The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1905-07-13
PERIL IN RATE LEGISLATION.

/ IN CQS LOnCOu CdUlS puU4lSuCu IL tuAo
section, to the London Economists
view of the crash On the New York
stock exchange. The article in full
is now at hand, and deserves larger
citation, as rejecting conservative
| 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 reach
ed. The powerful support that was
! for protracted period accorded to
the market by the important financial
interests that had large blocks Of un-
digested securities to work off no
! longer exists, and liquidation on q
: large scale by pools that loaded them
! selves up with stock in the belief that
! the public could be induced to buy
at greatly enhanced quotations has
absolutely demoralized the market for
the time There are, moreover, grave
appreaensions of coming contests be-
tween groups of powerful flDanciers
for the control of various railway sys-
! TENS. The much vaunted community
Of interests idea, which was to bring
about industrial peace, has been en-
tirely exploded, and there appears to
be only too good reason to fear that
the defeat of the Hartman party in
he Northern Pacific case may lead
to fresh feuds and fresh conflicts,
! which must inevitably have a serious
effect on the prices Of railway Sc
curities.
"Another factor which is attracting
i 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, EN-.
powering the interstate commerce
commission to fix rates, was passed by
the house of representatives., but re-
ceived a check in the senate, and at
the present moment q senate commit
tee 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 proposal to
| fix rates. Moreover, g. mass
OF testimony directed against the pro-
posal to fix rates has been laid before
the senate committee, the contention
being that a law embodying such q
project would have a disastrous ef.
feet on the railways of the country.
We think, indeed, that there is great
force in the argument Of the rail-
ways that the endowment of the inter-
state commerce commission with
power to fix rates would lead to un-
satisfactory results. The task is OBJ
viously one which it would be almost
? impossible for any tribunal efficient
ly and effectually to perform, consid-
ering the multiplicity of interests in
volved and the enormous extent OF
territory served by the railways OF
the United States. And, after all, it
is not so much high rates as the
practice of giving rebates that con-
stitutes a serious grievance against
American railways. The rates, as a
rule, are low, and they have been
brought down to the present level,
not by interference on the part OF
the state, but by the pressure OF
! competition. On the other hand, the
special advantages afforded to the
wealthy corporations that own private
cars, and to the proprietors Of termi-
; nal tracks, constitute in effect SUBJ
stantial rebates, and form a gross
abuse. It is contended, and appar-
emily with reason, that the law as 1t
stands is adequate to deal whit this
and other abuses, but that plea has
in no wise diminished the determi-
nation Of Mr.. Roosevelt to carry, il he
can, legislation Of more stringent
type. He may discover that
he has overestimated the forces be-
hind the agitation for the fixing OF
railway rates by a state tribunal.
but the disturbance that must in
evitably supervene while struggle
is in progress cannot fail to have an
adverse effect on the market for rail-
way securities.
General industrial conditions in
the United States appear to be favor
able, though indications point to the
+: iron and steel boom having reached
it's highest point for the present. It
has to be remembered, however, that
the quotations Of stocks are already
high, and though it is generally
hopeless task to forecast the imme'
date 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 well advised In
leaving American railway stocks alone
until the outlook becomes clearer.
And even the speculator who usually