Decorah public opinion. (Decorah, Winneshiek County [Iowa]) 1895-1928, 1905-06-28
PERIL IN RATE LEGISLATION.

From the New York Evening Post. }
Reference has hitherto been made,
in the London cable published in
this section, to the London Econom-
lists view of the crash on the New
York Stock Exchange. The article in
full is now at hand, and deserves
larger citation, as rejecting conser-
vative foreign view. The Economist
says:
1T is by no means surprising that
American railway stocks should have
experienced a sharp reaction from the
high prices that were recently reached.
The powerful support that was for
a protracted period accorded TO the
market by the important financial in
terest that had large blocks of un-
digested securities to work off no long
er exists, and liquidation on a large
scale by pools that loaded themselves
mp with stock in the belief that the
public could be induced to buy at
greatly enhanced quotations has abso-
lutely demoralized the market for the
time. There are, moreover, grave
apprehensions of coming contests be-
tween groups Of powerful financiers
for the control of various railway
systems. The much vaunted com
munity of interests idea, which was
to bring about industrial peace en-
tirely exploded, and there appears to
be only too good reason to fear that
the defeat of the Hartman party in
the Northern Pacific case may lead
to feuds and conflicts, which must in
evitably have a serious effect on the
prices of railway securities. Another
factor which is attracting widespread
attention in the United States is the
determined attitude of Mr.. Roosevelt
in regard TO legislation for the fixing
of railway rates. In February last the
Townsend bill, empowering the In
terstate Commerce Commission to fix
rates, was passed by the House of
Representatives but received check
in the Senate and at the present
moment "a Senate committee is taking
evidence as to the effect that would
be produced if the bill. passed into law.
Mr. Roosevelt is an ardent supporter
of the prosposal 70 fix rates. Moreover.
a mass of testimony directed against
the proposal TO fix rates has been laid
before the Senate committee, the
contention being that a law embody-
ing such a project would have dis
astrous effect on the railways of the
country. We think, indeed. that there
is great force in the argument of the
railways that the endowment of the
Interstate Commerce Commission
with power to fix rates would lead
TO unsatisfactory results. The task is
OBVIOUSLY one which ii " ould be almost
impossible for any tribunal efficiently
and effectually TO perform, considering
the multiplicity of interests involved
and the enormous extent of territory
served by the railways of the United
States. And, after all, it is not as
much high rates as the practice of
giving rebates that constitutes
serious grievance against American
railways. The rates, as a rule, are
low, and they hav been brought
down TO the present level, not by in
terference Oh the part of the State,
but bv the pressure of competition.
On the other hand, the special ad-
vantages afforded TO the wealthy
corporations that own private cars,
and to the proprietors of terminal
tracks, constitute in effect substantial
rebates, and form gross abuse. 1t
is contended and apparently with
reason, that the law rs it stands is
adequate TO deal with this and other
abuses, but that plea has in no wise
diminished the determination of Mr..
Roosevelt TO carry, il he can, leg: sla-
tion of more stringent type. He
may discover that he has overestimated
the forces behind the agitation for
the fixing of railway rates by a State
tribunal, but the disturbance that
must inevitably supervene while a
struggle is in progress cannot fail
to have an adverse effect ON the
market for railway securities.
General industrial conditions III
the United States appear TO be favor
BILE though indications point TO the
iron and steel boom having reached
its highest point for the present. 1t
has to be remembered, however, that
the quotations of stocks are already
high, and though it is generally
hopeless task to forecast the immedi-
ate future of the American railway
market, investors will do we'll to
appreciate the factors to which we
have drawn attention. They will
probably, indeed be we'll advised in
leaving American railway stocks
alone until the outlook becomes
clearer. And even the speculator who
usually finds his opportunity i'll
fluctuating markets is ON dangerous
ground here since the American mar
ket is subject TO sudden and violent
spasms, the result of wire-pulling be-
hind the scenes, of which the outside
public have no means of obtaining
the slightest knowledge beforehand.