that it will see that the cards are not stacked."

The direction in which capital shall flow is is determined by competition. Where it proves profitable it continues From where it proves unpro

to go.

fitable it withdraws.

Intervention by the State which seeks to determine the direction of the flow of capital is likely to do harm by fettering industry and diverting capital from its most productive uses. Laws regulating capital in the interest of the investor, when they go beyond legitimate protection against fraud, usually prove ineffective because they come after the evil which they seek to cure. They simply lock the stable-door after the horse is stolen.

Turning to another phase of the current discussion regarding the regulation of the trusts, we find much said in behalf of "publicity." "Publicity," in the minds of many, is the panacea which is to cure all ills by revealing to the fearless eye of the incorruptible official and to the sane, clear mind of the investor all the dark

spots in corporate management. In so far as publicity prevents palpable fraud and insists upon certain sound rules in the organization of new companies, it undoubtedly serves a useful purpose. The purpose served, however, is to provide accurate data upon which the investor may base conclusions as to the earning power of properties. Provisions for such publicity as this are found in the existing laws of most of the States. Railways file reports with the railway boards of the States through which they run, and local corporations in nearly every State are required to make exhaustive statements of their earnings and assets to State officials.

Would further publicity be of value to the investor who is careless or over-optimistic? This is a question which should be thoughtfully considered by those who attach importance to publicity. Under the English law "publicity" has been carried so far ever since 1862 that the representative of a yellow journal or any other curious person has had access for a

shilling to the registers of share companies with authority to ascertain the exact number of shares held by each member with the amount which he has paid for them or failed to pay; yet this calcium light of "publicity" turned upon the business of the modest and honest rich man has not prevented gigantic frauds by his dishonest rivals, repeated losses by reckless speculators, or the necessity of further tinkering the general companies' acts more than sixteen times in a generation, independently of other acts relating to special classes of corporations.

Would the man in America who proposes to take a "flyer" in "steel" or cotton " be more likely than his English brother to be deterred or benefited by more publicity regarding those indus. tries? The Steel Corporation already makes admirable reports quarterly and semi-official estimates of its earnings at much more frequent intervals. In cotton the Government makes crop estimates which come in conflict with many private estimates. The complaints and charges

of bad faith which these Government estimates engender are a suggestive hint of what might follow general Government supervision of industry.

If a man is determined to take foolish risks by buying speculative stocks when he cannot afford to lose, he is not likely to be stopped by anything short of actual prohibition by law. Does the demand for publicity, then, when submitted to analysis, mean a substitution of official judgment for private judgment? It is difficult to see what else it means, if the thoughtless speculator who hopes to make money by buying some stock "for a rise" is to be prevented from doing it when he is likely to suffer a loss. Shall his right to "take a flyer" in cotton be subordinated to the judgment of the chief of the Bureau of Statistics of the Department of Agriculture that the crop figures do not make cotton "a good buy"? If so, State socialism is enthroned at a bound in our political system.

Unfortunately, human foresight has not yet reached the point where it can be

determined with certainty in every case whether a given course will bring a profit or a loss. The man who first invents the formula for determining this point will hold the world in the hollow of his hand. For him and for all to whom he confides his formula, speculation will cease, because it will cease to be speculation.

Putting aside, then, the question of official control over private action, the residuum of the question seems to be, whether greater publicity than exists today would protect the reckless speculator against himself. Does such a man lose money because he cannot get information which he honestly seeks? When he gets a "tip" to "sell Pennsylvania," does he proceed at once to examine all the available data regarding the finances, policy, and future earning capacity of the Pennsylvania Railway? These data exist in the most accessible form which is possible, in official balance sheets printed broadside in the newspapers, and in elaborate detailed reports of operations, assets, train mileage, and earning power per mile. If