The Birmingham age-herald., 1907-11-14

inquisitorial powers to regulate the divi- dends of state railroad corporations?"
 Power of Commission.
 The interstate commerce act he said, authorized the commission to elicit such information as would aid them in dis charging their duties in the enforcement of the act. Taking up one of the ques- tions put to MT. Hartman, Mir. Spooner said:
 Let it be assumed that Mir. Hartman had answered that question and had stat ed that he owned stock that was sold to the company. is that interstate commerce, is the question that an agent or director has violated his duty as director in any sense interstate commerce?"
 Could Congress pass a law prohibiting a director of a company from dealing in stocks? It Is inconcevable that matter of trusteeship between q private corpora ton and one of its body can be made the subject of inquisition by an admin istrative body of Congress.
 Tn the event of loss could Congress have made restitution? Is it not state matter? The state could punish, while Congress and the commission could not"
 keloga's Argument.
 The final argument of the prosecution was made by Frank B. Kellogg, special counsel to the commission in the Harri- man case. He had not proceeded far when interrupted by Judge Hough, who asked:
 Isn't it true A[r. Kellogg, that while the commission is not required to limit the scope of it's inquiry did it not as a matter of fact begin its inquiry in this case by q special order?'
 ''As to that, your honor" replied the attorney. 'the authorities have held that a congressional committee need not limit itself to the subject matter of resolu- ton of inquiry but may go SIS far as it pleases, so long as it keeps within the power of Congress to investigate"
 "Another thing, Mr. Kellogg querled Judge Hough, lis 1t not a fact that the commission was given full information as to what stocks were purchased by tho Union Pacific and what prices were paid for them, and is it not also true that the questions which were not answered had merely to do with whom they were bought from and how much profit was made by the person who sold them?"
 Commissions Probing.
 In reply to this, MT. Kellogg said that for 15 years the interstate commerce eom- mission had been Investigating matters which were not clearly delegated to it by Congress. These investigations and resultant recommendations had borne lIull III tIe ulEsolullOn or one NHSL ll- legal railroad merger in the enactment of the safety appliance law, the en- ployers' liability law and lastly the ques- ton of rebates
 Another reason for this inquiry is to ascertain whether this stock was sold to the Union Pacific in a bona fide way, for what 1t was actually worth or whether 1t was sold for, speculation by a pool. The gentlemen on the inside are fond of saying these stocks were sold at their market value. This means their value as quoted in Wall street. Who makes that value? The very circles of men who pooled their money and bought the stock.
 Matters such as this become a proper subject of inquiry in considering the ques- ton of rates, which the interstate com merce commission certainly has the right 10 regulate. In like manner we have a right to inquire if the 10 per cent diYi- dend suddenly declared by the Unon Pacific company was justified from the earnings or whether it was purely a speculative dividend to enable certain persons to manipulate stocks and reap enormous profits.
 Santa Fe Gobbled.
 "One of the questions NIr. Hartman declines to answer was as to whether or not block of S30,000,000 of stock in the Santa Fe railway was held by II. IT, Rogers and II. C. Prick, two Union Pacific directors. Here is vital issue. MT. Hartman admits that the Union Pacific has not the right to control the Santa Fe because 1t is competing sys- tenn, but your honor. what is the diff ference between the company itself own ing the stock and two directors owning and using it to suppress competition.
 "As a matter of fact. there is now no competition between the Santa Fe and tho Union Pacific and all other roads