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G6? Nobraslio. Indopcndcrrt
JULY 27, 1905
denounced as a thief he will endure public disfavor with' more or
less equanimity, hut when he is punished as a thief he will cease
to look upon thievery as a desirable occupation. The deterrent
effect of such punishments will' be even a more potent protection to
the public. If it be made clear that all who enter illegal combina
tions must pay the penalty in prison few will wish to take the
risk of forming a trust.
The Looinis anti-combination law provides that prosecutions in
the first instance shall be started by the county attorneys and shall
be taken up by the attorney general on appeals. It is likely, there
fore, that Attorney General Nor ris Brown will refuse to prosecute
criminally at the instigation of the Farmers' Co-operative Grain
and Live Stock State associatitn. The circulation of petitions de
manding that tho attorney general shall take aetion may, therefore,
prove futile, but this should not discourage those who seek to bring
ti justice violators of the anti-trust law. Let them demand that the
prosecuting attorneys in the various counties take the necessary
steps to punish the corporation culprits. ' The farmers' organiza
tion is said to have 103 locals. If this is true most effective work
ought to be possible through these locals. A general fund would
doubtless be necessary, but each local could use such portion of it as
should bo required. Criminal proceedings ? will place a much
lighter tax upon the members of the organization than will civil
suits, for the counties will, of course, be forced to bear the expense
of criminal prosecutions. Such expense, however, can be well en
dured by the counties if it results in the overthrow of a monopoly
that extorts a tax from every farmer. ,
A
FALSE BOAST OF THE BUREAUCRATS
'Already the railway bureaucrats are boasting that their cam
paign of education has triumphed and that restrictive legislation has
been "headed off." If the fallacies, misrepresentations and threats
the literary bureaus employ have lulled to 'sleep the agitation for
railway regulation which seemed so general the triumph is a mighty
one and cannot be exaggerated. But is it not possible that the
bureaucrats have been deceived by surface signs ? Are they not count
ing too much on the case with which the people have been hood
winked in the past ?
r The friends of railway regulation, while admitting that they
are, in for a hard fight, are not lacking in confidence. They have
kept the people well' informed as to the character of the literary
bureaus, "and cannot believe that any great number have been de
luded by railway arguments. So far as the senate of the United
States was concerned the railways did not need any campaign of
education. In the millionaire's club all that was needed was a cam
paign of persuasion, and that campaign was a success long before the
-campaign of education among the peopleI)egan.
Legislation may be delayed by the senate, but it has not been
Pleaded off" by any appeal the railways "have made to the people.
It is still the liveliest and breeziest of issues. t-
n i .
GOVERNMENT AS A SLEUTH
Attorney General Moody, in his address before the Lincoln
club of Boston, gave a b rief history of the proceedings which led to
tho indictment of the packers. He makes it altogether too apparent
that the evidence secured was not of a decisive character. The
Independent has already expressed the fear that the government
has been' foiled in its second attempt to ascertain the secrets of the
beef "trust, nor could the result be otherwise considering the
methods of investigation.
The investigation was begun with a sensational and absurd
blare of trumpets. Instead of approaching stealthily the govern
ment proclaimed that it was on the march to crush the common foe.
The attorney general authorized and directed a most searching in
quiry into the conduct of the packers. Witnesses Were subpoened
and questioned. Two of the most important witnesses fled from the
country. , Former employes of the packers were found and from
them was obtained some valuable testimony. After the grand
jury had been in session several weeks secret service men were given
the scent and told to shadow packing house employes. The packers,
however, were well informed as to every step taken by the district
attorney, and doubtless all the illegal paraphernalia was removed
before the raid .began.
Why was not the order of the investigation reversed ? Why did
not the secret service men begin the inquiry? Why were the packers
warned by the issuance of 200 subpoenas at one time? These are
questions that Attorney General Moody should have answered in
his speech bef ore the Lincoln club. The secret service men could
have secured an abundance of information from talkative and un
suspecting employes of both ttic packing House and the railway com-
panics. This is the process adopted in hunting down little criminals
iWhy is it not adopted in hunting down the big criminals? If the?
district attorney had wished to uncover a gang of counterfeiters he
would not have set a trumpet to his lips and blown a fanfare sum
moning counterfeiters to testify before a grand jury. He would
have secured the evidence first, then arrested the counterfeiters, and
finally submitted the matter to the grand jury.
It is to be hoped that the . government will know better next
time, but a radical change of administration is necessary. In deal
ing with the trusts justice must be as wise as a serpent and as
innocent as. a dove.
, THEORY OF STOCK VALUES
Editor Louis F. Post in his admirable paper, The Public, sug
gests that Thomas W. Lawson has set the cart before the horse in
assiuning that wealth distribution is controlled by stock values,
whereas stock values are controlled by wealth distribution. Mr.
Post points out that by the special privileges they enjoy the railways
and corporations are able to increase their capitalization without
"watering" ' the stock. Stock which, for example, has a nominal
value of $10,000,000 when its net earnings capacity is five per
cent has a real and equitable value of $20,000,000 when its net earn
ing capacity has advanced to ten per cent as the result of such privi
leges as rights-of-way, mining rights, franchise rights, etc.
Editor Post has undoubtedly stated the correct theory of stock
values. Many have declared that the values of certain railway,
stocks have been "watered," but- when we find these stocks regular fly,
paying dividends of 5 or 6 per cent we cannot truthfully say that any;
portion of the stocks consists of water. As long as the western rail
ways have the privilege of charging high freight rates without refer
ence to the increased wealth of the districts they traverse it will
be possible to increase the capitalization of the roads every little
while, but the roads will not therefore be overcapitalized. It is be
cause the roads have the power to "bleed" the west by extortionate
freight rates that the values of railway stocks are continually;
mounting. When the financiers observe that the surplus of a certain
road is growing topheavy and that larger dividends can be paid
they proceed to issue more stock. There is a great deal of "graft"
in the underwriting of such stocks. Much of the value is absorbed
by pools and syndicates which manipulate the funds by various de
vices, such as, for example, were employed by the Equitable di
rectorate divert into the pockets of Wall street "grafters" a surplus
that should have gone to the policyholders. The owners of the rail
way stock, of course, reap a portion of the profit that comes from
capitalizing the increased value of the road. Meantime the value
has been spread out over a wider surface and the new and old
holders of stock will draw only four or five per cent where the origi
nal holders of the stock, if there had been no recapitalization, would
have drawn dividends of ten or twelve per cent.
The only sane method of correcting this evil is public owner
ship. When the government owns the railways there. wTill be no
inducement to extort high freight and passenger rates. As the re
gions through which the railways pass increase in wealth and pro
ductiveness the increased earnings of the roads will be returned to
the people by a lowering of the freight and passenger rates.
The fact that the railways have been able so often to increase
their capitalization is an excellent reason why government ownership
in this country should be a success. Under government ownership
the entire revenue would go to the government. In a nation whose
productiveness is increasing at a rapid rate government ownership,
therefore, should be much more successful than in a nation whose
productiveness increases slowly. In the United States the people
pay for all the roads every fourteen years by means of high freight
rates. It should, therefore, be easy to acquire and pay for the roads
and to operate them at a great profit after they have been acquired.
A GRADUATE OF ANARCHY
When Thomas W. Lawson in plain and lucid language ex
posed "the system" to Kansas and Nebraska folk a few weeks ago
he wTas told that he was merely describing with a more intimate
knowledge conditions which populists had been denouncing for years.
In reply Mr. Lawson said that he did not clearly understand the.
teachings of populism. He knew that he was telling the truth and
if what he said was populism he was glad to know that populism
wasjthe truth.
But the similiarity between Lawsonism and populism ends
just where populism becomes constructive. There is nothing con
structive about Lawsonism. As Mayor Dunne of Chicago rightly
