Business & Finance: Federal Charters?

Early in the Century when Roosevelt I was jousting with Big Business, the idea of a Federal incorporation law was seriously pondered. But, as the nation grew richer, the subject of corporate reform grew less interesting. Last week, under Roosevelt II national charters were up again, this time in the sixth report of the Senate Banking & Currency Committee on their findings of the past three years. Said the Committee:

"The cure for our corporate ailments, circumvention of the law, investment trust and holding company abuses and interlocking directorates may lie in a national incorporation act."

Business fastened anxiously on that one paragraph, pretty much ignoring the rest of the report. At any other time a Federal charter proposal, bringing as it would the blessings of uniformity, would have been well received. The New York Stock Exchange is on the Senate Committee's own record as favoring the idea of Federal charters. But coming on top of the Securities Act. the Stock Exchange control law and other New Deal manifestations of Government-over-Business, talk of national incorporation seemed to be a case of whipping the horse at full gallop.

Back in the days of the Big Stick, New Jersey was the favorite mother of corporations. Today it is Delaware, whose charters permit a corporation to do about anything it wants except overthrow the government. Even New Dealers scurry up to Wilmington to charter pseudo-governmental agencies like Electric Home & Farm Authority, U. S. Public Works Emergency Housing Corp., Commodity Credit Corp., Federal Subsistence Homesteads Corp.