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.VOLUME 7, NUMBER 1
4i,Yr?ic nwej
six millions and tlion Issued sovcnty-flvo millions
in bonds, It could control Uic railroads by holding
n little moro than thirty-eight millions of tho Se
curities company stock.
The supreme court, fortunately for tho coun
try, hold the Securities company an unlawful
combination, although the decision rests upon
rather an unsubstantial foundation, since the court
stood Jive to four. The death or retirement of one
of the majority may lead to a reversal of tho de
cision. If tho lltianeicrs were permitted to or
ganize holding companies like tho Northern Se
curities company and through them secure con
trol of railroad systems, they could, by organ
izing other holding companies to hold the stock
of tho tlrst holding companies, still further re
duce the amount of money necessary to exercise
n controlling Influence, until a comparatively fow
men with a relatively small amount of capital
could eqntrol tho entire railroad system of Uio
United Stales,
Tho plan embodied In tho Northern Securities
company had great possibilities for evil. Tho de
cision of the supremo court has thus far been a
protection against these new evils, and the peo
ple can secure legislative protection If tho deci
sion Is ever reversed. But It would be safer to
proceed at once with tho passage of a law Unit
would moke it unlawful for any corporation to
hold tho stock of another corporation. While
congress has no power to interfere wk.i state cor
porations so long as they contlno their operations
to tho stale of their origin, It Is within the scope
of tho powers of congress to prescribe the terms
upon which a corporation organized In any state
shall engage In Interstate commerce.
While Uio Securities company has been dis
solved, tin; three railroads are controlled by the
same group of men who would have controlled
tho Securities company, and this brings us to tho
second method of securing a monopoly, namely,
tho duplication of directorates.
This is one of tho most Insidious forms in
which tho tendency toward monopoly manifests
Itself. When the same men are -the directors of
different corporations it is not necessary that" there
shall bo any contract or even a "gentlemen's
agreement" among them. They simply manage
tho several corporations as if they were one. The
Investigations which have been conducted during
the past two years show to "What extent this plan
has been adopted among the lilgh iinanclers. Not
only is competition eliminated between railroads
by tho duplication of directorates, but tho compe
tition is suspended as between different Industrial
establishments engaged in the same general busi
ness. If, for Instance, tho leading watch compa
nies desire to avoid competition they can do so
without consolidation into one company and with
out agreement between the companies. All that
Is necessary Is for a group of men to purchase
a controlling interest In the competing companies
and then elect themselves directors of each com
pany. It Is a simple process and as effective as
it Is simple.
The insurance magnates adopted this plan
and used It to make an unlawful profit out of
trust funds. As directors of the insurance com
panies they were, of course, in duty bound to
manage tho trust funds for the benefit of tho
policyholders, but they organized banks, trust
companies and investment companies and as di
rectors of these companies dealt with themselves,
as directors of the insuranco companies. As di
rectors of tho oilier companies they made all that
they could for themsolves, considering, of course,
the close watch -which they kept over themselves
as custodians of trust funds. One must have un
limited faith in his own integrity to attempt to
act such a dual rolp if ho intends to do it hou
estly, and Uio public must have an unlimited
amount of credulity to allow men to deal with
themselves in such a manner,
oooo
IS THIS A CONVERT ?
The New York World is fighting the Ryan
tfelmout street railway monopoly, and is plead
ing for the construction of subways by the city,
the same to be operated by an independent line.
The World says: MOnly one course remains
open in the circumstances. Since tho city must
bear the cost of constructing new subways any
way, it should build such subways itself, inde
pendently of the merger. It can pay for tho
cost of constructing at least one Independent sub
Way out of the annual tax levy if necessary, and
it can find an Independent operator when tho
vork is finished. The city and' the public are one."
What is the difference between tho plan pro
posed by the "World and public ownerships of utili
ties in state or nation?
Tho World proposes that the city of New Torlc
po Into tho street railway business, at least that
is what Uio proposition amounts to when trimmed
of all its frills.
The Commoner.
Doubtless the World la so Impressed with. Uio
power and resourcefulness of the Ryan-Belmont
monopoly, and so discouraged by the result of
former efforts to obtain from that monopoly jus
Uco for tho public; that it realizes that some ma
terial change must be made in the old Ume meth
ods of protecting public interests.
It is plain that Uio World has reluctantly
reached Uiis conclusion, for it argues rather awk
wardly, although forcefully, in support of its new,
position.
Many others whose position on the general
question of public ownership Uic World lias con
demned were forced to Uieir conclusion by the
power and tho arrogance displayed by other
monopolies. Now that the World has had Uiis
same experience it may be willing to look moro
patiently upon those who believe in public owner
ship. OOOO
FRIGHTENED AGAIN
Thp New York papors are frightened again.
They have discovered a new issue they caught
it red-handed just as it was making its exit from
tho Brooklyn banquet after a savage attack on
the life of tho democratic party. It Is a double
headed monster which the scientists have classi
fied as Uic "initiative and referendum." Its pur
poso Is to put out of business Uie boss, Uie lob
byist and the trafficker In public trust. Of course
It Is obnoxious to subsidized papers and to the ex
ploiters of tho public who find fortunes In Uio
grabbing of franchises and In Uie watering of
stock.
After Uiese papers have recovered from tho
frenzy into which they were Uirown by Mr.
Bryan's remarks about the Initiative and refer
endum -some friend should call Uie attention of
their editors to the fact that the doctrine which
so alarmed them Is not new at all. It is already
in practical use, to a greater or less extent," m
nearly every state and Its application Is being
constantly broadened. The referendum is em
ployed in Uie adoptfon of constitutions and it is
being used with Increasing frequency in the issue
of municipal bonds and in Uie granting of -fran-'
chises.
Several states have so extended the use of
tho initiative nnd referendum as to secure H6 the
people tho right to sit In judgment on
legislative measure and- to compel Uie submission
of any question upon which they desire to act.
Maine will at her next elecUon vote upon the
adoption of the plan for "direct -legislation," as
this plan is called, and the New Jersey house of
representatives turned it down by n small ma
jority. Neither is it- a new subject with Mr.
Bryan. He has discussed it la. all parts of the
country, beginning more than ten years ago. It
was in the Nebraska platform in 1890:
"We favor the initlaUve and referendum sys
tem as an aid to securing a government of Uie peo
ple, for Uie people and by Uie "people.!'
It was in Uie democratic national platform
of 1000:
"Wo favor an amendment to Uie federal con
stitution providing for Uie .election of United
States senators by direct vote of Uie people, aud.
we favor direct legislation wherever practicable."
x Is this news to Uie newspapers of New York?
,We are gradually applying Uie fundamental
principles of our government to new conditions
and that application will continue.
, For one hundred years after Uie adoption of
tho federal constitution the people endured the
election- of United States senators by legislatures;
in 1802 the national house of representatives passed
for Uie first time a resolution proposing Uie amend
ment necessary to secure the direct election of
senators. fSince then the house has four times
more passed Uie same resolution and something
like two-thirds of the states have endorsed Uie re
form. It will come. And so will Uie initiative arid
referendum como in time, for "both the initiative
and referendum are in harmony with Uie theory
that Uiis -is "a government of Uie people, by tho
people and for tho people."
OOOO o
"REASSURANCE" NOT NEEDED
' ' Tn his Jamestown speech, Mr. Jtoosevclt, par
aphrasing Edmund Burke, said if he could not
reform with equity he would net reform at all,
there being "A state to preserve as well as a state
to reform."
Commenting upon this statement, Uie Wall
Street Journal says: "President Roosevelt wishes
td impress upon Uie country that his policy is
constructive and not destructive; Uiat- it is intend
ed to build up,rather than to tear down; and that
It Js' for Uie protection of property rather thau
for , its' confiscation.'1 " '
"The country" does not need Uie assurance that
In his proceedings against monopolies, Uie president
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means construction rather than destruction." "The
country" understands Uiat in' his attacks' upon
monopoly, Uie president has ' hut-, "scraped Uie
surface." :
Indeed, Mr. Roosevelt owes his popularity to
Uie proceedings he has taken against the special
interests. So far, then, as concerns' "the country,"
the only reassurance necessary is, that ' in tho
presence of the great evils brought about by pri
vate monopoly, tho president will keep his eye on
"a state to reform," that being, under -existing
circumstances, Uie one way of recognizing that
there is "a state to preserve" a state of govern
ment, of, by, and for the people.
Why does not the Wall street Journal, wiUi
its customary frankness, admit that it was Wall
Street Uiat needed Uie reassurance? , . .
Can It be possible Uiat Mr. Roosevelt's James
town speech is his answer to the many pleas, sent
him recently, that he undertake "to reassure the
country," and "restore confidence?" New York
newspapers tell us that typewritten copies of the
"reassurance features" of the president's address
were distributed In Wall Street for several days
prior to Uie delivery of the speech, and' Uiat Uiat
speech had been interpreted as showing that Mr.
Roosevelt has adopted "a more conservative pol
icy toward Uie railroads."
OOOO
THE DEMOCRATIC POSITION ' '
A Kansas democratic club asks The Commoner
to set forth brieily some of the reasons which can
be given by democrats for the support v.of their
party's position, and Uie request is cheerfully com
plied with.
First -The democratic party- believes in "the
theory of government set forth in the Declaration
of Independence, namely, Uiat governments derive
their just powers from the consent of Uie gov
erned. The party was formed by Thomas Jeffer- "
son, Uie author of the Declaration, of Independence,
and has ever borne Uie impress, of his'personallty.
While all parties have until recent years to a
greater or less extent given adherence to Uie doc
trine set forth in Uie Declaration of Independence,
the democratic party has differed from the parties
which liave opposed it In Uiat it has emphasized
Uio fact Uiat the representative is Uie servant of
Ids constituents, -while' the parties Uiat take Uielr
.inspiration from Alexander Hamilton regard Uio
representative as more or less independent of 'his '
constituents. It makes a great deal of difference
whether the public official reco.gnIzes it a3 his duty
to give expression to the wishes of Uiose who
elected him or considers himself a sort of superior
being elected to act for the people but not to be
controlled by them. The official who assumes Uio
right to disregard Uie wishes of those who lect
him strikes at the very foundation of popular gov
ernment. Second The democratic party believes In the
inalienable rights of the individual and zealously
guards those rights from infringement.. There are
individual rights sacred from. Uie touch even of
the majority, as for instance, the right to. life, to
liberty and to Uie pursuit of happiness, and Uie
amendments to the constitution have named free
, dom of speech, freedom of Uie press, and freedom
of Uie conscience as necessary to Uie preservation
of the inalienable rights of man.
Third The democratic party-Is the champion
of local self-government, believing that that gov
ernment is best which is nearest to the people and
Uiat Uie people can act most intelligently upon Uio
subjects with wliich they are most familiar.
,. Fourth The democratic party, believing In the
.inalienable rights of Uie Individual and in the
wisdom of local Eelf-government, insists upon re
spect being shown to the constitutional provision
which reserves to Uie states and to Uie people re
spectively the powers; Viot expressly delegated to
Uie federal government or denied to Uie states.
This balance pf powers between the state and fed
eral governments is essential to the life of tho
republic.
Fif Ui -The democratic party believes in the ex
ercise by the federal government of its delegated
powers in such a way as to protect Uie interests
of all' the people without giving favoritism to any
part of Uie country equal rights to all and spe
cial, privileges to none being Its motto. .
, --Sixth The democratic party, believing Uiat
governments rest upon the consent of the gov
erned,, is in favor of such improvements in the
methods of government as will make 'the govern
ment more directly responsible to Uie people and
more responsive to the will of the people, . It, nat
urally favors Uie election of senators by, .direct
vote of Uie people, Uie vdlrect primary-, and Uio
initiative and referendum. , , , ,
,$eycnUi7rin, .taxation Uie democratic, party' be
lieves, lafc.pp burdens ,of government should oe
' .collected In s.qqh a way that each cUIzenAvill Con
tribu'te in proportion to Uie benefits received un
der the protection of the government. Carrying -
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