New-York tribune., 1910-01-29
HOT DINNER DEBATE
OPINIONS DIFFER ON
RAILROAD CONTROL.
Commissioner Clements Talks
of "Scandalous Exploitation
Z. l.. Stetson' Reply.

Francis Lynde Stetson. president Of the
Economic Club, introduced Judson c.
Clement, of the Interstate Commerce
Commission, as the first speaker at the
clubs dinner, in the Hotel Astor last
night, and when Mr. Clements was
through declaring for effective govern
ment supervision of railroad corpora
tions, citing two instances of what he
called "scandalous exploitation by the
latter, Mr. Stetson replied in way
that brought an immediate uproar
Mr.. Clement struck blow at the Har-
riman syndicate, calling attention to the
Chicago & Alton case. in which stock,
funded debt. etc, of S34 100000 was ex-
panded to $114,61O,937, of which only
S1S,WOOOO was expended for improve
ments, leaving over S6O,0OO,O00 increase
of stock and liabilities without one dol
lar of consideration. In this transac-
ton, he said, the principal stockholders
voted themselves over $6,500,OOO, which
was never reported to the commission
Then he took up the Louisville &, Nash
Vile case. When j. p. Morgan and
Charles NJ. Schwab bought from John w.
Gates the control of the road the At
-lantic Coast Line agreed to take the
stock and to do so issued stock and
bonds of a little less than $4,000, 900.
Mr.. Clements said that this control was
obtained on an option acquired over
night He gave it as his belief that
while Mr.. Morgan said MIR. Gates was
not fit man to operate a railroad, he
foo hi .to
South.
Nj. Stetson, when Mr.. Clement sat
down and the one thousand persons pres
ent had stopped cheering, said that he
knew little about the Alton affair, but
knew all about the Louisville & Nash
Vile matter. He declared that he had
waited five years for a report from the
commission after its investigation but
none had been made up to the present
time. One Of the commissioners had told
him that the transaction was a moral
and an equitable one, he said. AS to a
remark made by Mr.. Clement that the
widows and orphans suffered through
these stock transactions he didn't believe
it. for the dividends had been paid regu-
larly.
There were ringing cheers, and Mr..
Stetson was about to introduce William
McCarroll, of the Public Service Com
mission, when there was a storm of cries
for an answer from Mr. Clement.
MIR CLEMENTS ANSWER.
DO you really want an answer" asked
the Commissioner.
Mr.. Stetson tried to rule that Mr.. Nc
Carroll should speak first, but the club
then and there demonstrated the power
Of popular control. Mr.. McCarroll
shouted above the uproar that he would
give way. and with reluctance Mr. Stet-
son called Mr.. Clement to the platform.
Mr.. Clement said:
I'VE made our report to Congress, en-
lightencd it regarding the whole Louis
vile & Nashville proceeding, and that
was the full extent of our powers. 1t
was for Congress to apply the remedy"
There was a quick response from the
audience. and when there was quiet Mr..
McCarroll came forward. and almost i'm
mediately came in conflict with Mr.
Clement who before his reference to the
two deals had favored more effective
federal control of public corporations,
that the books of corporations should be
omen to inspection by the government 10
nreyent rate favoritism, and had 1e-
clared that the issuance of stock meant
loss than nothing. He had also said that
railroads in the event that the commits
sion ordered rates lowered, would take
their overeapitalization into court as a
justification of higher rates. and ire