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-AUGUST 7, 1908
The Commoner.
9
MR, TAFT'S speech of acceptance
. ' . . Following arc extracts from Mr. Taft's
. speech of acceptance delivered at. Cincinnati,
. July 28:
"I am deeply sensible -of the honor which
the republican, national convention has con
ferred on me in the nomination which you for
mally tender. I accept it with full appreciation
of the responsibility it imposes.
"Gentlemen, the strength of the republi
can cause in the campaign at hand is in the
fact that we represent the policies essential to
the reform of known abuses, to the continuance
of liberty and true prosperity, and that wo are
determined, as our platform unequivocally de
clares, to maintain them and carry them on.
For more than ten years this country passed
through an epoch of material development far
beyond any that ever occurred in the world be
fore. "In its course certain evils crept in. Some
prominent and influential members of the com
.munity, spurred by financial success and in their
hurry for greater wealth, became unmindful of
the common rules of business "honesty and
fidelity and of the limitations imposed by law
upon their action. This became known.
"The revelations of the breaches of trust,
the disclosures as to rebates and discrimina
tions by railways, the accumulating evidence of
the violation of the anti-trust law by a number
of corporations, the overissue of stocks and
bonds on interstate railways for the unlawful
enriching of directors and for the purpose of
concentrating control of railways in one manage
ment, all quickened the conscience of the peo
ple and brought on a moral awakening among
them that boded well for the future of the
. country.
"The man who formulated the expression
of the popular conscience and who led the move
ment for practical reform was Theodore Roose
velt. He laid down the doctrine that the rich
violator of the law should be as amenable to
, restraint and punishment as the offender, with-
.,,o(u wealth and without influen-e, and he pro
," ceeded by recommending legislation and direct
ing, executive action to make that principle good
in. actual performance.. He secured the passage
of the so-called rate bill, designed more effec
tively to restrain excessive and fix reasonable
rates and to punish secret rebates and dis
criminations which had been general in the
practice of the railroads, and which had done
- ,much to enable. unlawful trusts to drive out of
business their competitors.
, "It secured much closer supervision of rail
- way transactions and brought within the oper-,-
ation of ' the same, statute express companies,
sleeping car companies, fast freight and refrig
erator lines, .terminal railroads, and pipe lines,,
and forbade in future the co bination of the
transportation and shipping husiness under one
control in order to avoid undue discrimination.
"President Roosevelt directed suits to be
brought and prosecutions to be instituted under
the anti-trust law, to enforce its provisions
against the most powerful of the industrial
corporations. He pressed to passage the pure
food law and the meat inspection law in the
interest of the health of the public clean busi
ness methods and great ultimate benefit to the
trades themselves. He recommended the pass
age of a law, which, the republican convention
has since specifically approved, restricting the
future issue of stocks -and bonds by interstate
railways to such as may be authorized by fed
eral authority.
"He demonstrated to the people by what
he said, by what he recommended to congress,
and by what he did, the sincerity of his efforts
to command res'pect for the law, to secure equal
ity of all before the law, and to save the coun
' try from the dangers of a plutocratic govern
ment, toward which we were fast tending.
"In this work Mr. Roosevelt has had the
support and sympathy of the republican party,
and its chief hope of success in the present
controversy must rest on the confidence which
the people of the country have in the sincerity
of the party's declaration in its platform, that
- it intends to continue the policies.
"Mr. Roosevelt has set high the standard
of business morality and obedience to law. The
" railroad rate bill was more useful, possibly in
1 the. immediate moral effect of its passage than
even in the legal effect of its useful, provisions.
"' From its enactment dates the voluntary aban
- donment -of the practice of rebates atid discrim
inations by the railroads' and the return by
their managers to obedience to law in the fix
ing .of tariffs.
"The pure food and meat Inspection laws .
and the prosecutions directed by the president
under, the anti-trust law have had a similar
moral effect in the general business community,
and have made it now the common practice for
the great industrial corporations to consult the
law with a view to keeping within its provi
sions. It also has had the effect of protecting
, and encouraging smaller competitive companies,
so that they have been enabled t6 dp a profitable
business. .
"But we should be blind to the .ordinary
working of human nature if .We did not recog
nize that the moral standards seUby President
Roosevelt will not continue to be observed by
those whom cupidity and a desire for financial
power may tempt, unless the requisite ma
chinery is introduced into the law which shall
in its practical operation maintain these stand
ards and secure the country against a departure
from them.
"The chief function of the next adminis
tration, in my judgment, Is distinct from and a
progressive development of that which has been
performed by President Roosevelt. The chief
function of the next administration is to com
plete and perfect the machinery by which these
standards may be maintained, by which the law
breakers may be promptly restrained and pun
ished, but which shall operate with sufficient
accuracy and dispatch to interfere with legiti
mate business as little as possible.
"Such machinery Is not now adequate.
Under the present rate bill and under all its
amendments the burden of the interstate com
merce commission In supervising and regulat
ing 'the operation of the railroads of this coun
try has grown so heavy that it is utterly im
possible for that tribunal to hear and dispose,
in any reasonable tinie, of the many complaints,
queries and issues that are brought before it
for decision. t
"It ought to be relieved of Its jurisdiction
as an executive directing body, and Its' func
tions should bo limited to the quasi-judicial in
vestigation of complaints by individuals and by
a department of the government charged with
the executive business of supervising the Opera
tion of railways.
"There should be a classification of that
small percentage of industrial corporations hav
ing power and opportunity to effect Illegal re
straints of trade and monopolies, and legisla
tion either inducing or compelling them to sub
ject themselves to registry and to "proper pub
licity regulations and supervision of the depart
ment of commerce and labor.
"The field covered by the industrial com
binations and by the railroads is so extensive
that the interests of the public and the Interests
of the businesses concerned can not bo prop
erly subserved except by reorganization of
bureaus of the department of commerce and
labor, of agriculture, and the department of
justice, and a change in the jurisdiction of the
interstate commerce commission. It does not
assist matters to prescribe new duties for the
interstate commerce commission which it is prac
tically impossible for it to perform, or to de
nounce new offenses with drastic punishment,
unless subordinate and ancillary legislation shall
be passed making possible the quick enforce
ment in the great variety of cases which are
constantly arising, of the principles laid down
by Mr. Roosevelt, and with respect to which only
typical instances of prosecution with the pres
ent machinery are possible.
"Such legislation should and would greatly
promote legitimate business by enabling those
anxious to -obey the federal statutes A- know
just what are the bounds of their lawful action.
The practical constructive and difficult work,
therefore, of those who follow Mr. Roosevelt
is to devise the ways and means by which the
high level of business integrity and obedience
to law which he has establshed may be main
tained and departures from it restrained with
out undue interference with legitimate business.
"It is agreeable to note in this regard that
the republican platform expressly and the demo
cratic ' platform Impliedly approve an amend
ment to the Interstate commerce law, by which
interstate railroads may." ,raake useful traffic
agreements rif approved by ,the. commission'. .This .,
has ' been ' strongly recbrnrm'erided by President
Roosevelt and will make for tho benefit of
business.
"Some of the suggestions of the democratic
platform relate really to this subordinate and
ancillary machinery to which I havo referred.
Take, for instance, tho so-called 'physical valu
ation of railways.' It is clear that tho sum of
all rates or receipts of a railway, less proper
expenses, should be limited to a fair profit upon
the reasonable value of its property, and, that
Jf the sum exceeds this measure It ought to be
reduced. Tho difficulty in enforcing tho prin
ciple is in ascertaining what Is the reasonable
value of the company's property, and in fixing
what Is a fair profit.
"It is clear that the physical valuo of n
railroad and its plant is an element to bo given
weight in determining its full value; but as
President Roosovolt in his Indlanupo'Is speech
and the supremo court have in effect pointod
out, the value of the railroad as a going con
cern, Including its good will, due to efficiency
of service and .many other circumstances., niav
be much greater than the val..o of its tangiblo
property, and it is the former that measures tho
investment on which a fair profit must bo nl
lowed. Then, too, tho question what Is a fair
profit Is one involving not only tho rate of in
terest usually earned on normally safe invest
ments but also a sufficient allowance to make up
for tho risk of loss both of capital and interest
In the original outlay. These considerations will
have justified the company in imposing charges
high enough to secure a fair income on tho on
' terprise as a whole. The securities at market
prices will have passed Into the hands of subse
quent purchasers from the original Investors.
"Such circumstances should properly affect
the decision of the tribunal engaged in deter
mining whether the totality 'oj rates charged
is reasonable or excessive. To ignore them
might so seriously and unjustly impair settled
values as to destroy all hope of restoring confi
dence and forever to end the Inducement for
investment in new railroad construction, which,
in returning prosperous times, is sure to bo
essential to our material progress.' -
"As Mr. Roosevelt has said in speaking of
this subject:
" 'Tho effect of such valuation and supervi
sion of securities can not bo retroactive. Ex
isting securities should bo tested by laws In
existence at the time of their issue. This na
tion would no more injure securities which havo
become an important part of tho national
wealth than It would consider a proposition to
repudiate the national debt.' v
"The question of rates and the treatment
of railways Is one that has two sides. The
shippers are certainly entitled to reasonable
rates; but less is an injustice to the carriers.
Good business for the railroads is essential to
general prosperity. Injustice to them is not
alone injustice to stockholders and capitalists,
whose further investments may be necessary
for the good of the whole country, but it direct
ly affects and reduces the wages of railway em
ployes, and indeed may deprive them of their
places entirely.
"From what has been said the proper con
clusion would seem to be that in attempting
to determine whether tho entire schedule of
rates of a railway is excessive, the physical val
uation of the road Is a relevant and important
but not necessarily a controlling factor.
"I am confident that the fixing of rates on
the principles suggested above would not ma- .
terially Impair the present market values of
railroad securities in most cases, for I believe
that the normal Increase in the value of rail
road properties, especially in their terminals,
will more than make up for the possible over
capitalization in earlier years. In some cases,
doubtless, it will be found that overcapitaliza
tion is made an excuse for excessive rates, and
then they should be reduced; but the concensus
of opinion seems to be that the railroad rates
generally In thls-country are reasonably low.
"This is why, doubtless, the complaints filed
with the interstate commerce commission against
excessive rates are so few as compared with
those against unlawful discrimination In rates
between shippers and between places. Of course,
in the determination of the question whether
discrimination is unlawful or not, the physical
valuation of the whole road is of little weight.
"I have discussed this.wjth some degree of
detail, nerely, to. point out, that the valuation
"tContinued on Pago 12)
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