trial corporations, joint-stock companies, and trusts engaged in interstate or foreign commerce, and to require the attendance and the testimony of all persons whose assistance may be deemed necessary. Suits may be brought against the combinations by the Attorney-General, following upon the revelations made. known by the Bureau of Corporations. The bureau is a means of exposing the hidden methods of corporations and of throwing upon their organization and operations that light of publicity which will prove the greatest hindrance to oppression and injustice.

(4) Interstate Trade Commission. Another remedy suggested is the institution of an Interstate Trade Commission, with power to control all interstate trading. Its functions with regard to interstate commerce would be in great measure similar to the functions of the Interstate Commerce Commission with regard to railroads. The commission would have power to grant licenses for interstate trading, to require a full disclosure of the financial condition of a combination, to pass on the lawfulness of all trade agreements, to demand annual reports from the licensed corporations, and to institute suits at law against combinations in favor of complainants who have been made to suffer damages through the unjust acts of the combinations. Some recommend that the Commission be given the power to determine the maximum price of the products of corporations in lieu of any price declared by competent judges to be unreasonable.

At present the trust problem awaits a definite solution. Whatever the future may bring in the way of remedy, regulation and not destruction of the great industrial combinations would seem to be the saner policy. Within the past quarter of a century, a radical change has come over the industrial world. These are days of immense undertakings, and large aggregations of capital are needed to carry them to success. Combinations with all their undoubted economic advantages should be encouraged by the government, and yet they should be so regulated that the evils that may follow upon great power and great wealth may be wholly abolished.

QUESTIONS

1. What are the different methods of doing business?

2. How is capital obtained and where is the liability in individual establishments? In partnerships?

3. What is an industrial joint-stock corporation? Explain the different kinds of stock issued by corporations. How is the corporation charter secured?

4. What are the advantages of corporations?

5. Explain the principal objections to corporations. What is stock watering? Illustrate by an example how stock watering injures

consumers.

6. What is a trust? How is it organized?

7. What are the motives for the formation of trusts? What were the various means employed to eliminate competition? What methods are frequently employed by trusts to eliminate competition?

8. How can a corporation fix the prices of its products?

10. What is the trust problem? Are corporations in themselves an evil? 11. What remedies exist against the wrongs practiced by corporations? Why are state laws inefficient? What are the objections brought against the Sherman Antitrust Law?

12. What further remedies are proposed for the regulation of trusts and corporations?

CHAPTER XVIII

GOVERNMENT REVENUE. TAXATION. PUBLIC DEBTS

I. SOURCES OF REVENUE

THE body politic, or state, requires considerable resources for its existence and prosperous development, the promotion of its public well-being, the constant and effectual guardianship of justice, the preservation of peace and safety at home, and the maintenance of dignity and independence abroad.

In the beginning, when the social organization was in its primitive stage, the matter of collecting funds for the support of the government was comparatively easy. But as nations grew in size and embraced hundreds of thousands of subjects, the problem of collecting government revenues became a very serious and a very difficult one, and still continues to be so, after years of thought and experiment.

The sources from which the state realizes the funds necessary to its existence and well-being may be classed under three heads: (1) Public Domains and Public Businesses; (2) Fines, Fees, and Assessments; (3) Taxes.

Public Domains and Public Businesses. The government may own and keep in its possession vast tracts of land within its own confines or in its foreign dependencies, and may thence derive a part of its revenue.

The United States possesses great tracts of land in the West, containing immense stores of wealth in timber, pasture, and minerals. The public domain of the United States includes the following divisions of land:

(1) Purely agricultural lands; (2) Desert lands;

(3) Irrigable lands;

(4) Precious metal and mineral lands;

(5) Coal lands;

(6) Timber lands;

(7) Stone lands.

In 1912 (June 30), the total acreage of the United States, including all possessions, was 2,395,740,160 acres. Unappropriated lands amounted to 682,984,762 acres. The estimated area in existing national forests was 187,406,376 acres.

Much of the public domain has been donated by the United States government for various purposes. Thus, the land granted by the United States for wagon roads and railroads from 1850 to 1912 (June 30) amounted to 118,527,914 acres. (See Report Commissioner General Land Office, for year ending June 30, 1912.)

Lively interest centers at the present time in the government holdings, and it is the effort of the government to keep such lands from the greed and exploitation of private capitalistic monopolies.

From such public lands revenue can be derived by the government, either immediately, by turning them into government monopolies and operating them directly and securing the profits arising from the product; or mediately, by conceding to private individuals or corporations the right, under certain conditions and limitations, of exploiting the wealth of the lands. Again, the government can sell such lands outright to private owners. The aggregate cash receipts of the United States government from the disposal of public and Indian lands from May 20, 1785, to June 30, 1912, was $455,978,573.

Russia draws great revenues from its crown lands, and Belgium from its African possessions. North Carolina pays 25 per cent of its state expenses from the royalty upon the phosphate rock taken each year from its phosphate deposits. Canada receives large sums in royalties upon the gold mined in Canada. (N. M. Taylor, Elements of Taxation.)

Again, government ownership of such public utilities as rail

roads, telegraph and telephone service, the mail system, tobacco and liquor traffic may become a source of government revenue. In some countries where the government owns and controls such businesses, the purpose of such ownership and control is. chiefly to regulate the businesses and to prevent the abuses that might arise under private ownership, but in many instances large revenues are derived from this source.

Belgium and other countries of Europe manage to draw large revenues from the government railroads. Illinois gets annually from the Illinois Central Railroad 7 per cent of the railroad's gross receipts. This is by reason of a contract in the special charter given the railroad by the state. The amount received is nearly a million dollars a year and is 20 per cent of the state's annual revenues. Georgia receives about $300,000 a year from the rental of the Atlantic and West Point Railroad. Taylor, Ib.)

(N. M.

The United States government owns and controls the mail system, but, as hitherto managed, it has been conducted with a view to giving the most efficient service at a minimum cost to the users, without gaining any surplus revenue from it. Indeed, ordinarily, a yearly deficit has had to be made up out of the general taxes.

Italy, Spain, and France have monopolies of the tobacco business and increase the public funds through that means. Switzerland has a salt monopoly. South Carolina has a monopoly of the liquor business, but it is managed principally for the purpose of regulating the traffic. Many city governments have monopolies controlling the supply of gas, of water, of electric lighting, etc.

One advantage derived from this source of government revenue is that there is no reduction of the incomes of the citizens, and the greater the increase of revenue from this source, the lighter is the burden of personal taxation.

Fines. Considerable revenue is derived from the system of fines imposed in criminal suits.