The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-05-28

lions and of the conduct OF every puD1e
official identified with them is made thor
oughly plain before the subject is
dropped. For the present the governor
and his investigation have the center of
the stage, and they may keep it till they
are through
sCHIFF ON OVERCAPITALIZAT
Mr.. Jacob Schiff, of New York, in his
testimony before the industrial commits
sion last Wednesday gave utterancc to
several original as well as unusual views
on the present Industrial conditions. He
made the broad statement that the OBJ
lection raised TO the great corporations
that they were overcapitalized, that the
management issued millions in shares
which represented no value and upon
which dividends must be paid out of the
pockets of the public, was sheer non
sense That the measure of the value
of corporate shares was the earning power
of the property represented by them.
That no corporation could pay dividends
which it did not earn, without going to
the wall sooner or later. The point Of
Mr. Scniffs remarks is that no matter
how corporation is capitalized, the
public is not affected as there is no adj
vance of rates for service. So far as the
public is concerned it does not matter
whether railroad is paying 2 or 10
per cent on it's stock. In this Mr.. Schir
is mistaken. The rates may be the same,
but the public gets better service from a
railroad which is paying its stockholders
a reasonable dividend. When railroad
is not paying anything on it's stock, the
management strains every nerve to cut
down running expenses. This Is often
done at the expense of tho service. Fhe
accommodations are not so good, travel
crs are not so comfortable and freight
is not handled with proper care. This
is the natural result from shorthanded-
ness.
On the question of government control
of quasi-public corporations, Mr.. Schin
was equally emphatic. He does net be-
lieve in government ownership in the
United States, and assigns as his rea-
son, the inadaptation of this government
to such enterprises. A government to be
paternal must be centralized. Where
there is a responsible head-a man who
is not subject to the whims of a tickle
public at election time-these government
enterprises can be conducted with
economy. A government like Russia,
Germany or even England can do bust
ness in a business way, bat congress
never can. So far as the actual business
of the nation is concerned our govern
ment is dismal failure. We cannot
even run our postal department. with
out gigantic deficiency, which is owing
to abuse of the department by members
of congress and their henchmen. The
less business the congress of the United
States has to do, the better it will be
for the country at large. The greatest
objection to the policy of insular govern
ments which the administration has been
trying to force upon the country is the
utter inability. of congress to govern any
thing outside of the limits of the con-
stitution.
Mr.. Schiff is of the opinion that a COM
munity Of interest between the railroad
systems which will prevent the unnec-
essary outlay of capital in useless com
petition will rebound to the benefit Of
the public by affording better service. A
combination Of railroads so strong as to
become insolent and oppressive, he MAIN
tains, can never be perfected in this
country. where the legislatures have so
many ways of correcting abuses of that
nature
The Industrial commission is exhibiting
to the public both sides of Industrial
shields which have for some months been
the cause of much earnest discussion. If
nothing more is accomplished, much good
will result from this large addition to the
public knowledge of laws and customs
that govern large enterprises.