The Montgomery advertiser., 1907-09-19
PENITENTIARY
 IS SUGGESTED A Better Punishment
 Than Fines. R, ,SSEvELT POLICIES LAUDED Henry Cews Addresses Bankers Association in Kentucky. Discussed Existing Financial Condi- tions and Says that -Extravagant
 Chicago Fine is Responsi-
 bIe for All Uneasiness.

Louisville. Ky, Sept. 1s.-A plea for the punishment by Imprisonment of dishonest corporation officials and a protest against the tendency in certain quarters to attribute the recent de- cline in the stock market to President Roosevelt's policies were made by Henry Clews of New York, In an ad- dress before the Kentucky Bankers Association here today. Mir Clews took for his subject, The Situation" and discussed existing conditions in the financial world at considerable length. He expressed the opinion that the administrations expressed inten- tion to criminally prosecute the men guilty of Illegal practices in the man. agement of stock companies, will prove benefit instead of a detriment to the country's business affairs.
 MT. Clews, in the opening portion of his remarks, reviewed the events in the stock market during the past six months. A crisis had been impending for long time, he said. but the trou- ble did not become acute until the fine of $29,240.000 was imposed on the Standard oil Company of Indiana. Then the speculative mi1lionaires who had been trying to engineer an upward movement in stocks found themselves overloaded, and they began to sell out at whatever prices they could obtain. Thus, with support withdrawn there was a sharp decline in prices of secur- ities, the chief sufferers being the best and highest-priced stocks.
 ''The apprehension excited among in- vestors and speculators by that $29,- 24o.0o0 fine." said Mir. C1ews, did an immense amount of harm through the enormous losses to which 1t led. In combination with the prosecution of the Southern Railway by Southern States. involving the conflict between North Carolina and Alabama and the United States courts, that extravagant fine, so suggestive of opera bouffe, was the immediate cause of the heavy liquidation that produced the August market into a storm center. Although there was no probability or even poy- sibility of this fine ever being collected from a million-dollar corporation, even if Affirmed on appeal. public senti- ment was about as much disturbed as if it were ultimately collectible. By creating, although without sufficient reason, fear of confiscation 1t led to those enormous sales and sacrifices of stocks by investors, as well as by spec ulators, and the virtual panic that lasted those two long and memorable weeks.
 Suggests Imprisonment.
 'The innocent thus suffered with the guilty. and the evil effect of such fine was clearly demonstrated by a very severe and disastrous object lesson. The true remedy for relating and other wilfulI violations of law is not to be found in the infiiction of heavy penalties on the guilty corporations, but on the responsible and guilty of fcers of those corporations, and not alone by fine but imprisonment. Heavy fines inflicted on corporations fall finally on their stockholders through a corresponding loss of dividend-paying power, and the lowering of market prices for their stocks. The proper remedy is punishment behind iron bars.
 "As the stockholders are in no way responsible for deltnqutnoies in management, 1t Is unjust to make them suffer the consequences of these. It should, therefore, be the future policy of both the Federal Government and the States to punish corporations for illegal practices by criminal proceed ings against those in their employ, who are found to be responsible for them. Thus punishments will be con- fined to the guilty, and confidence will be restored among investors, for such prosecutions would in no way tend to depreciate the value of the stocks and bonds of the corporations concerned. but on the contrary they would tend to enhance their value by promoting honest management.
 "Stimulated by the country's enor- nous prosperity during the last few years we have gone ahead too fast in all kinds of new and costly con- struction work and Improvements. We have in fact, gone ahead regardless of expense, and railway and manufactur- ing corporations have stretched their credit, in too many instances, almost to the breaking point. Meanwhile the railways have been overtaxed with traffic and manufactories overrun with orders for their product. and they still are so, notwithstanding all the much discussed and confidently predicted falling off in trade.
 through over-taxing their capacity, their working capital and their credit. to keep up with it, the national pros- perity has proved two-edged sword to many corporations as well as in- dividual firms, and the greed for ex- cessive profits among them led to much of the corporate dishonesty, H. legal acts and methods, and wholesale graft in high places, which we have seen exposed These excesses and ir- regularities are now being corrected.
 Severe Public Criticism.
 'NJo wonder that their exposure, from lime nublic confidence, and kept in- vestors from buying stocks, and turn ed their attention and speculative en- ternrise in other directions, and into otber channels. These exposures and violations of law naturally aroused severe public criticism and indigna- tion, and called for investigation by the Federal Government In this Presi dent Roosevelt took the lead for the nnrnose of correcting mal-administra- ton, the abuse of power and the H. legal practices that had been exposed.
 Tt was far from his intention to disturb public confidence among the Stockholders of the railway and other corporations that, through their of- ficers, had been guilty of illegal and fraudalent acts. particularly relating. His object was by extirpating abuses to secure honest and lawful methods of management. and so protect and benefit investors in bonds and stocks. and secure justice and equality for shippers of produce and merchandise an uiAh the rates for