The San Francisco Call. Newspaper, December 6, 1905, Page 11

e A eyl Pages 111020 | — » SAN FRANCISCO, ‘WEDNESDAY, DECEMRBER 6, 1905. | Pagcs_l 1t020] —_— PRESIDENT'S MESSAGE RINGS WITH AMERICANISM Calls for Regulation of Railway ates and Control of Corporations In his message sent to Congress yesterday President Roosevelt refers to the continued prosperity of the country and calls attention to legislation needed to better safeguard the interests of the narion and 10 check abuses which bave arisen under our industrial system. No essential feature of the welfare of the republic is overlooked. Jrom sensationalism. *GOVERNME Full Publicity as to Campaign Contributions Urged. LITTLE SAID AS TO TARIFF Undesirable People Must Be Kept From the Country. UNRESTRICTED ISLAND TRADE Nothing Must Be Permitted to Hinder Work on Canal. his country flow all of A e folly dustria ¢ terests of all mer the spelal are so cl is guidance The s to_the shar- 2 some e man age con- sumer, he ave pro- er,’ are elped by making conditions su the man of ex- ceptional business ty receives an exceptional reward for his ility. Eomething can be done legislation to help the gene sperity, but no euch help of a Beneficial character can less able ne Presi- owing mes wmd House of Rep- continue Tndoubted- in such will general us. panic of v would though e be farmer or | professional ly the man _of ve capacity, who be- guiding the labor of n, does S0 by enabling e ‘more than they could and both nefit, which . n the advantage tries eficient people Who act decently this is only another way of eny benefit which comes ebie and less fortunat: ity come n more to the more able 2nd more fortunate. If, therefore, the less fortunate man is moved by envy of his more fortunate - brother to gtrike at the conditions under which they have both, though unequally, pros- pered, the result will assuredly be that while damage may come to the one struck af, it will visit with an even heavier 1oad the one who strikes blow. Taken as a whole, we must o up or go down together. GOVERNMENT CONTROL vailing Abuses Can Be Stopped. while not mere sting upon this, it iere there is no governmental traint or supervision some of the that are for the common good. Jat in ways which tell against this common good. The fortunes amassed the all OF BIG CORPORATIONS | Means by Which the Pre- admitting But also true that re- ex- onal men use thelr energies not in through corporate organization are now so large, that wield them, ter of necessity to and vest such power in those as to make it a mat- ive to the sover- eign—that 1s, to the Government, which represents the people some effective power of over their corporate use. insure a healthy life, every big corporation should In order as a whole— supervision to social and Industrial be held responsible by, and be accountable to, some Sovereign strong enough control its conduct. to T am in Do sense hostile to corpora- tions This is an age of combination, and any effort to prevent all combina- will be mot only useless, but because of the tion the end vicious, in con- tempt for law which the failure to en- force law inevitably produces. We should, moreover, recognize in cordial end ample fashion the immense effected by corporate agencies good in a country such as ours, and the wealth of intellect, energy and fidelity devoted he , deal begins to approach in importance the matter of endeavoring to secure proper industrial conditions under which the individuals—and especially | the great cormmuons—doxq‘g an inter- | state business are to act. he makers \flf our national constitution provided | | espectally that the regulation of inter- commerce should come within 1e sphere of the General Government. he arguments in favor of their taking his stand were even then overwhelm- But they are far stronger to- in_view of the enormous develop- of great business agencles, usu- | ally corporate in form. xperience has shown conclusively | that it is useless to try to get any ade- quate regulation and - supervision of these great corporations by State ac- Such regulation and supervision be effectively exercised by a whose ~jurisdiction is co- with the fleld of work of the | tion the National t. T believe that this regula- d supervision can be obtained by the enactment of laws by the Con- gress. If this proves impossible, it will | certainly be necessary ultimately to er in fullest form such power upon : National Government by a proper | ndment of the constitution It would obviously be unwise to en- deavor to secure such an amendment until it is certain that the result can- | ned_under the constitution | v is. The laws of the Con- nd of the several States hither- fo, as passed upon by the courts, resulted more often in showfing ates have no power in the matter at the National Government has so that there at present exists ¢ unfortunate condition of things under which these great corporations doing an interstate business occupy the position 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, cantiously and cdrefully undertaken. but resolutely persevered in, to assert the sovereignty of the National Govern- ment affirmative action In substance it is merely a restoration; for from the earliest time such regu- lation of industrial activities has been recognized in the action of the law- | making bodles; and all that I propose |is to meet the changed conditions in such manner as will prevent the com- monwealth abdicating the power it has always possessed, not only in this country, but also in England before and Mnr;a this country became a separate nation. {EVASIONS OF THE LAW Checked in One Place Up in Another. Tt has been a misfortune that the na- tional laws on this subject have hither- to been of a negative or prohibitive rather than an affirmative kind, and still more that they have in part sought to prohibit what could not be effective- 1y prohibited, and have in part in their bitions confounded what should be and what should not be al- lowed. 1t is generally useless to try to prohibit all restraint on competition, vhether this restraint be reasonable or areasonable; and where it is not use- is generally hurtful. Events have shown that it 1s not possible ade- quately ot secure the enforcement of quately to secure the enforcement of peal to the courts. The Department of Justice-has for the last four years devoted more attention to the enforcement of the anti-trust legislation than to anything else. ]Mm'h has been accomplished; particu- Springs larly marked has been the moral effect ot the prosecutions; but it is increas- ingly evident that there will be a very | insufficient beneficial result in the way |of economic change. The successful rrrnseuulicn of one device to evade the {law immediately develops another db. vice to accomplish the same purpose, \ What is needed is not swecping pro- | hibition of every arrangement, good or { bad, which may tend to restrict compe- tition, but such adequate supervision and regulation as will prevent any re- | striction of competition from bein, to the detriment of the public—as we, as such supervision and regulation as will prevent other abuses fi no way c‘onnected with restriction of competi- tion. Of these abuses perhaps the chief, al- though by no means the only one, is overcapitalization—generally ‘itself the result of dishonest romotion—be- cause of the myriad evils it brings in {in its train: for such_ overcapitaliza- | tion often means an inflation that in- | vites business panic; it always con- | ceals the true relation of the profit earned to the capital actually invested, and it creates a burden of interest payments which is a fertile cause of mproper reduction in or limitation of wages; it damages the small investor discourages thrift, and encourages ambling and speculation; while per- faps worst of all is the trickinocs and to their service, and tHerefore normally | dishonesty which it implies—for harm to the service of the public, by = and directors. favored as lon each should be ‘g it acts againet law and justic So long as the finances of their | The corporation Y 10 stay, just as the trade on s come to stay. Each can do nd has done great good. Each should as it does good. But arply checked where e nation ere kept upon an honest basis no other question of internal . economy which the Congress has the power with to to morals is worse than any poss ! herm to material interests, and ‘;cl‘le d;f bauchery of politics and business by great jshonest corporations is far worse than any actual material evil they do the public. p TUnti] the National Government ob- tains, in some manner which the wis- dom of the Congress may . Suggest, l proper control over the big corporations e ngaged in interstate commerce—that is, over the great majority of the big This is only in form an innovation. corporations—it will he impossible to deal adequately with these evils. FEDERAL REGULATION OF RAILWAY TARIFFS Power to Amend Rates Should Be Given to Interstate Board. I am well aware of the difficulties of the legislation that I am suggesting, and of the need of temperate and cau- tious action in securing it. 1 should emphatically protest n?mn improper- l{ radical or hasty action. The thing to do is to deal with the great corporations engaged in the business of interstate transportation. As I sald in my message of December 6 last, the immediate and most pressin; need, so far as legislation is concerned, is the enactment into law of some scheme to secure to the agents of the Government suchi supervision and reg- ulation of the rates charged by the railroads of the country engaged in in- terstate traffic as shall summarily and effectively prevent the imposition of unjust or unreasondble rates. It must include putting a complete stop to re- bates in every shape and form. This rower to regulate rates, like all simi- ar powers over the business world, should be exercised with moderation, caution and self-restraint, but it should exist, so that it can be effectively ex- ercised when the need arises. The first camsideration to be kept in mind is that the power should be af- firmative and should be given to some u.dmsglutmuva body created by Con- Bre: If given to the present Inter- state Commerce Commission, or to a re- organized Interstate Commerce Com- mission, such commission should be made unequivocally administrative. I do not believe in the Govern- ment interfering with private busi- ness more than is necessary. I do not believe in the Government un- dertaking any work which can with Eroprlety be left in private hands. ut neither do I believe in the Gov- ernment flinching from overseeing any work when it becomes evident that abuses are sure to obtain therein un- 1ss there is governmental supervision. It is not my province to indicate the exact terms of the law whi should be enacted, but I call the attention of the Congress to certain existing condi- i I‘:lwhlcg lt!hl' de’h‘flb‘a to deal. udgment the most im; provision which such law -houfiom o tain Is that conferring upon some com- petent administrative body the pow. to decide, upon the case being %roulg . { A before it, whether a given rate pre- scribed by a railroad Is reasonable and Just, and 'if it is found to be unreason- able and unjust, then, after full investi- gation of the complaint, to prescribe the 1imit 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 ard to obtain from thence onward, subject to review by the courts. It sometimes happons at present, Yot that a rate is too high, but that a fav- ored shipper is given too low a rate. In such case the commission would have the right to fix thll‘alrendy es- tablished minimum rate a8 the ‘maxi- mum, and it would need only one or two such decisions by the commission to cure rallroad companies of the prac- tice of ' giving improper minimum rates. . .1 call your attention to the fact that my proposal is not to give the commis- sion power to Initiate or originate rates generally, but to regulate a rate al-' ready fixed or originated by the roads, upon complaint and after investigation. A heavy penalty should be exacted from any corporation which falls to respect an’ order of the commission. re- gard "this power to establish a maxi- mum rate as being essential to any scheme of real reform in the matter of railway regulation., The first necessity is to secure it, and unless it is granted to the commission there is little use in touching the subject at all. PENALTY FOR REBATES Fine Should Be Twice the Sum Illegally Secured. F Tllegal transactions often occur un- der the forms of law. It has often oc- curred that a shipper has been told by a traffic officer to buy a large quantity of some commodity and then after it has been bought an open reduction is made in the rate to take effect immedi- ately, the arrangement relultlni to the profit of the one shipper and the one railroad and to the damage of all their competitors; for it must not be forgovt- ten that the big shippers are at least as much to blame as any railroad in the matter of rebates. The law should make it clear ;o that nobody can fail to understand that any kind of commis- sion paid on freight shipments, wheth- er in this form or in the form of ficti- tious damages, or of a concession, a free pass, reduced passenger rate, or B e consiaering whether e wor B4 ~ wise to blackmail. Elevat be stopped, for ti to such an extent NT SUPERVISION OF INSURANCE —_— PRESIDENT THEODORE ROOSEVELT. [ tor allowances should hey have now grown that they are demor- alizing and are used as rebates. The best possib! ‘would, of course, le regulation of rates be that regulation secured by an honest agreement among the railroads themselves to carry. out the law. Such a general agreement would, for instance, at once put a stop to the efforts of any one big shipper or big railroad to discriminate against or secure advantages over some rival; and such agreement would make the rallroads themselves agents for enforc- ing the law. should, panied by i) fled conditions an in my judgment, be ower to permit, The power vested in the Government to put a sto] ments to the detriment o to agree- the public accom under speci- supervision, d careful agreements clearly in the interest of the public. But, in my judgment, the necessity for giving this further power is by no means as iving the commission or ad- stiy for mlnlstrntfva bod. have enumerated above; and well be inadvisab) this particular power i great as the neces- the other powers I it may le to attempt to vest . the commis- sion or other administrative body un- til it already possesses and is exercis- ing what I regar important of all mend—as indeed d as by far the most the powers I recom- the vitally important power—that to fix a given maximum rate, which rate, Teasonable time, subject to review after the lapse of a oes into full effect, y the courts. INSPECTIO N OF BOOKS. Government Should Examine Accounts as Is Done With Banks. All private cars, refrigerator cha should be ex) scrvlllon of the mi industrial roads, rges and the like essly put under the su- Interstate Commerce ssion or some similar body so far as rates and agreements practically affecting rates are concerned. T he pri vate car owners and the owners of dustrial railroads and in- are entitled to a fair | ble compensationjon their reas: mvumm‘?ahut neither private cars nor industrial be utilized preferential charges, or In mil Sr ihe reftigerating charaes, rate for roads nor spur tracks should - as devices rates. A rebate in icing “for securing . or in a division is just as pernicious as a rebate in any other way. No lower rate should ap- Homoutic, goods From = th obtains on domes om the _Seaboard to destination, ex- o in wh ter competition is the controlling influence. x e should. be publicity in the ac- of co: n - i no com- mon carrier te The message is of great length and 1ts recommendations are clothed in language at once firm and free PRINCIPAL POINTS OF THE MESSAGE .fi’egu/afl'an of Radroad Rates The President’s message recommends national super- vision of corporations and calls for action by Congress on the control of insurance companies, State authority having proved inadequate. The President again advises Federal regulation of railway rates, proposing that the powers of the Interstate Commerce Commission be greatly increased. Jy.rlem of Dual Gari¥ Schedule The message is very brief on the tariff question. Comn- gress is asked to consider the dual tariff system, the minimum and maximum schedules to operate to “secure a certain re- ciprocity of treatment between ?uél/cl?_y in Campaign Full publicity is urged in tions. It is also proposed that other nations and ourselves.” Funds regard to campaign contribu- contributions by corporations for any political purpose be forbidden by law. Peace and the WJonroe Doctrine The desire of this nation for peace is set forth in the message, but a warning is raised against disarming, which would remove the bonds that among the less ci ilized countries. hold lawlessness in check The new obligations of the Monroe doctrine must be assumed, says the President, and have already been undertaken in the case of Santo Domingo with excellent results. C'Aan_ye: in the ]mm(yrail‘on Lawa Radical changes in the immigration laws are proposed in order to prevent the entrance of undesirables from Europe. The President stands for the strict exclusion of Chinese coolies, but urges better treatment for the exempt classes. Panama Canal and Philippines g An emergency appropriation is asked for the Panama canal. The President believes constructed in reasonable time. that the big waterway will be Ultimate free trade with the Philippines and the suspension of the application of the coast- wise shipping laws to ;those mended. islands until 1909 are recom- — memoranda, other than those reported pursuant to law or regulation, and these books or memoranda should be open to the inspection of the Govern- ment. Only.in this way can violations or evasions of the law be surely de- tected. A system of examination of railroad accounts should be provided similar to that now conducted into the national banks by the bank examiner: a few first-class railroad accountants, if they had proper direction and proper authority to insgecl books and papers.‘ could accomplish much in preventing willful violations of the law. It would not be necessary for them to examine into the accounts of any railroad un- less for good reasons they were di- rected to do so by the Interstate Com- ‘merce Commission. It is greatly to be desired that some way might be found by which an agreement 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 are controlled by concession on purely State business, which of course amounts to an evasion of the law. The commission should have power to emforce fair treatment by the great trunk lines of internal and branch lines. I urge upon the Congress the need of providing for expeditious action by the Interstate Commerce Commission in all these matters, whether in regu- lating rates or transportation or for storing or for handling property or commodities .in transit. The history of the cases litigated under the present commerce 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 whose purpose it is to violate the law. SPIRIT NOT HOSTILE. Question Must Be Approached Without Prejudice or Rancor. Let me more earnéstly say that these recommendations are not’ made in any. spirit of héstility to the railroads. On ethical grounds, on grounds of right, such hostility would be Intoleragle; and on grounds of mere natfohal self-inter- est we must remember that such hos- tility would tell against the welfare not merely of some few rich men, but of a multitude '6f small investors, a multl tud® of rallway employes, wage-wor! ers; and most severely against the i terest of the public as a whole. I be- lieve that on the whole our railroads have done well and not ill; but the railroad men who wish to do well should not be exgo'ed to competition with those who have no such desire, and the only way to secure this end is to give to some Government tribunal the power to see that justice is done by the unwilling ex- actly as it is rl-dly done by the willing. s some Government bo% oreover, is given increased power the effect will be to furnish authoritative answpgr on behalf of the railroad whenever®irra- tional clamor against it is raised, or whenever charfil against it are dis- roved. I ask this legislation not only the interest of the people, but in the interest of the honest raliroad man and the honest “’Q“k' alike, for it is they who are chiefly jeopardized by the es. their dishonest competi- This t tion should be enl;;- ed in a spirit as remote as possible from hysteria and rancor. If we of the body politic are true to the traditions we have inherifed, we shall always scorn any effort to make us hate any man because he is rich, just as much as we should scorn any make down treat t tu:! any man n:: con beca: he is poor. e i a man by his character- 2 ge by his — conduct—that is, by Py o g 3 th or Bo makes his fortune honestly: there I th him. Tn- Do sl e B S Lot i bl e K A ol e o e rathoscn i DI S A58 cause of 1 wi Whether be made his success by building or managing a railroad or by shipping goods over that rallroad. The big railroad men and big ship- pers are simply Americans of the or- dinary type. who have developed to an extraordinary degree certain great hus- iness qualities. hey are neither better nor worse than their fellow citizens of smaller means. They are merely more able in certain lines and therefore ex- posed to certain peculiarly strong temptations. These temptations have not sprung newly into being: the ex- ceptionally successful among mankind bave always been exposed to them: but they have grown amazingly in power as a result of the extraordinary de- velopment of industrialism along new lines, and under these new conditions, which the lawmakers of old could not foresee and therefore could not provide against. they have become so serious and menacing as to demand entirely new remedies. It is in the interest of the best type of railroad man and the best type of shipper no legs than of the public that there should be governmental super- vision and regulation of these great business operations, for the same rea- son that it is in the interest of the corporation which wishes to treat its employes aright that there should be an effective employers’ liability aet, or an effective system of factory laws to prevent the abuse of women and children. All such legislation frees the corporation that wishes to do well from being driven into doing ill, order to compete with its rival, which prefers to do ill. We desire to set up a moral stand- ard. There can be no delusion mors fatal to the nation than the delusion that the standard of profits, of business rosperity, is sufficient in judging anv usiness or political ?lltn!(ov—h‘om rate legislation to municipal vern- ment. siness success, whether for the individual or for the nation, is a good thing only so far as it is accom- panied by and develops a high stand- ard of conduct—honor, integrity, civie courage. The kind of business pros- rity that blunts the standard of onor, that puts an inordinate value on mere wealth, that makes a man Tuthless and conscienceless in trade and weak and cowardly In citizenship, is not a good thing at all, but a very bad thing for the nation. This Gov- ernment stands for manh firgt and for business only as an adjunct of manhood. FOR PRIVATE CONTROL. Public Ownership Regarded as Not Dew sirable for Country. The question of transportation lies at the foot of all industrial success, and the revolutfou in transpertation which has taken place during the last half century has been the most im- portant factor in the growth of the new industrial conditions. Most em- phatically we do not wish to see the man of great talents refused the re- ward for his talents. Still less do we wish to see him penalized; but we do desire to see the system of railroad transportation so handled ‘that the strong man shall be given no advan- tage over the weak man. We wish to insure as fair treatment for the small town as for the big city; for the small shipper as for the hli shipper. In the old days the highway of com- merce. whether by water or by a read on land, was open to all; it belonra to the le and the trafic along it was free. At present the railway is this highway, and we must do our best to see that it is kept open to all on equal terms Unlike the old highway it is a very difficult and complex thing te manage. and it is far better that it shoul managed by private individ- uals tl‘an b:' the Government. But it can only SO mana; on condition that justice is done the publie. because, in my *nt. publie owner- ".:fl’ e ?anoubl‘: in this “o-nry e a a I3 tail ;‘:'-rnchlnx disaster, that T wish to see such supervision of them in the interest of the as will make i t there no need for- .