Nobraoho. Independent
PAGE
DECEMBER 7, 1905 :
"what we should desire to find out is the individ
ual quality of the individual man."
He recommends free trade between the Phil
ippines and the United States saying "w. the
actual benefit has doubtless been exaggerated, it
will , be of great importance from a political
and sentimental standpoint," and lat "it will aid
the Filipinos without endangering interests in
America'."
Referring to Hawaii, he suggests that im
mediate' steps be taken for the fortification of that
island.
Touching Porto Rico, he recommends the
adoption, of legislation which will "explicitly con
fer American citizenship on all citizens of Porto
Rico," adding, "there, is, in my judgment, no ex
cuse for failure to do this.','
Referring to the Panama canal, he says that
work is progressing, and he hopes to lay before
the congress at an early day t!:e findings of the
advisory board of engineers as to the type of the
canal. He says that marked improvement has
been made in sanitary conditions surrounding
the workmen on the canal, and :.e exnects that by
the middle of the approaching year the work of
excavation on a large scale will be resumed. He
asks for prompt and liberal appropriations for
the purpose of carrying on the canal work, ac
cording to the estimates provided in '.he report
of the secretary of war.
Referring in his message to the corporation
and railroad questions, the president says:
"The fortunes amassed through corporate
organizations are now so large, and vest such
power in th o that wield them, as to make it
a matter of necessity to give to the sovereign
that is, to the government, which represents the
people as a whole some effective power of super
vision over their corporate use.
Experience has Bhown con.lusively that
clusively that it is useless to try to get any ade
quate regulation and supervision of these great
corporations by state action. Such regulation
and supervision can only be effectively exercised
by a -sovereign whose jurisdiction is co-e::tensive
with the field of work of the corporations that
is, by the national government. I believe that this
regulation and supervision can be obtained by the
enactment of law by the congress. If this proves
Impossible, it will certainly be necessary ultimate
ly to confer in fullest form such power upon the
national government by a proper amendment of
the constitution. It would obviously be unwise
to endeavor to secure such an amendment until
it is certain that the result can not be obtained
under the constitution as It now is. The laws of
the congress and of the several states hitherto,
as passed upon by the courts, 1 ve resulted more
often in showing that the states have no power
in the matter than that the national government
has power; so that there at present exists a very
unfortunate condition of things, under which these
great corporations doing an interstate business
occupy the posltiorf of subjects without a sov
ereign, neither any state government nor the
national government having effective control over
them. Our steady aim should be by legislation,
cautiously and carefully undertaken, but resolute
ly perserved in, to assert the overeignty of the
national government by affirmative action.
. "This is only In form an innovation. In sub
stance it is merely a restoration; for from the
earliest time such regulation of industrial activi
ties has been recognized in .ae action r the
law-making bodies; and all that I propose Is to
meet the changed conditions in such manner as
will prevent the commonwealth abdica..ng the
power it has always possessed, not only in this
country but also in England before and since
this country became a separate nation.
"It has been a misfortune that the national
laws on this subject have hitherto been of a
negative or prohibitive rather than an affirma
tive kind, and still more that they have in part
Bought to prohibit what t uld not be eff-tlvely
prohibited, and have in part in their prohibitions
confounded what should be allowed and what
should not be allowed. It Is generally useless
to try to prohibit all restraint on competition,
whether this restraint be reasonable o unrea
sonable; and where it is not useless it is generally
hurtful. Events have shown t'aat 't Is not pos
sible adequately to secure the enforcement of
any law of this kind by Incessant appeal to the
courts. Tho department of justice has for the
last four years devoted more attention to the
enforcement cf. the anti trust legislation aan
to anything else. Much has been accomp Uhed;
particularly marked has been tin moral effect
of the prosecutions; but It Is Increasingly evident
that there will be a very Insufficient beneficial
result In the way of economic change. The sue
cessful prosecution of one device to evade the
Jaw Immediately develops another device to ac
complish the same purpose. What M ceedt.l Is
not sweeping , prohibition of every arrngemeut,
good or bad, which may tend to restrict competi
tion, but such adequate supei Islon and rogula
tlon as will prevent any restriction of competition
from being to the detriment of tho public as
well as such supervision and regul tion as will
prevent other abuses in no way connected with
restriction of competition. Of these , abuses, per
haps the chief, although by no means the only
one, is overcapitalization generally Itself the re
sult of dishonest promotion because of tho
myriad evils it brings in its train; for such over
capitalization often meana an inflation that in
vites business panic; it always ccaceals the true
relation of the profit earned t, the capital actu
ally invested, and it creates a burden of interest
payments which is a fertile cause of improper
reduction in or limitation of wages; it damages
the small Investor, discourages thrift, ana encour
ages gambling and speculation? while perhaps
worst of all Is the trjekiness and dishonesty which
it implies for harm morals is worse than any
possible harm to material interest and. the de
bauchery of politics and business by great dis
honest corporations is far worse than tny. actual
material evil they do the public. Until the na
tional government obtains, in some manner which
the wisdom of the congress iay suggest, proper
control over the big corporations engaged in in
terstate commerce that is, over the great ma
ority of the big corporations it will be impossible
to deal adequately with these evils.
"I am well aware of the difficulties of the
legislation that I am suggesting, and of the need
of temperate and cautiov action in securing
" it. I should emphatically protest against improp
erly radical or hasty action. Th first thing
to do is to deal with the great corporations en
gaged In the business of interstate transportation.
As I said in my message of December 6, last,
the immediate and most pressing need, so far
as legislation is concerned, is the enactment into
law of some scheme to secure to the agents of
the government such supervision and regulation
of the rates charged by the railroads of the
country engaged in . Interstate traffic as shall
summarily and effectively prevent the imposition
of unjust or unreasonable rates. It must include
putting a complete stop to rebates in every s .ape
and form. This power to regulate rates, like all
similar powers over the business world, should
be exercised with moderation, caution, and self
restraint; but it should exist, so that it can be
effectively exercised when the need arises.
"The first consideration to be kept in mind
Is that the power should be affirmative and should
be given to some administrative body created by
the congress. If given to i the present interstate
commission or to a reorganized interstate com
merce commission, such commission should be
made unequivocally administrative. I do not be
lieve in the government interfering with private
business more than is necessary. I do not be
lieve in the government undertaking any work
which can with propriety be left in private hands.
But neither do I believe in the government flinch
ing from overseeing any work v.hen It becomes
evident that abuses are sure to obtain therein un
less there is governmental supervision. It is
not my province to indicate the exact terms cf
the law which should be enacted; but I call the
attention of the congress to certain existing con
ditions with which it Is desirable to deal. In my
Judgment the most important provision which
such law should contain is that conferring upon
some competent administrative body the power to
decide, upon the case being brought, before it,
whether a given rate prescribed by a railroad is
reasonable and just, and if it is found to be un
reasonable and unjust, then, after full investiga
tion of the complaint, to prescribe the limit of rate
beyond which it shall not be lawful to go the
maximum reasonable rate, as it is commonly
called this decision to go into effect within a
reasonable time and to obtain from thence on
ward, subject to review by the courts. It some
times happens at present, not that a rate is too
high, but that a favored shipper is given too low
a rate. In such case the commission would have
the right to fix the already established minimum
rate as the maximum; and it would need only one
or two such decisions by the commission o cure
railroad companies of the practice of giving Im
proper minimum rates. 1 call your attention to
the fact that my proposal ic not to give the
commission power to inltlcte or originate rates
generally, but to regulate a rate already fixed
or originated by the roads, upon complaint and
after Investigation. A heavy penalty should be
exacted from any corporation which falls to re
spect an order of the commission, regard this
lower to establish a maximum rate as being es
sential to any scheme of real reform In the mat
ter of railway regulation, ""hu first necessity Is
to secure It; and unless It Is wanted to the com
mission there is little use lu touching the subject
at all.
"Illegal transactions often occur under the
forms of law. It has often occurred that a ship
per has been told by a traffic officer to buy a
large quantity of some commodity and then after
U has been bought nu open reduction la made In
tho rate to take effect Immediately, th arrange
ment resulting to the profit of tho one shipper and
tho one railroad and to iho damage of il t, r
- competitors, for it must not be forgotten that the
bigg shippers are at least as much to blar ? as any
- railroad in tla matter of rebates. The law should
make It clear so that nobody can iail to under
stand that any kind of commission paid on freight
shipments, whether in this form or in the form
of fictitious damages, or of a concession, a free
pass, reduced passenger rate, or payment of
brokerage, is illegal. It is worth while consider
ing whether it would not bewise to confer on the
government Ue right of 'civil -acLvu. against the
beneficiary of a rebate for at least vW.je the
value of the rebate; this would help stop what
is really blackmail. Elevator allowances should
be stopped, for they have nw grown to such an
extent that they are demoralizing and arc used
as rebates.
"All private car lines, industrial roads, re
frigerator charges, and the like should be express
ly put under the supervision of the interstate
commerce commission or some sir ar body so
far as rates, and agreements practically affecting
rates, are concerned. The private car owners and
tne owners oi industrial railroads are entitled
to a fair and reasonable compensation on their
investment, but neither private cars nor indus
trial railroads, nor spur tracks should be utilized
as devices for. securing preferential rates. A re
. bate in icing charges, or in mileage, or In a di
vision of the rate for refrigerating charges is
just as pernicious as a rtbate to. an;- other way.
No lower rate should apply on gooas imported
than actually obtains on domestic goods .m
the American seaboard to destination except In
cases 'where water competition is the controlling
influence. There should be publicity of the ac
counts of common carriers; no c mon carrier
engaged in interstate business should keep any
books or memoranda other than those reported
pursuant to law or regulation, and these books
or memoranda e'-ould be open to the inspection
of the government. Only in this way can viola
tions or evasions of the law be surely detected.
A system of examination of railroad accounts
should be provided similar to that now conducted
into the national banks by th. bank examiners;
- a few first-class railroad accountants, if they had
proper direction and proper authcity to inspect
books and papers, could accomplish much in pre
venting willful violations of the law. It would
not be necessary for tht ai to examine in . the
accounts of any railroad unless for reasons
they were directed to do so by the Interstate com
merce commission. It is greatly to be desired
that some way might be found y which agree
ment as to transportation within a state intended
to operate as a fraud upon the federal interstate
commerce laws could be brought under the juris
diction of the federal authorities. At "present it
occurs that large shipments of interstate traffic
r are controlled by concessions on purely state busi
ness, which if course amounts to a'n evasion of
the law. The commission should have power to
eniorce iair treatment oy tne great trunic lines
of lateral and bran- lines. , "
"I urge upon the congress the need of pro
viding for expeditious action by the in: estate
commerce commission in all these matters,
whether in regulating rates for transportation or
for storing or for handling orcperty or commo
dities in transit. The history of the cases litifated
under the present jmmerce act shows that its
efficacy has been to a great degree destroyed by
the weapon of delay, almost the most formidable
weapon in the hands of those whse purpose it
is to violate the law.
"Let me most earnestly say that these rec
ommendations are not made in any cp'rlt of hos
tility to the railroads. On ethical grounds on
grounds of right, such hostility would be intol
erable; and on grounds of mere national self
interest we .must remember that such hostility
would tell against the welfare not merely of somo
few rich men, but of a multitude of small in
vestors, a multitude of railway employes, wage
workers; and most severely against tho Intprest
of the public as a whole. I believe that on the
whole our railroads have don' well and not ill;
but the railroad men who wish to do well should
not be exposed to competition with those w! a
have no such desire, and the only way to secure
this end Is to give to somo government tribunal
the power to see that Justice la do: e by th un
willing exactly as It Is gladly d'ne b tho willinr.
Moreover, If some govenuaont body Is given In
creased power the effect will e to furnish au
thoritative answer on behalf of the railroad when
ever Irrational clamor against it Is raised, or
whenever charges made nst It are disproved.
I ask this legislation not only In the Interest of
the public but In tho lnt eat of the honest rail
road man and the honest shipjwr alike, for It Is
they who are chiefly JeoparC y the ru-
of their dlahonest competitors Thl U?, Jntlnn
should be enacted In a vplrit as remote as poc5!blo
from hysteria and rancor. If we of the Atn-rlcan
body politic are trtm to th tridltlon wc 1 ave
Inber'tH we t?1 un corn nr nrt tt make
us hate any man because he la rich, just an much
I Continued on Pk 12.)
