The Washington herald., 1907-05-31
CONTINUED FROM PAGE ONE.

ranted, btit required, by the facts; a suit
in the interest Of the people as q whole,
and In the long run. particularly in the
interest Of stockholders as we'll as in the
interest Of business men OF property gen
orally There can be no swerving from
The course that has thus been mapped
out IN the legislation actually enacted
and in the messages in which l have
asked for further legislation.
we best serve the interests Of the
honest railway men when we announce
that we will follow out precisely this
course II is the course OF real, OF ultl-
mate conservatism. There will be no halt
In the forward movement toward a full
development of this policy; and those who
wish us 20 take a step backward or to
stand still. II their wishes We're real
lied. would find that they had invited an
loutbreak Of the very radicalism they fear.
Would Control Capitalization.
There must he vested in the Federal
government a full power of supervision
and control over the railways doing inter
state business; a power in many respects
analogous 70 and as complete as that the
/ NEtlOndL
banks. 1t must possess the power to
exercise supervision over the future IS,
suance of stocks and bonds. either
through a national Incorporation (Which
/ should prefer or in some similar fash
ion. such supervision to include the frank
publicity of everything which would-be
investors and the public at large have a
right to know The Federal government
will thus be able 10 prevent all overcap-
italization in the future, 20 prevent any
man hereafter from plindering others by
loading railway properties with oblga-
tions and pOcketing the money instead OF
spending It in Improvements and in legiti-
mate corporate purposes; and any man
acting in such fashion should be held %
a criminal accountability.
Railroads should Not Speculate.
1T should be declared contrary TO pub
lie policy henceforth to allow railroads 10
devote their capital 20 anything but the
transportation business. certainly not 10
the hazards OF speculation. For the very
reason that we desire 10 favor the honest
railroad manager, We should seek 10 dis
courage the activities Of the man whose
only concern with railroads is 10 manipu-
late their stocks The business Of rail-
road organization and management should
be kept entirely distinct from investment
or brokerage business, especially OF the
/ speculative type and the cr<dit and prop
erty of the corporation should boz devoted
20 the extension and betterment Of its
railroads. and 20 the development Of the
country naturally tributary 90 the lines.
Rate Regulation Here to stay.
THE movement 10 regulate railways by
law has come TO stay. The people Of this
country have made mp their minds-aud
wisely made up their minds-to exercise a
closer control over all kinds Of public
/ service corporations, including railways.
Every honestly managed railway viii gain
and not lose by the policy. The men more
anxious % manipulate stocks than 20
make the management Of their roads eff
cient and honest are the only ones who
have cause to oppose it.
we who beliete in steady and healthy
progress stand unalterably for the new
era Of the widest publicity. aud of fair
dealing on the paI0 of railroads with
stockholders passengers, and shippers
Asks No VANS Consent.
we ask the consent of no man I'm car
rying out this policy: but we gladly well
come the aid OF every man in rerfecting
the law in its details. and I'm securing its
enactment and the faithful observance OF
its wise provisions.
"As a matter Of course. we shall punish
any criminal whom we can convict under
the law. but we have no intention Of con-
founding the innocent many and the
guilty few by any ill-iudged and sweep
ing scheme OF vengeance our aim is
primarily 20 prevent these abuses IN the
future. Wherever evil docrs can be. they
shall be. brought 10 justice, and no Crimi-
nal. high or low. whom We can reach viii
receive immunity.
To Spare Innocent Investors.
But the rights Of innocent investors
should not be ieoparded by legislation or
executive action; We sanction no legisla-
tion which would fall heavily on them.
instead Of on the original wrongdoers or
benehcia-ies Of the wrong
We wish to make it to the interest of
/ the investor 10 put his money into the
honest development Of the railroads. and
therefore we wish 20 discriminate against
the man who while enriching himself.
lays upon the future owners and patrons
Of the road and above all upon the honest
men whose duty IL may become 10 operate
the road. a burden of additional debt
without adding correspondingly to its ac-
tual worth.
Wild Talk About Capitalization.
There has been much wild talk as 10
the extent of the overcapitalizatlon Of
our railroads. The census reports on the
commercial value Of the railroads Of tho
country together with the reports made
to the Interstate Commerce Commission
by the railroads. on their cost of cOnstruc-
tion. tend to show that az a whole the
railroad property Of the country IS worth
as much as the securities representing
il. and that IN the consensus of opinion
of investors the total value of stock and
bonds is greater than their total face
value. Notwithstanding the water that
has been injected in particular places
The hugh value of terminals, the i'm
mense expenditures in recent years in
double tracking improving grades, road
beds, and structures, have brought the
total investments 10 a point where the
opinion that the real value IS greater
than the face value is probably true
Physical Valuation of Roads.
Ample provision should be made by
Congress to enable the Interstate Com
merce Commission, by the employment Of
a sufficient force Of experts, to under
! take the physical valuation of each and
any road in the country At the outset
let it be understood that physical valua-
ton is no panacea; 1t is no sufficient
measurement Of a rate; but it will be
= ultimately needed as an essential instru-
5 ment in administrative supervision. II
, will be of use to the commission in con-
] nection with the duty of determining
the rcasonableness Of future capitaliza-
ton.
Supervision Not Retroactive.
s'-Thn pffnnt Of cu0b valuation qDd c1Innr