Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1910-06-25

cised, and which should be exercised to
correct every evil OF a public character
which experience demonstrates to be sus-
ceptible Of correction only by national leg
islation."
Legal Authorities Cited,
Numerous legal authorities were cited by
the attorney general from which he de-
clared it may confidently be asserted that
while congress may itself create corpora
tions for the purpose of carrying on in
terstate commerce, it may also prescribe
rules aud regulations under which cor
poration created by the laws of state
may conduct such commerce, and that
when Il does so such state corporation
might engage only in such commerce In
conformity with the rules and regulations
so laid down by congress; and that these
rules may have reference not only to the
exchange of goods and commodities, but
to the subject, the vehicle and the agent
of such commerce and their various
operations.
Reference was made by Mr.. Wickersham
to the condemnation, both by courts and
economists, of the reckless issue of stocks
and bonds by railroad companies without
adequate consideration, which, he declared
had come to he generally regarded as an
evil, certainly as demoralizing in its effect
on the public as the carriage of lottery
tickets from one state to another.
Too Many Unwarranted Issues.
The twenty years period of railroad re-
ceiverships and foreclosures, testified elo-
Quently, he declared, to the practical eff
feet of such unwarranted issues of Sc
curities upon the ability Of railroad COM
panies to properly perform their functions
as instrumentalities of interstate commerce;
while the utterance of stock for inadequate
or fictitious consideration had furnished
the opportunity for the most irresponsible
and speculative control of these highways
of commerce and had resulted in the in
Jury which always followed a control OF
property by those who had no real invest
ment in it. Such control, Mr., WickeTsham
continued, all experience demonstrated,
would not be generally exercised in the in
terest of the road and to ensure the safe
management necessary to meet
the requirements of the public and the
proper discharge of the obligations i'm
posed upon the carrier by law. ON the con-
trary It was almost inevitable that such
control would be employed for purely spec
ulative purposes and to secure immediate
profit to those in temporary control.
1t was this public aspect which lent force
to the conviction that 'watered" and
bonus stock" was one of the greatest
abuses connected with the management
of corporations and 1t was this effect upon
the fitness of the carriers to perform their
duties under national legislation that re-
ouired and justified federal supervision and
control of the subject.
The attorney general admitted that the
a state corporation power to borrow money
and issue obligations therefor, nor TO Gre
ate and issue shares of stock. Only the
power which erected the corporation could
vest it with authority for these purposes.
But" he contended. under all the rules
and analogies, to which reference has been
made, congress assuredly may regulate
and restrain the state corporation In the
exercise of these as we'll as of other cor
porate powers, and may prohibit 1t from
issuing obligations or stock for any pur-
pose relating to interstate or foreign com
merce except In accordance with rules and
restrictions prescribed by It for the pur-
pose of preventing the evils above referred
to.
Relation of state Corporations.
I'm that respect the national government,
On agency of interstate commerce, may
subject it to the same regulations with
respect to the means OF raising money
for the purpose of carrying on such COM
merce as 1t could impose upon a corpora
ton OF its own creation. The end is leglti-
mate, viz. the regulation OF interstate
commerce; 1t is Within the scope of the
THE means suggested are appropriate
to correct an evil which has had In tine
past a very real effect upon the ability
Of these instrumentalities to carry on
commerce among the state in conformity
with rules and regulations constitutiOnally
established by congress, and the means
are plainly adapted to that end. On rea-
son and on authority. therefore. such
legislation is within the scope OF the con-
stitutlonal power OF congress"
1t was contended that state corpora
tion availing Of the powers conferred by