The Birmingham age-herald., 1907-08-20
TAFT OPENS HIS CAM-
 PAIGN FOR PRESIDENCY
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 ~~~-~-~--~~~~-~---~-~ in the matter of transportation between themselves and their competitors in an outside business. The new law makes radical changes in the matter of the pub llcaton of rates Under the old law, by means of what was called the midnight tariff" railroad company gave favored shippers advance information of a con templated reduction of rate and immedi- ately restored the old rate when these shippers had profted by it. Thirty days notice is now required of any change in the rates unless the commission. for good cause, modihes the requirement.
 Amendments to Bill Needed.
 The rate law does not go far enough. The practice under 1t has already disclosed the necessity for new amendments and will doubtless suggest more. Such is the true method-the empricial and tena- tive method-of securing proper remedies for a new evil. The classification of mer- chandise for transportation Is a most important matter In ratefixing for by a transfer from one class to another, the rate Is changed and may work injustice. With the power of rate fixing, 1t would seem, should go the power in the com mission to classify and to prescribe rules
 
 roads.
 Prevent apitalzaton.
 Recent revelations have emphasized the pernicious effect of the socalled over-cap- | italization of railroads which aids un- scrupulous stock manipulators in dispos- ing of railway securities at unreason- ably high prices to innocent buyers. This evil would not of itself justify federal restraint or control because such stock and bonds are usually issued under state charters. The practice, however has a tendency to divert the money paid by tho public for the stock and bonds which ought to be expended in improving the road bed. track and equipment of rail- ways into the pockets of the dishonest manipulators and thus to pile such an un- profitable debt upon railway as to make bankruptcy and a receiVership probable in the first business strlngency. This result in interstate railway, necessar- fly interferes with, and burdens. inter state commerce. and justifles the exercise of the regulatlve power of congress to stop the practice. A railroad company engaged in interstate commerce should not be permitted, therefore, to issue stock or bonds and put them on sale in the market except after certificate by the interestate commerce commission that the securities are issued with the approval of the commission for legitimate rail road purpose The railroads that are honestly conducted would accept the cer tlfcate of the commission as a valuable one in the markets of the the world and only railway stock manipulators who look to the floating of watered securities as their best source of profit, would have reason to complain
 Against Purchase of Stock.
 much used means of eliminating competition among interestate lines serv- ing the same territory is the recqulsition by one company of the stock In an- other and the election of directors to rep resent that stock This process is faclli- tated by the uncontrolled power to issue securities beyond the needs of the com pany for its legitimate business and would be curbed by the restriction pro- posed The evil ought further to be di- rectly restrainer by making it unlawful for an interstate railway to acquire stock in a competting line. This Is simpler remedy of meeting the evil than by re- course to the anti trust law under the Northern Securities case. In addition to this competing lines should be prohibited from having common directors or of- flcers.
 Amendments Constitutional
 These suggestions of additional legisla- ton in respect to the supervision and control of interstate railways have been made by the interstate commerce com- mission and I heartily concur in them. They are plainly within the federal juris- dicton under the interstate commerce clause. I do not think that in order to accomplish a good which the federal government with its greater resources and wider geographical reach can bring about more quickly and efficiently, the constitu- tonal limits upon federal action should be blurred out or an undoubted federal power should be expanded by doubtful construction into field which really be- longs to the state. But the right or cong