Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1910-06-25
LIMITATION OF
ISSUES OF STOCK
Atty.-Gen. Wiokersham Vigorous.
ly Defends Power OF National
Government to LegisIate.
TENDENCY IS TO CENTRALlzE


Chicago, June 2f--Iu a vigorous de.
Tense NJ the power Of the national gov
eminent 10 legislnte on the subject Of
the issuance OF stocks and bonds by
railroad corporations subject 10 the in
tDrstota commerce act. Atty.-Gon.
George w. Wickcrsham spoke for an
hour this morning before the Illinois
state Bar association. m, basis for
his talk was the provision lon the new
railroad law authorizing tho president
10 investigate questions pertaining 10
the issuance of stocks and bonds by
railroad corporations and the power of
Congress to regulate them The enact
ncnt OF such "a law, ne cOutCnGcd. was
not nearly so radical a step as was
the enactment of the Uermissive act Of
lSGC which gave to 20 railroad corpora.
ton of one state the right 20 carry on
interstate commerce, or the Interstate
commerce act OF lSS1 The attorney.
general pointed out that opposition had
been made % every progressive meas.
ure OF commerce regulation.
CENTRALIzING TENDENCY.
but" he declared, In closing his
speech. the Ccntrullzing tendency has
gone steadily on ana the control of
Congress over interstate railroad com
panics has been exercised i'm an in-
progress is inscparable from growth.
The great arteries OF communication
between different parts Of the country
ana the iustrumentIliti'z which con-
troll their operation can only be proper
ly regulated I'm the public interest by
the central national power-a power
which is sovereign, which IS exclusive
when exercised. and which should be
exercised TO correct every evil of a
public character which experience
demonstrates to De susceptible Of cor
rection only by national legislation
Numerous legal authorities were cited
by the attorney general. from which,
he declared, 1t may confidently be as
serted that while Congress may itself
create corporations for the purpose Of
carrying ON interstate commerce. it
may also prescribe rules and rcgula-
tons under which corporation 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 tho rules and regulations So laid
down by Con gress; and that these rules
may have reference not only To the eX-
change of goods and commodities. but
to the subject, the vehicle and tho
agent Of such commerce.. and their va
rious operations.
RECKLESS STOCK ISSUES
Reference was made by Mr.. Wicker
sham 10 the condemnation, both by
courts and economists. OF the reckless
issue Of stocks and bonds by railroad
companies without adequate consider
alton, which. he declared, had come To
be generally regarded as an evil GER
tainly as demoralizng in its effect on
the public as the carriage OF lottery
tickets from one state to another
The 2O-years' period OF railroad re-
celVerships and foreclosures, testified
elouuently, he declared, to the practical
effect OF such unwarfanted issues OF Sc
curities upon the ability Of railroad
companies TO properly perform their
functions as instrumeutaltties Of inter
state commerce; while the utterance or
stock for inade,, uate or fictitious con-
sheraton had furnished the opportun-
itv for the most irres ponstble ana
speculative control Of these highways
OF commerce and had resulted in the
injury which always followed control
of property by those who had no real
investment in II. Such control, MT
Wickersham continued, al experience
demons trated, would not be generally
exercised I'm the interest Of the road.
and to insure the safe, conservative
management necessary To meet the
requirements Of the public ana the
prouor discharge of the obligations I'M
posed upon the carrier by law. On the
contrary. II was almost inevitable That
such control would he employed for
purely speculative purposes and 10
secure immediate profit TO those IN tenn
poyHry control
WATERED STOCKS.
II was this public aspect which lent
force to the conviction that "watered
and bonus stock WIS one OF the
greatest abuses connected win me
management OF corporations aud IL was
this effect upon the htness OF the car
riers 10 perform their required ana
Justified federal supervision and con-
troll Of the subject .,-
The attorney general admitted that the
federal government could not CONFER ON
"a state corporation power 10 o"IIo"
money and issue obligations 'he''ioi'