below a point which will create new competitors, and, on the other hand, will seek to steadily enlarge its market by offering products at prices which are attractive to consumers. These influences, however, are the result of natural economic forces whose efficiency in preventing abuses is denied by those who advocate further regulation of the corporations than that afforded by existing laws. From the standpoint of the advocates of regulation, therefore, there should be a sharp distinction drawn between legislation for the investor and that for the consumer, if any intelligent progress is to be made. It is rather remarkable that recent criticism of the corporations has turned more upon what the investor has suffered from the decline in values and the flotation of doubtful securities than upon the injury which has been done by corporate exactions to the consumer; yet, by a strange confusion of reasoning, the prejudice caused to the investor by these events, in the cutting of prices, the fall in values, and the collapse of weak concerns, instead

of being welcomed as bringing tardy justice to the consumer, is used as one of the weapons in the general crusade in the consumer's behalf.

That regulation of corporations by law is to a certain degree necessary and desirable, is a recognized principle of our legal policy. Corporations are the creatures of the law because their shareholders are dowered by the law with the privilege of limited liability and the corporations themselves are given the advantages of perpetual life. Heretofore, however, the several States have been left to regulate corporations as they saw fit, and their regulation has been in many cases eminently efficient. They have so far protected the holders of insurance by careful definitions of their rights that the varied forms of policies have been reduced to a nearly uniform income basis. They exercise the power of visitation over State banks, as the Federal Government does over national banks. In many cases, they collect special taxes upon corporate franchises and earnings, which would have

to be renounced if this form of taxation were adopted by the Federal Government. Such legislation has been the result of experience. It did not spring forth fully formed, with the birth of insurance companies and State banks. It has become most nearly perfect in those States where these institutions have attained their greatest development, and its history may well afford an index for the future to those who are not too impatient of the reasoned deliberation of Anglo-Saxon methods in dealing with such subjects.

If there is to be, therefore, further regulation of large corporations, and especially the extension of Federal control over State corporations, it will contribute something to clearness of thinking and precision in action if the ends sought-whether the protection of the investor or the protection of the consumer-are clearly defined and separately considered.

Taking up the subject from the side of the investor, it is obvious that his protection by law implies that he shall be protected against investments in securities

which have not the value they purport to have. It means additional guarantees that dividends which are not earned shall not be paid, and that proper provision shall be made by setting aside reserves in fat times for the payment of dividends in lean times. These are desirable objects, but they are already sought by the corporation laws of the States where corporate business is largest. It is a question whether the protection of the investor in the future should not proceed along the lines of his economic education rather than along the lines of new restrictions upon corporations. Just so far as the Government relieves the citizen of the obligation of looking out for himself, it promotes a condition of dependence upon the State which is detrimental to genuine economic progress.

Ample illustrations of this may be found in the history of corporation law in such countries as France and Germany. The French law requires any foreign corporation entering upon business in France to obtain from the French Consul in the

country where the corporation is authorized a certificate of its incorporation. The certificate means nothing as to the solvency and earning power of the corporation, but it puts upon paper corporations the stamp of the signed declaration of the French Consul that they are legally constituted in a foreign country. While such a circumstance does not mislead the intelligent financier, with ignorant investors the intervention of the French law has proved a positive aid to adventurers in perpetrating frauds, because of their implicit reliance upon the value of an official certificate.

It is hardly possible that any body of law, however minute and however restrictive, could protect investors against the consequences of ignorance in making their investments. The essential thing is not to hamper legitimate corporations by new laws, but to teach the public to judge investments with discrimination. It is not possible in a progressive nation for the law to forbid the owners of capital from investing it in enterprises whose se