The sun., 1907-08-20

after certificate by the Interstate Com.
! merce Commission that the securities are
iesued With the approval Of the commission
! for n legitimate railroad purpose. The
railroads that are honestly conducted wouli
accept the certificate OF the commission as
| valuable one In the markets OF the world
and only railway stock manipulators who
look to the floating OF watered securities
as their best source OF profit would hav e
reason to complain.
AMENDMENTS AGAINST PURCHASE or STOCK
IN COMPETING LINES AND AGAINST COMMON
DIRECTORS.
A mlrch used means OF eliminating COM
| petition among interstate lines serving the
same territory is the acquisition by ons
company OF the stock in another and the
election OF directors TO represent that stock.
This process 10 facilitated by the unoon-
trolled power to issue securities beyond
the needs OF the company for its legitimate
business and would be ourbed by the re-
TO be directly restrained by making 1t un-
lawful for an interstate railway to acquire
stock in a competing line. This is a simpler
remedy OF meeting the evil thanby recourse
Securities case. In addition to this, COM
peting lines should be prohibited from
having common directors or officers.
PROPOSED AMENDMENTS PLAINLY CON-
sTrTUftoNAL.
These suggestions Of additional legislation
in respect to the supervision and control
OF interstate railways have been made by
the Interstate Commerce Commission and
heartily concur in them. They are plainly
within the Federal jurisdiction under the
interstate commerce clause. 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 constitutional limits upon Federal action
should be blurred out OF an undoubted Fed
eral power should be expanded by doubtful
construction into a field which really be-
longs 20 the State. But the right OF Con-
gress to take any action, not confiscatory
In the mort rigid control OF interstate COM
merce cannot be denied.
SUGGESTED BY HARTMAN coNsoLIDArIoNs
The measures taken and proposed are
radical perhaps, viewed from the stand
point OF the tdissex foire doctrinaire whose
ideas have been allowed to prevail in re-
spect OF railroad management down TO the
present; but no one can read the report OF
the commission on the history OF the union
OF the Southern Pacific and Union Pacific
systems with the Illinois Central system
without trembling at the enormous power
that one man, by the uncontrolled used of
the stock and bond issuing power Of inter-
state railways under State charters. has
acquired in respect OF a vital power OF the
country's business and without looking for
some means Of remedying such a dangerous
tendency which, IL not stopped, will lead 10
the absorption of all the railroads of the
country into one hand
RATE BILL AND PROPOSED AMENDMENTS NOT
socrALIsrIc. But THE OPPOSITE.
The contention on behalf of the railroads.
already noticed. that such supervision as
the rate bill and these suggested amend
ments afford is socialistic and tends 10
Government ownership is utterly without
basis Efficient regulation is the very
antidote and preventive of socialism and
Government ownership. The railroads
until now have been permitted To WELD
without any real control the enormously
important franchise OF furnishing trans
portation to the entire country. They
have constructed 100000 miles of roa d.
In certain respects they have done a mar
vellous work and have afforded transporta-
ton at a cheaper rate per ton, per mile and
per passenger than in any country in the
world. They have, however, many of
them. shamelessly violated the trust obliga-
ton they have been under to the public of
equal facilities at the same price |
to all shippers. The watering of stock !
and bonds and the overcapitalization Of |
some Of them for the profit Of their man
ment Of their railroads in construction and !
The tremendous demand for |
increased facilities due to the enormous |
growth of business shows the inadeguacy !
of their equipment and construction While |
they might not have been expected to
meet in full such an eX ira ordinary demand, |
the obligations some of them have assumed |
in the form OF stocks and bonds leave no
doubt that had the money they represented
been put into the roads in good faith the
shortage of cars and equipment and made
quacy OF roadbed and track would not
he so great. They discharge a public func-
ton. They have been weighed in the bal
lnce and found wanting. The remedy for
The evils must be radical TO be effective.
II il is not so. then we may certainly ex pect
hat the movement toward Government
ownership will become a formidable one
hat cannot he stayed.
OBJECTIONS TO GOVERNMENT OWNERSHIP.
1 am opposed TO Government owner
ship
First, because existing Government rail-
ways are not managed with either the
or economy of privately man
Iged roads and the rates charged are not
Is low and therefore not as beneficial TO
ne public.
St tcond, becaus, it would involv. an ex-
)endture' of certainly twelve billions OF
iollars to acquire the interstate raiiways
md the creation Of an enormous national
iebt.
Third, because it would place in the
hands Of a reckless Executive a power Of
,ontroI over business and politics that
ne imagination can hardly conceive and
would expose our popular institutions to
ianger.
'RoPosED RAILWAY REGULATION NOT INCoN-
sIsTENT WITH INDIvIDUALIsM
The supervision proposed need not ma
erially reduce the legitimate operation
4 individualism in railway enterprise
{ will indeed limit the opportunity to ac-
umulste enormous fortunes through over
apitalIzation or secret rebates, but the !
legitimate profit which comes from close
ttention to operation, to efficiency of
ervice and economy in details and from
road conceptions OF new methods Of re-
ucing cost without impairing the service
'iIl not be disturbed in the slightest. There
no. attempt to take away the property
{ the railway companies: there is no fur ,
ishing OF public money TO the enterprise
nd no public officers are required 20 adj
linister the property There is no more
tempt in this law 10 make ira nsportation ,
Government business than there is in ,
ne national banking act to making bank
,g a Government business. {
AvoRs RAILWAY RATE AGREEMENTS II
SUBMITTED TO AND APPROVED BY INTER
STATE COMMERCE COMMISSION. q
The movement of competing railway
ompanies to consolidate arose originally
-om fear that the antitrust act forbade 1
hem to make agreements as to uniform
ariffs. II they we're now permitted TO
lake such agreements subject TO the APP
roval Of the Interstate Commerce Com
,iaeion atIch a fRndancv would Ioaa t,,,ch / :