The commonwealth. (Greenwood, Miss.) 1896-1923, 1905-12-08
ANNUAL MESSAGE
Of THE PRESIDENT
WATERS IN NEED OF LFGISLA'
TON BROUGHT TO ATTEN-
TIoN OF CONGRESS.
RECOMMENDATIONS MADE
ON SEVERAL SUBJECTS
Increased Power for Interstate Com
merce Favored as Cure for Rail-
read Rebate Evil--Insurance and
Labor Questions.

washington, Dec. BIN his annual mes,
sage to congress, the president brings sew,
eral matters to the attention OF the ma
TONS lawmakers upon which, in his es.
timation, legislation is necessary. Recon-.
mendations are mad for new laws and
advised in statutes already enacted, made
necessary by changed conditions. The
complete message is a document of almost
5000 words. The only reference made tc
tariff revision is in the paragraph devoted
to national revenues, where he declared
that unless our expenditures can be kept
within the revenues, our revenue laws must
be readjusted. What form this readjust-
ment should take, If it is needed, he de,
cIares it is as yet too early to say.
Control of Corporations.
The president devotes considerable space
to the discussion of the great corporations
of the country, and particularly the rail-
roads. He believes the time has come
when they should be placed under federal
control and recommends legislation look
ing to this end. The railroad rebate evil
is deplored, and he advises action that
would abolish it, He believes the present
interstate laws are inadequate
and that If the commission were endowed
with more power it would aid greatly in
oNlNHI5 lNS SSAGu pIODlthL. III tHlS CUillSG-
ton he saws:
1T has been a misfortune that the ma
tional laws on this subject have hitherto
been Of a negative or prohibitive rather
than an affirmative kind, and still more
that they have in part sought to prohibit
what could not be effectively prohibited,
and have in part in their prohibitions con-
founded what should be allowed and what
should not be allowed. 1t is generally use
less to try to prohibit all restraint on COM
petition, whether this restraint be reason
able or unreasonable, and where 1t Is not
useless 1t Is generally hurtful. Events
have shown that 1t is not possible ade-
quately to secure the enforcement of any
law OF this kind by ineessant appeal to the
courts. The department of justice has for
the last four years devoted more attention
to the enforcement of the antitrust legisla-
ton than TO anything else. Much has
been accomplished; particularly marked
has been the moral effect of the prosecu-
tons; but it is increasingly evident that
there will be a very insufficient benefi-
cial result In the way of economic change.
The successful prosecution OF one device to
eyade the law Immediately develops an
other device to accomplish the same pur-
pose, What is needed is not sweeping pro-
bition Of every arrangement, good or bad,
which may tend to restrict competition, but
such adequate supervision and regulation
as will prevent any restriction of compete
ton from being to the detriment of the
public-as well as such supervision and reg
ulation as will prevent other abuses in no
way connected with restriction of compe-
tition. OF these abuses, perhaps the chief,
although by no means the only one, is over
capitaliZation-generally itself the result
of dishonest promotion-because Of the
myriad evils 1t brings in its train; for such
overcapitalization often means an initiation
that invites business panic; 1t always con-
ceals the true relation of the profit earned
to the capital actually invested, and it
creates a burden of interest payments
which is a fertile cause of improper reduc-
ton in or limitation of wages; 1t damages
the small investor, ~discourages thrift, and
encourages gambling and speculation;
while perhaps worst of all is the thickness
and dishonesty which it implies-for harm
to morals Is worse han any possible harm
to material interests, and the debauchery
of politics and business by great dishonest
corporations is far worse than any actual
material evil they do to the public. Untip
the national government obtains, in some
manner which the wisdom of the congress
may suggest, proper control over the big
corporations engaged in interstate com
merce-that is, over the great majority OF
the big corporations-it will be impossible
to deal adequately with these evils"
Railroad Rate Regulation.
He strongly protests against radical or
hasty action in stopping the rebate evil,
and then goes on to say: 81 do not believe
in the government interfering with private
business more than is necessary. l do not
believe in the government undertaking
any work which can with propriety be left
In private hands. But neither do | believe
In the government f1inching from oversee
ing any work when 1t becomes evident tina
abuses are sure to obtain therein unless
there is governmental supervision. 1t is
not my province to indicate the exact terms
of the law which should be enacted; but l
call the attention of the congress to GER
tain existing conditions with which 1t is
desirable to deal. In my judgment the
most important provision which such law
should contain is that comforting upon
some Competent administrative body the
power to decide, upon the case being
brought before it, whether a given rate pre-
scribed by a railroad is reasonable and
just, and If it is found to be unreasonable
and unjust, then after full investigation
Of the complaint, to prescribe the limit of
rate beyond which 1t shall not be lawful to
go-the maximum reasonable rate. as It
is commonly ~called-this decision to 90 into
effect within a reasonable time and to OBJ
tain from thence onward, subject to review
by the courts. 1t sometimes happens at
present, not that a rate is too high but that
a favored shipper Is given too low a rate.
In such cases the commission would have
the right to fix this already established
minimum rate as the maximum; and 1t
would need only one or two such decisions
by the commission to cure railroad COM
panies of the practice of giving improper
minimum rates. l call your attention to
the fact that my proposal is not to give
the commission power to initiate or orig
mate rates generally, but to regulate a rate
already fixed or originated by the roads,
upon complaint and after investigation. A
heavy penalty should be enacted from any
corporation which fails to respect an order
OF the commission. / regard this power to
establish a maximum rate as being essen
tial to any scheme Of real reform In the
matter of railway regulation. The first ne
cessity is to secure It; and unless 1t is
granted to the commission there is little
use in touching the subject at all.
"All private car lines, industrial ROADS,
refrigerator charges and the Ike should
be expressly put under the supervision OF
the Interstate commission or
some similar body 80 far as rates and agree
ments practically affecting rates. are con-
cerned. The private car owners and the
owners of Industrial railroads are entitled
to a fair and reasonable compensation on
their investment, but neither private cars
nor Industrial railroads nor spur tracks
should be utilized as devices for securing
preferential rates. A rebate IN icing
charges, or in mileage. or In a division Oh
the rate for refrigernting charges IS 1ust