The sun., 1908-03-18
Lon q ths Flnance Committee to-day.'

founding proposition that Congress shall
hold out a legislation inducement for the eN.
action Of transportation charges which shal
net q continuous per cent, dividend on rail-
way capitalization II Ia idle to say that this
measure Ia limited In lis scope that II has
reference simply TO a limited issue Of railway
bonds as security He is blind indeed who
does not see the ultimate effect OF a propo-
sItion which directly or indirectly raises
standard for the payment Of a fixed dividend
upon railway capitalization without REGARD
to the value Of the property,
II is no answer TO say, az did the Senator
from Rhode Island In attempted reply to the
criticism Of the junior Senator from Mtchl-
gan, that the Government can demand ad-
ditionaI securities whenever railway bonds
are discredted for any reason, suppose,
sir. that il would be futile to make such de-
mand upon the banks which have pledged the
securities In question.
Mr.. La Toilette wanted TO know what the
Senators thought was the real purpose OF
working railway bonds into the currency
system Of the Government. Could any
plan have been devised. he asked, which
would be more effective In blocking the way
of legislation for valuation Of the physical
properties Of railW avs and defeating the
final reduction Of rates TO just and reason
able basisl
The Senator advanced the 'iew that the
panic was brought about by the system
when II feared that railroad rates would be
made reasonable Hesaid:
A false alarm was sounded The cry went
abroad over the land that the railways were
being crippled II was threatened that
railway building would come to a standStill.
The railroads were prepared TO accept any
temporary lOss resulting from giving the
public a good lesson II In the end they might
thereby save thousands of millions Of over
capitalization. They acted with decision
and despatch Train service was every
where curtailed. Freight was Sidetracked:
passengers compelled to suffer delay. incon-
venience and discomfort In travel. while
railway officials we're protesting through in
terviews and addresses AGAINST the great In
Jury inflicted upon transportation and all
other business by hostile and irrational legls-
lation
The little groups Of men who own and con-
troll the railways felt alarmed for the other
interests With which they were likewise ideu-
tined Ftar seized upon their coassoclates
In steel and copper aud coal allied, and alt
the consolidated organizations What would
happen 10 other Oyercapitallzed monOpoltes
II the railway earnings were based upon the
true value of the railway property Would
not the public further insist that Il was no
mere Just to require II to pay excessive prices
for iron and steel In order TO pay dividends
on two or three hundred per cent. Of water
than to require II to pay transportation rates
20 support eXtravagant overCapitallzat,on OF
railroads.
Taking the general conditions Of the coun-
try It Is difficult to ind any sufficient
reason outside of manipulation for the eX-
traordinary panic of October, 1907, The
agricultural production Of 1907 was little
less han 1908. but the prices were better.
1hr years business for the United States
steel corporation was larger in 1901 than Tor
any other year in its history,
The operating railroads Of the country
reporting to the Interstate Commerce Com
mission showed an increase In net earnings
Tor 1877 over 1900
The balance Of trade was with US The
excess Of exports over l9o6 was S5oO 900 OOO
There were no commercial reasons for
panic There were speculative, legislative
and political reasons why a panic might
serve special interests There were bust
ness scores 10 settle. There was legislation
to be blocked and currency measure suited
to the system TO be secured There was
third term to be disposed Of and policies
to be discrcdited.
Mr.. La Toilette made little ward picture
OF the panic itself and Of Mr. Morgan
and Standard oil giving away S25.OOO,OOO
in real money at 10 per cent, The
Senator eXcitedly attacked Mr.. Morgan,
indicating that Mr. Morgan was behind
the currency bill and that II the railroad
bond feature Of the bill had not been with
drawn it would lave given Mr. Morgan
and Standard Oil control Of the country
He charged that the banks
Of New York, which he said were controlled
by the Morgan end the Standard Oil groups,
were behind the bill.
This brought Mr.. Aldrch to his feet
with the statement that all the national
anks in New York were opposed TO the
bill He said that he had letter from
he New York Clearing House which de
clared that it was better TO have no bill
at all than the pending measure, and that
tie Clearing House preferred an asset
currency law. He said also that Vice
President ,Vanderip Of the National City
Bank had written to him in opposition
b. the bill
Mr.. La Toilette, shaking his head vigor-
ously. asked Mr.. Aldich how MIR Morgan
stood in regard to the bill i don't know,
said Mr.. Aldrich But should be greatly
eratifed il man Of his great business
ability, wide experience and clear headed
ness stood for this bill
To this Mr. La Toilette retorted with
sarcastic emphasis that perhaps in some
indirect way Mr.. Aldrich might be able TO
find out how Mr. Morgan stood Mr. Aid
rich said he supposed that Mr., La Toilette
would discuss the merits Of the bill and not
attempt to discuss from the standpoint
Of who was in favor Of it. and Mr., la
Toilette, with more head shaking, re-
sponded that you couldn'ttell from the lines
Of a bill what was in it, but were obliged