62 J. A. HOBSON 



of the trusts are not directly amenable to federal legislation 

 or administrative control. America is brought up suddenly 

 against the essential inefficiency of her federal constitution. 

 The British parliament is competent to pass any measures it 

 deems necessary to control, to nationalize, or to destroy any 

 trusts or combinations that might arise in our dominions; 

 railroads, mines, manufactures are all amenable to its supreme 

 control. Not so the government at Washington. The only 

 great industry the regulation of which is clearly within its 

 competency is the railroad, and even there its powers are 

 limited by the Supreme court's interpretation of the passage 

 in the constitution which gives power to congress "to regulate 

 commerce among the several states." It is improbable that 

 so drastic a step as the nationalization of railroads would 

 be approved as constitutional by the Supreme court. As for 

 the manufacturing, mining, and financial corporations, they 

 are properly amenable only to the government of the state in 

 which they are registered. In their actual economic structure 

 and operations most of these " trusts" are federal businesses, 

 but in their legal structure, they are state creations, and are 

 only amenable to state control. In theory the concurrence of 

 several states could doubtless establish a fairly substantial 

 body of control, though even then their efforts might be re- 

 duced to naught by the absence of any machinery for common 

 simultaneous administration. In point of fact such common 

 action of states is impossible; states like New Jersey, Illinois, 

 and West Virginia make a large part of their state revenue 

 by enticing trusts to register in their limits upon conditions 

 of loose legal regulation. Voluntary state co-operation is no 

 practicable substitute for federal control. 



