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.


TO national eminence has been slow He
! received his degree IN 1874. at Iowa Col
lege. then went 10 Germany and returned
/ 10 apply the German idea OF Original
/ research. He mas been a lecturer al
Johns Hopkins and for a quarter Of q
! century has been teaching political econ
| omy al Michigan University Public
| Debts is perhaps his best volume. buI ne
is also the author Of Taxation tn INC
United States. Science Of Finance.
State In Relation TO Industrial Educa-
/ ton. Statistics of Railroads.. Eco
nomies and Jurisprudence.
When Prof Adams came back from
/ Europe. years ago. he was one Of grour
/ ot radical young fellows whose minds
were swayed by emotional fervor for the
sc'-called poorer classes The remedy was
10 be something that bordered on State
! socialism. In the fullness OF ume the
radicals lived 70 shade their opinions
but Adams was long a hard fighter. He
often rsn counter 20 the Chronicle
the high priest OF finance. and many a
/ hard whack did Adams receive he was
among The FIRST 10 recognize that there
are businesses. especially the natural
monopolies. that must eventually be con.
trolied. al least regulated. by the Federal
government
From al that I could learn. was
unable 10 md that Prof Adams has add
co anything new 10 the study Of eco
nomlc theory but 10 him credit Is due
/ II large measure. for his stimulating In
huence on The great question Of cor
porate regulation. He early saw that
by It's very nature the railroad business
must become a matter of national con-
cerp; and while his radical theoris
called forth much hostile criticism, Prof.
Adams lived 70 see the day when MS
. early writing became. II not accepted.
al least verified by common thought
DO you not regard this plan. professor.
as necessarily form Of paternalism? ,"
NO. Il 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-
tion Of the railroads. the people viii get a
chance"
In what sense. professor
Railroad system. properly adm Mister
ed, viii de everything 70 spread Industry
II the railroads only give every man an
equal chance. there viii be found, after
all. not So much wrong IN the old doc
trine Of competition In short. in my
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 fraug1 I
with great possibilities from an economic
standpoint What makes you say this?'
Because. on the whole the railroad
business is essentially d public business
as much so. I would say. as is the admin
istraJiOn Of justice"
Wv hat are some Of the probable results
% The rate biu2" Prof. Adams was asked
First. il points IN the directi IN Of cen
Trailing responsibility on the higher off,
ciaIs The question Who is responsibIe2 p
has in the past often been impossible 70
answer. There would be a change from
one point 10 another. but perhags an in
Jermediate station 4Ee7t would make a
new rate. The agent could MT be made
10 say more than that he did Il on 8u-
thOriiy.' The question on whose author
ity viii now be answered. for we have
the government back Of the bill
''Will IL 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 bs regarded as a state
me7t Of facts. We propose TO have re-
ports correct"
Less Manipulation in Wall Str et.
What will be the effect on Wall
straeJT"
'A.anipulati0ns viii 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. It IS the man who Is dealing
In margins that Is going 10 be hit hard ~
Wau street, so tar as his speculatiOns are
baseG on erroneous or misleading reports
n railroad earnings and all that sort Of
thing
Incidents Ike the recent phenomena
rise IN Union ard Southern Pacific. based
rs 7 understand it. on Information with
held from the stockholders. concerning
prospective dividends from accumulated
earnings. will become impossible,
And besides. there will be another
blessing. Railroad attorneys are not 60
ing TO have so large an opportunity to
use misleading information. in presenting
cases Al present. the average railroad
attorney will bring up any sort Of argG-
ment that he thinks viii win. even should
he know that what he says Is false.
There VIII be less and less room for
this fraudulent practice"
How about rebates? Will they con
tince?"
The bill provides machinery to do away
With formal rebates. When the rebates
60 through the accounts. we shah be
enabled 10 detect the rebate"
Il notice that YOU use the words FOR
nal rebates. Win you please explain
what distinction YOU are making"
Nothing can get rid OF Williul dis
elimination In particular cases Our ma
chirery will have. though. a deterrent
effect on willful rebates. We hope to see
The practice finally wired out. but al
formal rebates concealed In the books
Will be Unearthed "
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."
"Cnder the new act, the Interstate
Commerce Commission may in it's dis
erection. even prescribe the form of any
and all railroad accounts including the
movement Of traffic a well as the ex-
penditUre Of moneys. Tpe commission
has at al tines immediate access 10 ac-
count books. The new act makes Il IN
lawful for railroads TO keep any ac-
counts. records or memoranda other than
those prescribed g"
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 a reasonable rate for carrying the
United States mail was before the COM
nlitiee al Washington. What is il cost
ing us2 was question no one could
answer. Senator Ingalls, insisted that
the cost was something like 1854 a ton.