The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1908-01-18
why Hartman Must Answer.

a broad view Of the power of Congress
over the financial transactions of railroad
corporations and of the inquisitorial au-
thority of the Interstate Commerce Com
mission respecting such transactions Is
taken by Federal Judge Hough, who has
decided that f. II. Hartman must answer
the questions propounded by the commits
sion which he refused last spring to
answer. These inquiries related to Harri-
mans purchases Of Alton. Illinois Cen
trail, Santa Fe, and other railroad stocks
and the prices at which he turned them
over 10 the Union Pacific of which road he
is in absolute control AS Hartman was
on both sides of the various transactions,
il has been assumed that he and his friends
made large profits out Of Union Pacific
stock operations. In attempting to justify
Harrimans refusal to furnish information
asked by the commission. his counsel took
refuge behind the State rights doctrine
SO often invoked in behalf OF offending
corporations 1t was maintained that
Congress had no power to inquire into
the buying and selling Of stocks by a
corporation chartered under State laws,
and also that inquiry into such trans
actions had no relation TO interstate com
merce or TO any transaction of that com
merce
Judge Hough. however. finds that the
investment of immense sums of railroad
capital in the stocks Of other railroads
has very close relation with the efficient
performance Of the functions of "a COM
mon carrier, which it is the purpose Of
the interstate commerce law to promote
The matters under inquiry, he colds. are
relations practices. and methods of in
terstate carriers tending to defeat the pur-
poses Of valid Federal legislation I'M
prOvident and perhaps unlawful expendi-
ture Of assets tends to injure the carrier.
which may be crippled thereby and 50
rendered unable 10 perform the duties
imposed on it by law, thus defeating the
purpose Of the enactment Judge Hough.
moreover. holds that the management and
instrument OF railroad capital is as much
a commercial fundamentally as a loco
motive and that Congress has the same
power TO regulate It as any other instru
mentality of interstate commerce. Having
laid down these principles. Judge Hough
proceeds 20 "A larger subject over
which he thinks the power Of Congress
is ample. Congress. he thinks. may limit
Interstate operations of corporations not
complying with Federal safeguards
against the recurrence of obnoxious prac-
Tees" and may license those affording
TO the public security against the methods
calculated to diminish solvency. and
therefore efficiency and economy in In
terstate operation"
An interesting obiter dictum. surely. for
it indorses the Federal license plan so
much in favor among administration
officials, and points out a way by which
distinctions may be drawn between good
and bad railroads. Regulating wholly
the Hartman idea that railroad mag
nate can do as he pleases with his own
railroad, Judge Hough would have the
government limit the sphere OF his opera
tions and compel him to give bond to do
no wrong. It is a good Roosevelt deci-
sion. but has yet to run the gantlet of
the Supreme Court.