Perth Amboy evening news., 1910-06-24
LIKENS STOCK
AND BONDS TO
THE LOTTERIES
sgsoLal by Unilea Pres. Rlrs.


Chicago, June 24-Declaring that
the reckless issue of railroad stocks
and bonds is as demoralizing to the
public as lotteries, Attorney General
Wickersham made an argument in
favor of federal regulation and con-
troll of all railroad issues, in an ad-
dress before the State Bar Associa-
tion here today. He contends that
such federal control was an essential
part of the governments supervision
of interstate commerce and present.
ed numerous quotations from Su-
preme Court decisions to support his
arguments. He discussed at length
the technical legal phases of the
proposition
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 to be
generally regarded as an evil, cer-
tainly as demoralizing In it's effect
upon the public as the carriage of
lottery tickets from one state to an
other. The twenty years period of
railroad receiverships and foreclos-
ures, the reports of which fill many
volumes of reports Of decisions of
the federal courts, testifies eloquent
ly to the practical effect of such un-
warranted issues of securities upon
the ability OF railroad companies to
properly.-perfoEm their functions as
instrumentalities of interstate COM
merce; while the utterance of stock
for inadequate or fictitious consider.
alton has furnished the opportunity
for the most irresponsible and specu-
lative control OF these highways of
commerce, and has resulted in tk1
injury which always follows q con-
troll of property by those who have
no real investment in 1t.
Such control, all experience
demonstrates, will not be generally
exercised in the interest of the road
and to insure such safe conservative
management as necessary to meet
the requirement of the public by the
proper discharge of the obligations
imposed upon the carrier by law. On
the contrary it is almost Inevitable
that such control be employed for
purely speculative purposes and to
secure immediate profit to those in
temporary control. 1t is this public
aspect which lends force to the con-
viction that 'watered' and bonus
stock is one of the greatest abuses
connected with the management of
corporations and it is this effect upon
the fitness of the carriers to perform
their duties under national legisla-
tion that requires and 1ustifies feder-
al supervision and control of the
subject"
The attorney general argued that
legislation to secure such control
was plainly within the constitutional
power of congress- He pointed out
that the extent of the obligations
which carrier might incur had
direct effect upon the determination
of the reasonableness of transporta-
tion rates, and that the work of the
Interstate Commerce Commission
would be greatly facilitated, II, be-
fore stocks and bonds were issued,
the consideration therefor were as
certained by the commission to be
full and adequate. "The great arte4
ries of communication" he conciud-
ed, - can be properly regulated in
the public interest by a central ma
tional power; which should be exer-
cised to correct every evil of public
character"