The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1905-08-04
Function Of the State.

proceeds to call attention W ieCeh'
scandals in insurance companies ana
banking houses, and suggests a closer
supervision of certain kinds OF bnsl-
ness. Continuing along this line that
paper says: "Only in those cases where
large numbers of individuals are depend
emit upon conservative and honest man
agement of corporation, and where
owing to the scope of operations or the
nature of the business, the officers can
be held to account in no other way than
by the enforcement of laws passed for
their guidance, is the government Justl-
fed i'm extending its sphere OF opera
tions to include the regulation of pri-
yate business. Examples of such regu-
lation show the truth of this PROPOSE
ton. The business of deposit banking
is controlled and regulated because the
check or deposit currency is universal
medium of exchange, and because, fur
Their, the deposition, who, is principally
concerned in the safe and economical
management of the business, can exer-
else no direct control upon the directors.
For similar reasons, the insurance bust
ness is a proper subject of public regu-
lation. The policyhOlders of company
are scattered over wide area; it Is i'm
possible for them to unite in the man
agement of its affairs, and at the same
time, because insurance is the only
method of saving as yet generally
adopted, the public interest demands
that these savings should be strongly
safeguarded. Savings banks, building
and loan associations, and trust COM
panies are closely supervised for similar
reasons, and are compelled to observe
the rules of sound business policy in
all their dealings. Much of this regu-
lation is defective in it's methods but,
generally speaking, its principles are
sound and it's results are salutary."
But The World does not take the
same view of the matter when it dis
cusses the states relationship to the
railroads, for it says that Gin the field
of transportation so-called public SER
vice-the scope of public regulation
should be narrowly limited, if the rights
of private property are to be respect
ed The law may legitimately require
of the railroad company full statements
of earnings and expenses, assets and
liabilities. This information is now,
however, generally furnished in abund-
ant detail The law may also require
that rates should be published; that
the same rates should be charged to all
shippers, and that, since the shipper
has no alternative but to use the rail
road, he should be protected against un-
against the offending carrier and also
by the SUPERVISION of public commits
sions In all of these regulations, it
will be observed, the state does not
exceed its legitimate functions. 1t
leaves the management of the transpor-
tation business to those who have in
vested their money in the railroads. 1t
does not attempt to supervise and regu
late the conduct of a private enter
prise. 1t does not attempt to fix the
rates which shall be charged. It's sole
effort is to protect the shipper against
unfair and extortionate treatment, and
its powers are exercised only on rare
occasions and at long intervals"
1t is not the wish of those who are
agitating the question of state regula-
tion of rates that the state should have
control of the transportation lines or
to supervise the railroad properties,
They simply ask that laws should be
enacted to protect the people against
the exorbitant demands of the railroad
companies and to prohibit the giving of
rebates to favored shippers. The World
agrees that the state should be given
this authority and if that paper had
argued wholly along that line no OBJ
lection could be made to it's comments.
In strict sense railroad is not
private enterprise. 1t is an institution
which the general public must use, both
in the promotion of the material and
social welfare of communities. In these
Days of progress the public must de-
pend upon the railroads greatly and to
attempt to carry on business undertake
ings without them would prove futile
And for this reason the state should oc-
cupy an intermediate position wherein
it can give the people that protection
which is due it and at the same time
not hamper the transportation lines in
the carrying out of the functions for
which they were organized.