Los Angeles herald., 1907-10-24

CORPORA TON
CONTROL is
DISCUSSED
SETH LOW FAvORS LAWFUL
COMBINATIONS
FORMER MAYOR OF NEW YORK
GIVES VIEWS
Second Day Of Conference of Civic
Federation Is Devoted to Prob
lens Presented by Great
Business Enterprises

tion Of The Corporation. It's Construction
and Regulation"
The chief speakers on the program and
the subjects they discussed were as fol-
lows:
y. w. jerks Cornell university, "The
Trust Situation; Edgar A. Bancroft.
Chicago, Destructive Versus Regulative
Legislation; Isaac N. Seigman, New
York, THE Trust Problem" and Irving
Fisher, New Haven "Overcapitalization.'
In the afternoon the principal speakers
were Judge Grosscup of Chicago, who
discussed THE Construction of a Corr
roration"; Samuel Gompers. Frank B.
Kellogg of St. Paul aod e. e. Prussing.
A plea for the passage of law which
would permit combinations between rail-
roads, after the terms of their proposed
agreement had been submitted to the
interstate commerce commission and had
been approved by that body was made by
Seth Low, former mayor of New York, in
an address on National Control of Rail
roads" He believes that such agree
snents, II perfectly understood by the
public at the time of making-made with
the authority of the public and subject to
revision by the same authority in case of
need--may reasonably be expected 20
work In the public interest.
"It is the things that are done in secret.
without public knowledge and often with
out regard to the public interest. from
which the public suffers" said Mr.. Low.
"Jn an age like this, when the large
unit Is demonstrating its economy in
everything: when the steamships are
larger than ever beforei when locomo-
tives are more powerful than ever be-
fore: when every sort of combination in
mechanics is on a scale greater than ever
dreamed of In any previous epoch; 1t Is
not only idle to suppose that the indus
trial and transportation systems of the
country can be successfully conducted In
email units. but 1t is also manifestly to
the disadvantage of the public to try to
have them so conducted.
THE large corporation has demonstrated
it's efficiency and it's economy too strongly
to leave any room for doubt that in a
country like ours, If the people are to be
well served, there must be large COM
binations In the transportation service.
as elsewhere. The problem is how to
secure the benefit Of such combinations
without suffering the evils which they are
also capable OF developing.
THE only answer that has been sug-
gested, outside of government ownership
and operation, is governmental control;
and that control ought to be so devised
as both to permit and to encourage COM
binations and joint agreements between
railroads whenever these are In the pup-
lie Interest The two things that ara
necessary to make such regulation effec-
tive are. first of all, a recognition that
the railroad service of the country is
really part of the public service, al
though it is conducted through private
agencies; and, secondly, that the object
of governmental control of the private
sgeneies doing this business is not TO
limit their activities, but to make sure
that all their activities are conceived
first and last, in the public interest This
is really the characterization Of business. -,
Demands Of Small Investor
Mr.. Low said the small private In
vestor Hs coming more and more to de-
nand 6y railroad directors the same sort
of self abregation that the law demands
of a private trustee as toward his ward
The tremendous increase in the move
ment OF merchandise has so far out
stripped present facilities that the rail-
roads themselves and the public as we'll
want them to enlarge. but the rail-
roads find it difficult to get the neces-
cary money" said Mr.. Low. "and the
public will not furnish it. Back Of all
this there lie two influences which GER
tainly have to be reckoned with. The
plain man understands that business en-
terprises and good service are entitled
to fair earning.
What he does not understand is in
what respect railroad business so far
differs from any other business that
those upon the inside can honestly and
honorably become muti-millionaires while
those upon the outside so often find
themselves the owners of worthless
stock. He observes that the directors of
savings banks do not become rich In a
day. He suspects, therefore, that the
many millions OF the few have, in many
cases, been made at the expense of those
for whom these few have been trustees
He thinks that there has been in railroad
boards of directors a widespread loss OF
the sense of trusteeship. The law allows
a trustee reasonable compensation, but
1t does not allow the personal enrich
ment OF the trustee at the expense of the
ward. Hence the demand for government
control on the side OF railroad fnancier-
ing.
Ask Equal Treatment
1.-THE demand heard in some quarters
that railroads shall belong to the gov
ernmenL and be operated by the govern
ment presumably does not spring from
any special desire to have the govern
ment do this business directly, instead of
through private agencies, but 1t springs
principally from the notion that in no
other way can railroad service be
STAMPED with the public quality that
meansAabsolutel equality OF treatment of
big and little shippers and big and little
places
Personally, do not believe that public
ownership or public operation are either
the only ways or the best ways to OBJ
tain the desired results. 1t rests very
largely with railroad directors and man
ayers themselves, whether the country is
driven into pubic ownership and opera
tion of the railroads. At the same time
If the private management of the rail-
roads is to be indefinitely continued
government regulation both of railroad
finances and of railroad service is abso-
1utely essential. 1t may be taken for
granted that the public will insist, un-
ceasiI giy, or having the public quality
OF equal treatment for all predominate
in all the relations OF the railroads to the
public as distinguished from the busi-
ness quality Of discrimination on the
basis OF the volume OF business. Gov
eminent regulation may indeed lead to
the non-production OF multi-millionaires
as a by-product Of railroading, but II
ought also to mean, to investors, in
creasingly safe returns.
''Who Shall Regulator"
"But regulation by law in the United
-.