on the facts; condemns the contract between interlocking corporations only when it is contrary to the interests of the private stockholder or offends public policy; condemns interlocking directorates where the facts show that they should be condemned, and therefore in the absence of sufficient information waits awhile before it makes up its mind; condemns the common ownership of competing corporations only when it is demonstrated that neither the surveillance of such corporations, the supervision of their contracts, nor the prescription of their organization has been enough. Mediation, however, is not mere meditation. Its time is now and its method is one of ceaseless activity.
BY VICTOR MORAWETZ OF THE NEW YORK BAR
(From the Harvard Law Review, June, 1913)
This article might properly have been placed in a subsequent division on "Tendencies toward Federal Centralization," on p. 498. It is inserted here because the problem of federal control has become the latest and most vital phase of the corporation question. -- EDITOR'S NOTE.
The formation of corporations is not a primary purpose or power of the national government. Corporations are not mentioned in the Constitution. But, subject to the limitations expressly imposed by the Constitution, Congress has power to enact laws to execute any of the purposes or powers entrusted by the Constitution to the national government; and, therefore, Congress can pass an act of incorporation, or an act regulating corporations, if such an act is merely a means of executing some constitutional purpose or power.
In 1791 the first Congress passed a bill incorporating the Bank of the United States, a private stock corporation with power to establish branches and to engage in a general banking business. President Washington called upon Thomas Jefferson, the Secretary of State, and Edmund Randolph, the Attorney-General, for opinions as to the constitutionality of the bill. Their opinions being adverse, the President called upon Alexander Hamilton, who was Secretary of the Treasury and had been the principal author of the bill, to state the reasons which induced him to consider the bill constitutional. Hamilton submitted a persuasive opinion in favor of the constitutionality