The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1916-01-12
CRIMINAL LAWS NOT EFFECTIVE.

LII " -
He is convinced that criminal laws
will never effectively control the mum
agement of corporations; and OF this
he finds convincing proof in the ac-
quittal of the majority OF the New
Haven directors.
While he was still a member of the
Interstate Commission Judge Prouty had
charge Of It's investigation Of the New
Haven system. He devoted many
months to IL. and Is probably as ia
miliar with the manibulations that
brought that system into its troubles
ss any man outside the management
that controlled the property at that time.
His conclusions from the investigation
were largely influential in determin-
ing that there should be criminal prose-
oution by the Federal authorities; 1t
was his opinion that, IL any experience
in corporate management ever jusu-
fed such a proceeding, that OF the
New Haven did.
Nevertheless, Judge Prouty was not
surprised at the failure OF the prose-
cution. He does not believe that crini-
nal laws can be written that will ac-
complish the purpose of regulating cor
porate activities by establishing PROM
billions and fixing penalties.
There are two systems OF corporation
regulation" he said todsy. One may
be called the judicial, the other the al
lninistratlve. The judicial system writes
laws prohibiting the things which may
not be done and fixing penalties. Inc
administrative system prescribes the
way in which a given thing may be
done, and says in substance, II you are
going TO do this, you shall do It thus
way: II YOU don't do 1! this way you
shall not do 1t at ALL
lew Can't Cover All.
"ThG system OF judicial regulation
attempts to enTmerate what are re-
carried as the vicious ways of doing
the thing, and TO prohibit them. The
trouble with IL. as shown by expert
ence, is that no legislation can pos
sibly be wise enough to enumerate
all the possible vicious methods. You
might prohibit all the proceedings Oy
which jaw Gould and Jim Fiske eN-
plotted railroad properties; all the
Objectionable plans OF Commodore
Vanderbilt and L.. II. Hartman. put
no sooner had you listed up and for
hidden all the familiar methods than
some new genius would come along
with a new way OF doing the thlnH,
and you would have Rock island
ar a Frisco or a New Haven case
the old thing done in a new way not
prohibited by your law. Ana II alter
Inc law had been amended to pro-
hibit repetition OF the offense in thls
form you would find another manipu-
lator inventing still another way.
You can't make the laws keep up
with the inventive genius or the peo-
pie who want TO do as they please.
Even when you get law that ap-
plies to a particular case, the criml-
nal features OF the law cannot be en-
forced. The American people don't
like to be regulated; they resent in
reference with them in managing
what they consider their OWE Dust
ness. Jurics do not convict men when
they arc going to be locked up under
this kind of laws: there is an instinc-
tive resentment against that sort or
interference with what are consider
ed individual rights.
History Proves Failure.
1.-THE whole history OF corporation
regulation demonstrates that this, ju-
dicial proceeding. of laying down
prohibitions and then, after the fact,
trying to punish violations OF them,
is a failure. More than forty years
ago the States undertook such ef-
forts. Kentucky had a pioneer law
providing penalties for ,extortion In
railway rates. and imposing penalties
on officers as we'll as on the corpora
ton. 1t and like laws proved inef-
am the regulation OF the railroads.
we are halfway between the judicial
and the administrative system. We
have practically taken away from the
railroads the power to make their
own rates, but we have not given that
power to any governmental authority.
For many years ! was opposed to
Government making OF rates.
thought the railroads should be per-
mitted to make their own rates, sub
ject to some review by higher au-
thority in behalf OF the public. But
FIVE or six years ago I became con-
WINGED that 1 had been wrong, and
that the Government ought to make
all the rates. It would not be any
such terrific task as has been imag-
ined and represented. If the power
were given to the Interstate Com
mission now, It would require merely
a gradual readjustment of the sched-
ules. which would not be revolution
airy in its effects.
Conflict Would Cease.
with that power once lodged in the
commission, there would he gradual
cessation OF conflict between the Fed
cral and the State authorities. We have
seen. in the matter of safety appliances,
an illustration of this. A State may re-
OuiTe for example. that all locomotives
shall have a particular sort OF head
light; and II can enforce that rule,
within its own borders. so long as the
Federal authority to regulate headlights
Is not exercised. But as soon as a con-
flicting rule Is made by the Federal au-
thoFtV II must be supreme, because a
locomotive Is an interstate AFFAIR; il
must be able to cross State lines and
the power over interstate matters Is
Fede raj whenever II Is exercised. The
same thing would be true OF rates. II
the Government made all the interstate
rates there would be an adjustment of
tho intrastate rates to the Federal
ones. that would presently largely do
away with the conflicts OF Jurisdiction
that now are constantly arising"