The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-03-26
CHAIRMAN KNAPP
GIVES HIS VIEWS
Interstate Commerce Commits
SiOner Says Some States Have
Exceeded Their Rights.
HARD TO GET CAPITAL
REASONS FOR WALL STREET
FURRY EXPLAINED.

chicago. March ga dispatch to the
Tribune from Washington SAYS:
Martin 4 Knapp. chairman OF the in
,srstate commerce commission in an in
teryiew yesterday discussed the causes of
Wall street distress. the evils existing in
railroad management. and the remedies
therefor. and expressed the opinion that
the states have exceeded their constitu-
fouaI rights in some - the anti-railroad
,scisatlo they have passed
There arc two prominent aspects OF the
present railroad situation. the physical
and the financial" Mr. Knapp said i'm
answer 10 n question. In the first place.
ms causes certainly are not found in any
federal legislation enacted or proposed. or
i1 the attitude or intentions Of the pTesi-
dent Possibly there is an underlying rca-
son for the present Wall street furry
which has not vet been perceived clearly.
Can't Get Capital.
Nov. our marvellous prosperity has in
duced such an extension of activity as has
led to unprecedented investment plants.
with the result that over and above the
capital necessary to conduct the business
for which these plants are created. we
lack q surplus for their enlargement. Con-
saqusntlv when the railroads go into the
market 10 get the vast sums needed for
that Increase OF transportation facilities
:.
they find active capital so profitably en-
Moved that they cannot get money for in
greasng the machinery of production
without paying rates of interest which
would be q handicap in the future. if not
actually VTOhibitive. Something of that
sort IS the cause of the present financial
situation, more potent than generally is
taken into account
Prices Soar Too High.
Tn the second place. one of the incidents
q unusual prosperity is the stimulus il
cges 60 advancing prices. which often
reach abnormal and understandable levels
ON other words. the boom in business
works ont fictitious values. so naturally
and properly when a check comes there
is a strong tendency for quotations to fan
down To the average level which repre-
sants true valuation While of course.
the ventUrasome and speculative get hard
Hif when such setbaCK comes. still il
may be that setback now and then is in
the interest Of the country in the LONG
TJ1-"
Mr. Knapp was asked concerning the
effect of the disclosures or rottenness in
corporate, including railroad, cOmbina-
tons.
1T goes without saving he said. that
the disclosures of discreditabIe opera tious
srs followed by public resentment which
often visits its retaliation on the innocent
rs we'll as the guilty. Right here ] think
We should take into account the uudOubt-
been aroused from its long lethargy and
has become sensitive. highly sensitive. to
The moral character Of conduct which la
other times would have been regarded
with indifference. As there can be no
great good without some misfortune so
the sharp awakening brings its unpleaSa
consequences. But after all, it indicates
marked and encoura ging elevation in
the standard Of public and private morals.
State Governments Hostile.
To my mind the most serious and diff
ficuIt phase of the situation, and the
ment Of our railroad systems is the hos
tile attitude of the states. Serious trou-
he is likely to arise unless by some means
l9ierably harmonious action as between
federal and state authorities can be
brought about.
~Manifestly, such control as the states
may continue to exercise must be sub
Wdinated TO that larger control which be
longs 10 the federal government. For this
reason I have long believed that actual
control by the national government. Un-
dsT well considered and workable laws. q
eHtrol which satisfies the demands of i'll
tsrsiate commerce. VIII tend strongly to
restrain the legislative activities of states
within proper limitations II federal au-
lhority IS feeble and easily evaded at
jemQtS constantly viii be made TO rem
cay defects by state laws, often ill-consid-
cred and drastic"
Mr. Knapp was asked TO state explicit
" exactly What remedy he had in mind
The incorporation Of our railroads
Under an act Of congress-. he said. ''Or
some plan Of federal license such as has
teen proposed. although il would not lin
Il the actual power of the states. never
iheleSs. as a practical matter. would have
a potent influence in preventing improper
legislation by the states, Sld bring state
laws IN harmony with national laws.
Moreover. 1 am inclined to anticipate such
applications by our supreme court as
cases arise in the future as will by the
principles announced and the authority
upheld. greatly restrict the practical field