The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-06-25
Acknowledgement Wickersham
Discusses Questions of Con-
trolling Corporations.
WOULD HAVE GOVERNMENT
WATCH STOCKS AND BONDS
Power of Congress to Regulate
Issue of Securities Is Earn
estly Advocated.


eminent to legislate on the subject Of the
issuance of stocks and bonds by railroad
corporations subject to the Interstate
commerce act Attorney General George
W. Wickersnam spoke for an hour this
morning before the Illinois stsfe Bar ihe aSs
provision in the new railroad law au-
thorizing the president to investigate
ebaGnFb by to raSoad shs
tions and the power OF congress TO reg
ulate them. The enactment of such a
law. he contended. was not nearly SO
the permissive act OF 1866. which gave
to a railroad corporation OF one state
nerce. or the Interstate commerce act act
of 1887. The attorney general pointeo
out that opposition had been made TO
every progressive measure OF commerce
regulation,
Capitalization Keynote.
But" he declared. in closing his
speech. ''the centralizlnS tendency mas
gone steadily on. and the control OIL corr
gress over Interstate railroad companies
has been exercised in an increasingly
comprehensive manner Such progress IS
inscparable from growth. The great
arteries OF communication between az III,
ferent parts of the country and the m
strunentalities which control theis
operation can only be properly regulated
in the public interest by the central ain, ma
which Is exclusive when exercised. and
which should be exercised to correct
every evil OF a public character which
experience demonstrates to be suscepu-
BILE OF correction only by national lesis-
lation."
Numerous legal authorities were cited
by the attorney general. from which. ne
declared 1t may confidently be asserted
that while congress may itset creale
corporations for the purpose OF carving
on Interstate commerce. II may also
prescribe rules and regulations uhuer
which corporation created by the la"S
Of state may conduct such commerce.
and that when 1t does so. such state cor
poratton might engage only In such com,
nerce in conformity with the rules ana
regulations so laid down by congress ana
mai these rules may have reference not
only to the exchange OF goods ana com CON-
moditIes, but TO the subject, the Vehicle
and the agent OF such commerce. ana
their various operations
Evil of Bond Issues.
Reference was made by Mr.. Wicker
sham 10 the condemnation both ey
courts and economists. of the reckless
issue Of stocks and bonds by railroad
tion. which, he declared. had come to
be generally regarded as an evil Ger
tainly as demoralizing in its effect on the
public as the carriage OF lottery tiokets
from one state to another.
The twenty years period of railroad
receiverships and foreclosures. ;estifed
cloquently. he declared, to the practicai
effect OF such unwarranted issues OF Sc
curites upon the ability OF railroad COM
NAMES to properly perform their func-
fions as instrumentalities or Interstate
commerce, while the utterance OF stoci
for inadequate or fictitious consideration
had furnished the opportunity Tor the
most irresponsible and speculative controi
OF these highways OF commerce ana hea
resulted In the injury which always iol-
lowed a control Of property by those who
had no real investment In IT Such con-
troll. Mr.. Wickersham continued, all eX-
perience demonstrated. would not be
generally exercised In the interest OF the
road, and 10 insure the safe. conserva-
tive management necessary to meet the
er discharge OF the obligations imposed
upon the carrier by law. On the con-
trary. IL was almost inevitable that such
control would be employed Tor purely
speculative purposes and to secure i'm
mediate profit TO those in temporary
control.
Where Control Is Needed.
II was this public aspect which lent
force TO the conviction that 'watered
and bonus stock was one OF the great
ment OF corporations and IL was this ef-
feet upon the fitness of the carriers to
perform their duties under national leg
islation that required and justified fed
eral supervision and control OF the
subject.
the federal government could not confer
on a state corporation power 70 borrow
money and issue obligations therefor nor
TO create and issue shares Of stock Only
the power which erected the corpora
tion could vest it with authority for
these purposes.
"Bui." he contended, under all the
rules and analogies, to which reference
has been made, congress nssuredly may
regulate and restrain the state corpora
tion in the exercise OF these as well as
hibit II from issuing obligations or stock
for any purpose relating to interstate
or foreign commerce except in accord
rr3t a.
scribed by It for the purpose OF pre-
venting the evils above referred to.
Not for State Rights.
'In that respect the national govern
ment, having adopted the state corpora
tor as an agency OF interstate commerce,
with respect to the means Of raising
money for the purpose Of carrying on
a corporation OF It's own creation. The
end Is legitimate, namely the regula-
tion Of interstate commerce. 1t Is with
In the scope of the constitution.
THE means suggested are appropriate te
to correct an evil which has had in the
past a very real effect upon the ability
commerce among the states In conformity
with rules and regulations constitutionalIy
eTsanshnG 1anTv BY congress- and the means
legislation is within the Scope scope o Of S1ht ihe
constitutional power OF congress"
II was contended that a state cornor
alton availing Of the powers conferred
BY congress became thereby sub
jcct In these respects In which Congress
had legislated: to all the conditions and
limitations imposed by congress on The
exercise OF these powers. as completely
as though they we're written into the
charter OF such corporation
Again, the amount OF stock which a
carrier corporation might issue and the
extent of the obligations which II might
incur. had a direct effect on the detern,i-
nation OF the reasona bleness of rates OF
Interstate transportation.
The enactment OF a law regulating the
issue OF stocks and bonds by railroad
companies. Mr., Wickersham insisted
certainly went no further than the act,
regulating the ownership and evolution OF
interests In ships employed In interstate
or foreign commerce. and involved nc
principle so new and startling as the
acts regulating the hours Of labor OF EN-
ployes. the relations between the rail
road companies and their employees. o
OF the act OF congress prohibiting rail
road company carrying from one stat,
to another, pursuant to power vested fl
IL by the state of its creation. com
lit. IA