had been enacted, we might easily have avoided the depression.

The importance of corporations to the economic life of the United States has been recognized for 50 years and during that time Congress has been trying to meet the problems resulting from their growth. The problem with which this bill deals today has been before Congress and the people of the United States throughout that period. Practically every President who has held office during this period, with the exception of those who have been inaugurated since the World War, has sensed the danger and urged the exercise of Federal power over corporations. I would like at this point to read into the record a statement made on December 3, 1888, by Grover Cleveland in his annual message to Congress. He said, after having described the condition of the country:

We view with pride and satisfaction this bright picture of our country's growth and prosperity while only a closer scrutiny develops a somber shading. We discover that the fortunes realized by our manufacturers are no longer solely the reward of study, industry, and enlightened foresight, but that they result from the discriminating favor of the Government and are largely built upon undue exactions from the masses of our people. The gulf between employers and the employed is constantly widening and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor.

As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel.

Observe this sentence:

Corporations which should be the carefully restrained creatures of the law and the servants of the people are fast becoming the people's masters.

Senator O'MAHONEY. If one goes back in the history of the development of this idea of Federal incorporation, one finally finds its origin in the first administration, the administration of George Washington, where one reads of the controversy between Alexander Hamilton and Thomas Jefferson. Hamilton, as we all know, was

the sponsor of the idea of incorporating a United States bank. The argument was made by Jefferson that there was no specific power in the Constitution to authorize the Federal Government to grant a charter to a corporation. One of the most interesting things that I have run across in the study I have been making of this subject is the paper that Thomas Jefferson wrote in opposition to that charter. First, there was this point which perhaps proves better than anything else the character of the man and, which I may mention as an aside. After having made a very potent argument against the bank Jefferson closed his speech with some such words as these. They were very formal in those days. He said:

It must be added, however, that unless the President's mind on a view of everything which is urged for and against this bill, is tolerably clear that it is unauthorized by the Constitution; if the pro and the con hang so even as to balance his judgment, a just respect for the wisdom of the legislature would naturally decide the balance in favor of their opinion.

In other words, having made a forceful argument against the incorporation of the bank, he, nevertheless, said to the President :

If I have not entirely convinced you and your mind is in any degree uncertain, then do what the lawmaking power believes should be done.

I mention this because it seems to me the time has come in the development of our country when the lawmaking power should assert itself to a much greater degree than it has in the past 25 or 30 years. I think the time has come when Members of Congress, both of the Senate and the House of Representatives, ought to give their undivided attention to this business of meeting the economic situation which confronts us.

There was another statement in Jefferson's argument to which I should like to call attention. His opposition to the bank was based almost exclusively, after all the legal arguments had been made, upon the conviction that, if the Federal Government should undertake to charter a bank, it would in effect empower the incorporators to over-awe the States. He feared for the people and the people's government if aggregations of capital were to be permitted, without let or hindrance, to dominate the economic life of the country. His fear was that Federal corporations would over-awe the States and, therefore, he was against Hamilton's plan, because he was for government by the people. But what we have lived to see is that corporations to which charters have been issued by State governments are, to all intents and purposes, over-awing not only the States, but are almost able to over-awe the Federal Government itself.

The modern corporation has become an economic state. It is not in any sense a private business. It is a public business because it is composed frequently of hundreds of thousands of persons, stockholders upon the one hand who exercise no control over or responsibility for their property, and hundreds of thousands of employees upon the other, who are likewise without voice, not only over the policies of the corporation but over the terms of their own employment.

These corporations are created by the States, which have no jurisdiction to regulate the commerce they carry on, commerce among the States. In many instances they have become more powerful than the

States which gave them birth, and they dominate and direct the entire economic life of the country, not in the public interest but solely in the interest of the small group of powerful persons who have gained control of them. It is absurd to imagine that we can safely apply to these huge corporations the principles and rules which have grown up around the business of the natural person.

I have drawn you a picture of the Anaconda Empire. I think it might be altogether fitting at this time to say just a word or two about the General Motors Corporation, because that is very much in the public eye at the moment. To my mind, this illustrates most clearly the point that I am trying to make, that business is interstate; that the Constitution of the United States having conveyed to the Federal Government the power to regulate interstate business, the Congress of the United States owes it to the people of the United States to exercise that power. When all is said and done, the public interest is paramount. We may ally ourselves with capital or labor; we may ally ourselves or think we ally ourselves with the very wealthy or with the toiling poor, to use the words of Grover Cleveland; but when all is said and done, the paramount interest in the United States of America is the public interest. It must be obvious to any person that the public interest cannot be properly subserved under the system of corporate control which has been permitted to grow up in this country. View the General Motors embroglio at the present time. I am advised that this corporation employs almost a quarter of a million men and women and that its stockholders number at least 350,000. Here we have a corporation with which the lives of over half a million persons are intimately and directly connected, to say nothing whatsoever of their families, and to speak only of the men and women who gain their daily livelihood from this corporation, the men and women who get their dividends from this corporation. There are more persons thus intimately connected with General Motors than you will find inhabitants in some of the States. Not only is that true, but I am told that General Motors has at least 60, or maybe 65, plants throughout the United States.

But more important than that, 120,000,000 pounds of rubber go every year into the manufacture of the tires which are placed upon General Motors automobiles and trucks. There is another industry in itself which is intimately tied to the motor industry. What injures the motor industry injures the rubber industry.

But that is not all. I am advised that 150,000,000 pounds of cotton from the sunny South go into the manufacture of these automobiles. I understand that in 1936 over 311⁄2 million freight cars transported the products of the automobile industry in the United States. Of course, not all of them were the products of General Motors. General Motors is said to control about 42 percent of the industry. So there you have the railroads of the United States dependent to a substantial degree on what happens to General Motors.

Then you have copper from the mountains of the West and wood from the Pacific coast. There are 200 million board feet of lumber every year going into the manufacture and shipment of General Motors products. So here we have another great industry, a great producing industry, dependent upon what happens in the negotiations between labor and management controlling General Motors.

I could go on down to steel, 9 percent of the total output of which in the United States goes into General Motors cars. We also have the production of plate glass, leather produced on the plains of my State and the plains of Senator McCarran's State, wool from our sheep. All these things go into the mills of the General Motors Corporation. In other words, as Woodrow Wilson once stated:

These great corporations are economic states. They are no longer private corporations.

As was stated in the Wyoming constitution corporations are supposed to be agencies of public good

All powers and franchises of corporations are derived from the people and are granted by their agent, the government, for the public good and general welfare, and the right and duty of the State to control and regulate them for these purposes is hereby declared.

I said a moment ago when I quoted from Cleveland that several Presidents have been urging this principle. In December 1902 President Theodore Roosevelt declared in one of his messages that "No more important subject can come before the Congress than the regulation of interstate business." President Taft sent to Congress a lengthy message, transmitting with his approval a bill which is substantially title III of this measure. On August 8, 1919, in a special address to Congress, President Woodrow Wilson said this:

We should formulate a law requiring a Federal license of all corporations engaged in interstate commerce and embodying in the license, or in the conditions under which it is to be issued, specific regulations designed to secure competitive selling and prevent unconscionable profits in the methods of marketing. Such a law would afford a welcome opportunity to effect other muchneeded reforms in the business of interstate shipments and in the methods of corporations which are engaged in it.

And now, returning to the history of General Motors, I have given you a picture of the economic relationship between that corporation and the business, commerce, and industry of the United States. Let us look over the corporate structure for just a moment. The General Motors Corporation was incorporated under the laws of the State of Delaware on October 13, 1916. That was a reorganization, and at that time the new corporation acquired practically all of the stock of the old General Motors Co. of New Jersey, a corporation which has since been dissolved. Here we have a Delaware corporation which is not confined to intrastate business in the State of Delaware, but which was founded to take over a business already in operation in other States. It was organized to carry on "commerce with foreign nations and among the States", to use the words of the Constitution of the United States. It was organized for no other purpose, and yet it is an agency of the State of Delaware. Its principal office is in its skyscraper in the city of New York, not under the jurisdiction of the State of Delaware, but where its officers can be close to the financial district and the financial leaders who dominate its policies.

It has a subsidiary corporation known as the AC Sphinx Sparking Plug Co., Ltd., of Birmingham, England; another known as Adam Opel A. G. of Russelheim, Germany; another known as General Motors of Canada, at Oshawa, Ontario. It owns the McKinnon Industries, Ltd., of St. Catherine, Ontario. It owns the Allgemeine Finanzierungs Gesellschaft of Russelheim, Germany, which is a sub