The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-03-25
Thinks They Have Gone Too Far
in Railroad Legislation.
LEAVE TO UNCLE SAM.
Federal COntrolThrOugh License
System Is the Remedy.
Expects Supreme Court to
Straighten Out the Situation.

the Tribune from Washington says;
Martin A. Knapp, chairman OF the
interstate commerce commission, in
an interview, discussed the causes OF
Wall street distress, the evils existing
in railroad management, and the rem
edies therefor, and expressed the opln-
ion that the states have exceeded their
constitutional rights in some Of the
anti-railroad legislation they have
passed.
There are two prominent aspects
of the present railroad situation, the
physical and the financial" Mr..
! Knapp said in answer to a question.
I'm the first place, its causes certainly
are not found in any federal legisla-
ton enacted or proposed, or in the
attitude or intentions of the president,
Possibly there is an underlying reason
for the present Wall street furry
| which has not been perceived clearly.
Our marvellous prosperity has In
| duced such an extension OF activity
as has led to unprecedented invest
ment plants, with the result that over
and above the capital necessary to
conduct the business for which these
plants are created we lack a surplus
for their enlargement. Consequently
when the railroads go into the mar
ket to get the vast sums needed for
that increase of transportation facfl-
tiles which the country inperatively
profitably employed that they can not
get money for increasing the machin-
cry of production without paying
rates of interest which would be
handicap in the future If not actually
prohibitive. Something of that sort is
the cause of the present financial sit
uation. more potent than generally is
taken into account.
"In the second place, one of the in
cidents of unusual prosperity is the
stimulus it gives to advancing prices,
which often reach abnormal and I'M
warranta bic levels.
"In other words, the boom in bust
ness works out fictitious values, so
naturally and properly when a check
comes there is a strong tendency for
quotations to fall down to the average
level, which represents true valuation
While, of course, the venturesome and
speculative get hard hit when such a.
setback comes. still it may be that a
setback now and then is in the inter-
est of the country In the long rum"
Mr.. Knapp was asked concerning the
effect of the disclosures of rottenness
in corporaticns,i including railroad combi-
nations.
TT gives without saying" he said.
that the disclosures of discreditable
operations are followed by public re-
sentiment which oftens visits it's retali-
alton on the innocent as we'll as the
guilty. Right here, ! think We should
take into account the undoubted fact
that the public. conscience has been
aroused from it's long lethargy and has
become sensitive, highly sensitive to the
moral character of conduct which in
other times would have been regarded
with indifference. AS there can be no
great good without some misfortune, so
the sharp awakening brings its I'M
pleasant consequences But after all, 1t
indicates a marked and encourag ing
elevation in the standard of public and
private morals. e-~
ITO my mind the most serious and
rNho 1F b. cit 4l,a
greatest menace to the needed develop
ment of our railroad systems is the
hostile attitude of the states. Serious
trouble is likely to arise unless by some
means tolerably harmonious action as
between federal and state authorities
can be brought about
"Manifestly such control as the
states may continue to exercise must |
which belongs to the federal govern |
ment- For this reason 1 have long be- |
lieved that actual control by the ma
tional government, under well consid- |
cred and workable laws, a control |
which satisfies the demands of inter |
state commerce, will tend strongly to |
restrain the legislative activities of |
states within proper limitations If |
federal authority is feeble and easily |
evaded. attempts constantly will be |
made to remedy defects by state laws, |
often ill-considered and drastic
Mr. Knapp was asked to state ex-
plicitly what remedy he had in mind. |
THE re-incorporation of our rail- |
roads under an act of congress-" he |
said, cor some plan of federal license |
such as has been proposed, although |
1t would not limit the actual power /
OF the states. nevertheless as a prac- |
teal matter would have potent infu- |
ence in preventing improper legisla- |
ton by the states, and bring state laws |
into harmony with national laws
Moreover 1 am inclined to anticipate |
such adjudications 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 of state control"
It's a good plan not to give away
your horse till you have your automo-