The Washington herald., 1906-10-14
Prof. H. c. Adams Tells What
1t Nay Accomplish.
CHECK UPON WALL STREET
Head of New Department OF Statis-
ties and Accounts In the Interstate
Commerce Commission says Sue
cess OF Railroad Regulation Is
Vital in Our Economic History.

10 national eminence has been slow he
/ received his degree in lS74 al Iowa Col
/ lege. then went TO Germany and returned
/ 10 apply the German idea Of Original
/ research. He has been a lecturer at
Johns Hopkins, and for quarter of a
/ century has been teaching political econ
omy al Michigan University Public
Debts Is perhaps his best volume. but he
is also the author Of Taxation in the
! United States" Science OF Finance. 3"
State in Relation TO Industrial Educa-
tion. Statistics Of Railroads" Eco
Monies and Jurisprudence.
When Prot. adams came back from
| Europe. years ago. he was one of a group
/ of radical young fellows whose minds
were swayed by emotional ferVor for the
/ sc-called poorer classes The remedy was
/ 70 be something that Oordered on State
socialism In the fuilness OF time the
radicals lived 10 shade their opinions
/ but adams was long & hard fighter. He
/ often rsn counter 10 the Chronicle
1 the high priest Of finance. and many a
/ hard Wnack dld Adams receive He was
among the hrsI 70 recognize that there
/ are businesses. especially the natural
monopoiies, that must eventually be con-
trolled. al least regulated by the Federal
/ government
/ From all that I could learn. / was
unable 10 md that Prof Adams. has add
1 ed anything new 10 the study OF eco
nomic theory: but to him credit Is due.
/ In large measure. for his stimulating in
huence on the great question Of cor
/ porate regulation. He early saw thar
/ by It's very nature the railroad business
/ must become matter OF national con-
Z U-h -
called forth much hostile criticism, Prot
I Adams lived 20 see the day when his
early writing became. if not accepted,
al least verified by common thought.
| do you not regard This plan. professor.
| as necessarily form Of paternaliSm?"
! NO. II Is the very thing that will save
! this country from paternalism. The
| railroads are the basis OF all Industries;
and if the people get a fair administra-
/ ton Of the railroads. the people viii get a
/ chance"
IN what sense. professor"
Railroad system, properly administer
/ ed, will do everything to spread Industry
( II the railroads only give every man an
equal chance. there will be found. after
all, not So much wrong in the old doc
/ trine OF competition. In short. In my
opinion. through governmental regulation
/ Of railroads you avoid things. And the
Hepburn act means control. The success
/ Of the present measure is vital In our
economic history
You dwell on the Importance Of the
new plan. The question. then. Is fraugIt
with great possibilities from an economic
/ standpoint? What makes you say this?'
/ Because. on the whole. the railr18d
/ business IS essentially public business
as much so. would say, as is the admin
( istration Of justice"
! What are some Of the probable results
/ Of The rate bill2" Prof Adams was asked.
/ First. 10 points In the direction q cen
/ Trailing responsibility on the higher Off
I ciaIs. The question. Who Is respCnsibleE
/ has in the past often been impossible 10
/ answer. There would be a change from
one point 10 another. but perhaps an in
/ Jermediate station gent would make a
n=w rate. The agent could MT be made
| TO say more than that he did il on Ju-
/ Jh0riJy.' The question on whose author
/ iJy will now be answered, for we have
/ the government back 0f the BILL
"WW it not be for the benefit Of stock
holders as well as the general public?"
Yes, the integrity Of the reports ought
/ 70 be guaranteed to the stockholders. The
reports ought 70 be regarded as a state
me7t Of facts. We propose to have re-
/ ports correct
Less Manipulation I'm Wall Str ct.
What will be The effect on Wall
streetT"
.'A,anipulations will be made more diff
/ cult So far as facts are made clear, YOU
always narrow the margin Of speculation
/ You get rid of the uncertain element
/ We must. though. make a distinction.
Wall street has a number Of phases
There is the Spectator. and there is the
undertaken Of legitimate enterprises, the
capitalist Il is the man who Is dealing
IN margins that IS going 70 be hit hard IN
Wall street. so far as his speculat!ons are
based on erroneous or misleading reports
IT railroad earnings. and all that sort Of
thing
Incidents Ike the recent phenomena
rise In Union and Southern Pacific based
( as I understand 1t. on information with
/ held from the stockholders. concerning
/ prospective dividends from accumulated
earnings. will become impossible.
And besides. there will be anoJhel
/ blessing RAJ. -Osd attorneys are not so
ing 10 have 30 large an opportunity e
use misleading information, in presenting
cases Al present. the average railroad
attorney will bring up any sort Of argu.
ment that he thinks viii win. even should
he know that what he says Is false
/ There VIII be less and less room fol
this fraudulent practice.
How about rebates? VIII they con
tlnue?"
THE bill provides machinery 70 DO away
with formal rebates. When the rebate:
60 through the accounts. we shall be
enabled TO detect the rebate"
u notice that YOU use the words for.
nal rebates. VIII you please explain
what distinction YOU are making
Nothing can get rid OF willful dis
elimination In particular cases. Our ma
chirery will have. though. a deterrent
effect on willful rebates. We hope to Sc,
the practice finally wiped out. but al
formal rebates concealed in the books
VIII be UneaTthed.
But, professor. may not the railroads
use memoranda not included In the &C.
counts7 That was the plan was il not
which aided in making possible the re-
cent financial frauds in life insurance.
Under the new act, the Interstat,
! Commerce Commission may. in its dis
erection. even prescribe the form of ans
and all railroad accounts including thC
movement Of traffic as well as The eX,
penditUTe Of moneys. Tie commission
has al al times immediate access TO &C
count books. The new act makes 1t IN
lawful for railroads 10 keep any &C
counts. records or memoranda other thar
those prescribed
Prof. Adams Figures Out Mail Cost
You viii agree. by this time, that Prof
Adams has genius for figures. For ex
ample some years ago. the question
OF q reasonable rate for carrying IN,
United States mail was before the com
mittee at Washington. What is It cost
ms us?'' was a question no one cOult
answer Senator ingalls, insisted thai