Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1907-03-25
Interstate Commerce Commits
sion Chairman Knapp Inclined
To Favor Federal Control.
THE STATES MUST GIVE WAY.
Their control Must be Subordin~
ated to larger One That Be-
longs to General Govt.
ReinSorporation of Railways Under
Act of Congress Would Tend 10 Pre-.
vent Improper Legislation.

Nhlcagp March 20, "A dispatch tn
the Tribune from Washington says:
Martin A. Knapp. chairman OF the
Interstate commerce commission in aa
inIervsw yesterday discussed tho
causes or Wall street distress, the
evils existing III railroad management,
and she remedies therefor. and ex,
pressed the opinion that the states
nave exceeded their constitutional
rights In some OF the anti-rallroad
legislation they have passed,
ASPECTS OF RAILROAD sr7rrrS.
TTON.
There are two prominent aspects
OF the present railroad situation. the
physical and the financial. Mr.. Knapo
said IN answer to a question: Tin tho
lirsl place. Its causes certainly are not
found III amy federal legislation enact.
ed or proposed, OF in the attitude or
intentions of che president Possibly
tne'e Is asl underlying reason for the
present wall street furry yvhca has
noI been perceived clearly.
Now, our marvellous prosperity has
induced such an extension OF activity
as has led to unprecedented invest.
ment plants, with the result that over
ana above the capital neees sary to
conduct the business for which theSs
plants are created we lack a surplus
for their enlargement Consequently
when the railroads so into the m arket
10 get the vast sums needed for that
Increase OF transp ortatjon facilities
which the country impcrativeIy de-
nIandE. they find active capital So
o. ,fV
get money for increasing the ntachin-
cry Of production without paying rates
Of interest which would be Il hardicap
tn the future, " not actually prchibi-
tive Somethlns Of that sort is the
cause Of the present ftnapCial sltua-
ton, more potent than generally is
taken into account.
In the second place, one OF the In
| cidents OF nousual prosperity is slte=
stl1nulotIs 1t gives 10 advan cling prices.
| which often reach abnormal and UNI
NArrantable levels.
FICTITIOUS VALUES.
In OTHER words. the boom in bust
ness worEsE out fictitious values. so
naturally and properly when a check
comes there is strong tendency for
quotations to ial down 40 the aver
age level, which represents true valua-
ton While, of course. the venture
some and speculative get hard hit
when such a setback caImes. stiIt ID
nlay be chat "A setback now and then
is In the interest of the country in the
long run.
DISCLOSURES OF RoTTENNEss.
Mr. Knapp was asked concerning
the effect OF the disclosures OF rotten
ness In corporate, including railroad.
com binations.
ut goes without saying lac said.
IA IT,
operations are followed by public re-
sentiment which often visits its relation
on the innoCent as we'll as the guilty.
Right here think we should take into
account the undoubted fact that ;he
public conscience has been aroused
from Its long letharGy and has become
sensitive. highly sensitive, 10 the NOR
al character Of conduct which In other
times would have been regarded with in-
difference. AS there can be- no great
good without some misfortune. so the
sharp awakening brings Its unpleasant
consequences But after all. Il indicates
a marked and encouraging elevation In
the standard OF public and private mot-
ais.
MOST DrFFIcULT PHASE,
Ito my mind the most serious ana
difficult phase OF tho situation, and the
greatest menace to the needed develop
ment Of our railroad systems IL the
hostile attitude &c the states Serious
trouble 5s 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 be sub
ordinated 10 that larger control which,
belongs TO the federal government. For
this reason ! have long believed chat
actual control by the national govern
ment. under well considered and work.
able laws. u control which satisdes
the demands or Interstate commerce.
viii tend strongly 20 restrain the leg
islatiye activities Of states within
proper limitations. II federal authority
Is feeble and easily cvaled attempts
constantly VIII be made To remedy de-
fects by state laws, often lll-consIreded
and drastic
MIR. Knapp was asked to- STAGE axplii--
lty exactly what remedy he had In
mind
THE GREAT REMEDY.
THE reinc0rporatIon % our railroads
under an act Of Congress" he said.
FOR some plan OF federal license such as
has been proposed, although It would
not liullt the actual power Of the states.
nevertheless, ms practical matter
would have a potent influence In pre-
venting improper legislation by the
states. and bring state Laws In harmony
with national laws. Moreover, / am In
clined TO anticipate such hdjudlca lions
by our supreme court as cases arise Ina
the future, as Well by the principles
announced and the authority upheld.
greatly restrict The practical Held oe
state control"