The Richmond Virginian. (Richmond, Va.) 1910-1920, 1910-06-24
DECLARES ROADS
NEED REGULATION
Attorney-G General Scores
Methods of Issuing Watered
or Bonus Stock
SAYS
COULD PREVENT 1T
Shows How Control of Properties
is Not Properly Used
Injury of Specu-
lation.

CHICAGO. ILL. June 24.--Deciar-
ing that the reckless issue of railroad
stocks and bonds Is as d~emoralizing
to the public as lotteries, Attorney
General Wickersham made an argu.
ment in favor OF Federal regulation
and control Of all railroad Issues. in
an address before the State Bar AS
s~ociatton here to-day. He contended
that such Federal control was an es-
sential part OF the governments SUI
pervision OF interstate commerce. and
presented numerous quotations from
Supreme Court decisions to support
his arguments. He discussed at length
the technical legal phases OF the pro-
position.
Economists and courts alike" he
said, have condemned the reckless
issue of stock and bonds by railroad
companies without adequate consid-
Grafton, which has become 10 be gen.
orally regarded AZ an evil. certainly
as d~emoralizing in its effect upon the
public as the carriage of lottery tick
cts from one State to another. The
twenty years period of railroad re-
ceiserships and foreclosures, the re-
ports of which I'LL many volumes of
reports OF decisions OF the Federal
courts, testifies eloouently to the prac-
teal effect of such unwarranted is
sues OF securities upon the ability of
railroad companies to properly per-
form their functions as instrumental
ties of interstate commerce.; while
the ufterance OF stock for inadequate
or fictitious consideration kis fur
nished the opportunity for the most
irresponsible and speculative control
of these highways OF and
has resulted In the injury which al
ways follows o control of property
by those who nave no real Investment
IN 1t.
Need Regulation.
Such control. all experience dem
onstrates, will not be generally ex-
erctsed in the interest OF the road, and
TO insure such safe conservative man
agement as necessary to meet the re-
quirement Of the public by the proper
discharge OF the obligations imposed
upon the carrier by law. On the con-
trary, II Is almost inevitable that such
control be employed for purely spec
uiattve purposes. and to secure imme-
date profit TO those In temporary
control 1t Is this public aspect which
lends force to the conviction that
WatcTeu anu bonus StpCh Is one
OF the greatest abuses connected with
the management Of corporations, and
II Is this effect upon the fitness of the
carriers to perform their duties under
national legislation that requires and
justifies Federal supervision and con-
troll Of the subject"
The Attorney General argued that
legislation to secure such control was
plainly within the constitutional pow
err of Congress. He pointed out that
the extent of the obligations which a
carrier might incur had a direct ef-
feet upon the determination of the
reasonableness of transportation rates.
and that the work of the interstate
commerce commission would be great
ly facilitated II, before stocks and
bonds were issued. the consideration
therefor were ascertained by the com
mission to be full and adequate. THE
great arteries OF communication he
concluded. c be properly regulated
in the public interest by a central ma
tional power; which should be exer-
cised to correct every evil Of a pub
lie character"