The San Francisco call. [volume], December 04, 1907, Page 1, Image 1

About The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913

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SECOND SECTION
President Saves an Outspoken Message
Says That Only the National Government Can Give Proper Control to Interstate Commerce
T TNTIL the national government assumes control of
V^ interstate commerce *r * * it will be impossible
either to give to or to get from the railroads full justice.
Roosevelt's Well Known
Policies Are Set Forth ; :
In Unmistakable Words
Recommends That Law Makers Correct the Evils
Responsible for Unsettled Business and
Industrial Conditions in Nation
WASHINGTON, Dec. 3 —The annual message of
the president of the United States was received by the
senate at 12:43 p. m. today, and within a minute Secretary
Bennett had begun the reading of the document. The
message was presented to the senate by the assistant secre
tary to the president, Latta, who had followed Senators
Allison and Teller, the committee which had made the
customary call upon the president.
"We have called upon the president," said the vener
able senator from lowa, standing in the center of the aisle,
beside the equally venerable senator from Colorado, "and
he informs us that he will communicate with the senate in
writing immediately." H.
"A message from the president of the United States,"
announced Latta, and the document was read.
In the house the reading was concluded at 3 : 1 7 o'clock,
and the speaker announced his appointment of the com
mittee on banking and currency, with Fowler, Jits, former
chairman, continuing in that position. The house then
adjourned until Thursday.
A telegram of greeting from Oklahoma's first legisla
ture to the congress was read in the house, eliciting great
applause. # /
Interest in the president's message was intense in both
branches. The galleries were well filled. \
To the senate and house of representa-
No nation has greater resources than
ours, and I think it can be truthfully
said that the citizens of no nation pos
sess greater energy and industrial abll
jtv In no nation are the fundamental
business conditions sounder than in ours
at this v<>ry moment, and it is foolish
•when such is the case for people to hoard
inonev instead of keeping it in sound
banks, for it is such hoarding that is
the immediate occasion of money strin-
R encv. Moreover, as a rule, the busi
ness'of our people is conducted with
honesty and probity, and this applies
alike to farms and factories, to rail
roads and banks, to all our legitimate j
commercial enterprises.
Must War Against
Successful Dishonesty
In any larse body of men. however,
there af<- ri rtain to be some who are
dishonest, and if the conditions are
such that these men prosper or commit
their ini.sde»-ds< with impunity their ex
ample is a very evil thing for the com
munity. Where these men are business
men of great sagacity and of tempera
ment both unscrupulous and reckless,
and Where th*- conditions are such that
they act m ithout sup-rvision or control
and at first without effective check
from public opinion, they delude many
innocent people into making invest
ments, or embarking in kinds of busl
css that are really unsound. When the
jnlsdeeds of these successfully dishonest
men are dhseocered suffering comes,
not only upon them, but upon the In
nocent in«Mi whom they have misled. It
is a painful awakening whenever It oc
curs, and naturally when it does occur
those who suffer are apt to forget that
the longer it was deferred the more
painful It woul^ be. In the effort to
T>unssh the erullty it is both wise and
rrooor to endeavor so far as possible to
'lilnlmize the distress of those who have
been misled by the guilty. Yet it Is
not possible to refrain because, of such
distress from striving to put an end to
the misdeeds that are the ultimate
causes of the suffering", and as a means
to --this end. where possible, to punish
those responsible for them. There may
be honest differences of opinion as to
many governmental policies, but surely
there can be no euch differences as to
the need ot unflinching perseverance in
the war against successful dishonesty.
In my message to the congress on
December 5. l»05. I said:
"If the folly of man mars the general
well being then those who are Innocent
of the folly will have to pay part of
the penalty Incurred by those who are
culltv of the folly. A panic brought
on by the speculative folly of part of
the business community would hurt
the whole business community, but
such stoppage of welfare, though It
might be severe, would not be lasting.
In the long run the one vital factor In
the permanent prosperity of the coun
try is the high individual character of
the average American worker, the av
ora » American citizen, no matter
whether his work be mental or manual,
whether he be farmer or wage worker,
. businessman or professional man.
Interests Intertwined
"In our industrial and social system
the Interests of all men are so closely
intertwined that in the Immense major-,
ltv of ca?ps a straight dealing man who
by his efficiency, by his Ingenuity and
indu«strv benefits himself must also
benefit others. Normally, Jhe man of
ereat productive capacity who becomes
rich by guiding the labor of many other
men does so by enabling them to pro
duce more than they could . produce
without his guidance, and both_he and
they share In the benefit, which comes
also" to the public at large. The super
ficial fact thaf the sharing may be un
rnual must never blind us to the under
[vingfact that there Is this aharlngand
that the b*»n*nt comes in some degree
to each man concerned. Normally the
Ucc worker, the man of small means
end the average consumer, as well h as
th" average producer, are all alike
helped by making: conditions such, that
tie man ot exceptional business ability
receives an exceptional reward 'for his
ability. Something can be done by les
islation to help the general prosperity,
but no such help of a permanently
beneficial character can be given to the
less able and less fortunate save as the
results of a policy which shall inure to
the advantage of all industrious and
efficient people who act decently, and
this is only another way of saying that
any benefit which comes to the leas
able and less fortunate must of neces
sity come even more to the more able
and more fortunate. If, therefore, the
less fortunate man is moved by envy
of his more fortunate brother to strike
at the conditions under which they
have both, tnough unequally,- pros
pered, the result will assuredly
be that while damage may oome to
the one struck at, it will visit
with an even heavier load the one who
strikes th« blow. Taken as a whole,
we must all so up or down together. 1
Energies Badly Used
"Yet. while not merely admitting, but
insisting upon this, it Is also true that
where there is no governmental re
straint or supervision some of tlte ex
ceptional men use their <;nere:ie3, not
In ways that are for the common good,
but in ways which tell against this
common -good. The fortunes amassed
through corporate organization are now
so large snd vest such power in those
that wield th*m an to make it a mat
ter of necessity to give to the sovereign
— that Is, to the government, which
represents the people us a whole —
some effective powfr of supervision
over their corporate use. In order to
insure a healthly social and industrial
life, every big corporation should bo
held responsible by and be accountable
to some sovereign -strong 1 enough to
control Its conduct. 1 am In no senae
hostile to corporationii. This is an age
of combination, and any effort to pre
vent all combination will. be. not only
useless, but in the end vicious, because
of the contempt for law which the fail
ure to enforce law Inevitably produces.
We 'should, moreover, recognize in cor
dial and ample fashion the immense
good effected bj; corporate agencies in
a country such as ours, and the wealth
of intellect, energy and fidelity de
voted to their service, and therefore
normally to the service of the public,
by their officers and directors. The cor
poration has come to stay, just as the
trade union ha« come to stay. Each can
do and has done great good. Each
should be, favored so long as It does
good. But each should be sharply
checked where It acts against law ana
justice. * --
Stale Action Useless
"* • • The makers of our
national constitution provided espe
cially that the regulation of interstate
commerce should come within '. the
sphere' of the general government. The
arguments in favor of their taking this
Mtund were' even then overwhelming.
But they are far stronger today, in
view of the enormous development: of
great business agencLe.e, • usually cor
porate in form. Experience has shown
conclusively that It is useless to try
to get any adequate regulation, and
supervision of these great corporations
by -state action. Such- regulation and
supervision can only be effectively ex
ercised by a, sovereign whose juris
diction is co.extenslve 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. \u25a0. • - : • - : . ; *.
Our steady aim should be by legislation,
cautiously and carefully undertaken,
but resolutely persevered in, %o as
sert '\ the sovereignty of .the national
government by affirmative action.
"This is only in form -an. innovation.
In substance it Is merely a restoration;
for from "the earliest time such ; regu
lation of industrial activities has-been
recognized In 1 the.: action of the j law
making \u25a0 bodies: and all'^'that' I propose
is: to : : meet the changed conditions In
such manner as; wiU prevent- th<« - com
monwealth abdicating the power it has
always possessed, not only.ln this coun
try, but also in England before and since
this country became a •ejpaxate -nation.
SA^ PRANOISCO, WEDNESDAY, DECEjVIBER 4, 1907,
Salient Points in the Message
There should be legislation to control great business concerns.
/Provision for an emergency currency, based on adequate securities.
A national law licensing railways to engage in interstate commerce.
Strengthening, our maritime power where it will promote our prestige.
Limit the abuse of injunctions and protect those rights it invades.
Compulsory investigation of industrial controversies of magnitude.
Navy is best guaranty that nation's honor will not be neglected.
'It has been a misfortune that the
national laws on this subject- have
hitherto been of a negative or prohibi
tive rather than an affirmative kind,
and still more that they have In part
sought to prohibit "what" could not be
effectively 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 or unreasonable; and
where it it not useless It is generally
hurtful. • • • The successful pros
ecution of one device to evade the law
immediately develops another device to
accomplish the same purpose. What Is
needed is -not sweeping prohibition of
every arrangement,- good or bad, which
may tend to. restrict competition, but
such adequate supervision. and regula
tion as will prevent any restriction
of competition from being to the detri
ment of the public", as well as such
supervision and regulation as will pre
vent other abuses In no way connected
with restriction of competition."
I have called your attention in these
quotations to what I have already said
because I am satisfied that it is the
duty of the national government to
embody in action the principles thus
expressed.
The" Regulation of
Interstate Commerce.. rr - \u0084--- -_--:
No small part of the trouble that we
have cornea Irontrcarrylngr to an ex
treme the national virtue of self-ro
llance, of Independence in initiative and
action. It is wise to conserve this
virtue and to provide for its fullest
exercise, compatible with seeing* that
liberty does not become a liberty to
wrong others*— Unf ortunaiely.:jthlß_:ls
the kind of liberty, that the lack x>f all
effective regulation inevitably breeds.
The founders of the constitution pro
vided that the national government
should have complete and sole control
of Interstate commerce. There was then
practically no interstate business save
such as was conducted by water,- and
this the " national - government at once
proceeded to regulate : In thorough
going and effective fashion. Conditions
have now bo wholly changed that tho
Interstate commerce by water is in
significant compared -with the amount
that goes by land, and almost all big
business concerns are now engaged in
interstate -commerce.-,- As a- result, it
can be but partially and imperfectly ;
controlled or regulated by. the aotlon
of any one of the: several states; such
action Inevitably tending to be either
too drastic or else too . lax, and •in (
either case ineffective for purposes of
Justice. Only the national goyernment
can . in thorough going, fashion exercise
the needed control. This does not mean
that there should be any extension of
federal authority, for. such authority
already exists under the constitution-. In
amplest and most far reaching: form;
but It does-mean that there should be
•an extension of federal activity.
\Not Centralization^ ... .
This Is hot advocating centralization.
It Is merely looking facts in the face, and
realizing that centralization in busi
ness haß already come; and cannot be
avoided or undone, and that the public
at large can onlj' protect Ats?\t -from
certain evil efforts -. of this business
centralization :..by "^providing \u0084 better
methods for the exercise. 1 . of "control
through the authority --already .^cen
tralized In the national government by
the constitution itself. There must-be
no halt In the healthy • constructive
course of action which this nation has
elected to pursue.'andhas steadily pur
sued, during that last* six \u25a0-•y/jars, a«
shown both in the legislation, of the
congress and the administration; of the
law by the department of justice. Tho
most vital need -is in connection with
the railroads. As to these, In .. mf
judgment there should now be either *a
national Incorporation act or a law
licensing, railway to : engage
In interstate commerce upon; certain
conditions. - The-, law,.. should , ; be-::so
framed as to : give-to the-interstate com
merce commission;- power:.- to:;pass'. upon
the future issue" of securities, while
ample means should. be:provided to:en
able the * commission,^ whenever ,-->U»-- Its
Judgment. It Is : necessary, -; to make a
physical valuation- of any- railroad, r As
I stated In my s message to the con
gress a year ago,; railroads should be
given power . to enter into agreements,
subject to the agreements -being made
public in minute detail and Ito the con
sent of sthe" Interstate ; : commerce com
mission being first obtained;; Until- the
national government . assumes ~; proper
control of interstate commerce,, in the
exercise of the authority it already
possesses, it will be- Impossible
to give to or to. get from -the railroads
full Justice. The railroads and all other
great corporations will do. well to
recognize. that thisrcontrol musticome;
the only question's as to what govern
mental body can '\u25a0 most wisely exercise
it. .The courts - will determine "^the
limits within \u25a0 which : the federal author-"
ity.can exercise it and there* will still
remain, ample, work '.within each" state
for s the railway,: commission: of Vthat
state; and the \ national •\u25a0 interstate ''com
merce commission iwlll^work': in - ; har
mony with \u25a0 tlie several sta to commis
sion?, each within; its' own : provlnce.l to
achieve the desired end.
Antitrust: Law'Shovild
. Moreover, in . my .. liudgmeht there
should be ; additional .: legislation; look-
Ing to the proper: control; oosf s the! great
business concerns engaged inter
state business, - this ', control *to .be ex
ercised ;for r their own benefit';arid'pros
perity no less than for, the protection of
Investors V and'-; of:; "^ the? general^/pub
lic.As I ;• have: .repeatedly- said sin
messages :. to v the;; congress .Hand
elsewhere, ; experience .'has i ' definitely,
shown not :; merely x the-- unwisdom % but
; the futility zof =J endeavoring.fto % put s a
stop to allibuslncßS'combinations.rJMod
ern:-industrial condition's! are; euchH that
combination is ; not! only nnecessaryibut
inevitable. . It* is ; so -\u25a0 In ., the", worlds of
business l Jußt; as Jfls; so<:insthe?.workl
of labor, and It Is - as ' idle : to - doslro ,to
' g A HIS country is definitely committed to the pro
\u25a0JL tectiye system, and any effort ta uproot it could not
but cause widespread industrial disaster.
put an end to all corporations, to all '
big combinations of capital, as to de
sire to put an end to combinations of
labor, * Corporation 'and 'labor union
alikej have come to stay. Each, if
properly managed, is a source of good
and not evil. Whenever In either there
is - evil, : it should be ' promptly ;Jield to
account; but it should receive hearty
encouragement so long as it is prop- \u25a0
erly managed. It -is profoundly im
moral to put or keep on the statute
books a law, nominally in the Interest
of public morality, that.' really puts
a premium upon public immorality, by
undertaking to forbid honest men from
doing what must be done under modern
business conditions,; so Mhat the' law
itself provides, that Its; own infraction
must be the condition precedent upon
business success. To aim nt the accom
plishment of too much usually means
the accomplishment of too little, and
often the doing of : positive damage.
In my message to the congress a' year
ago, in speaking of the antitrust laws,.
i said: :,,.jv. ....,-.;.;.;:
Combinations Needed
"The actual working of our laws has
shown that the effort to prohibit all
combination, good or had. is noxious
where it is not ineffective. v Combina
tion of capital, like combination of
labor, is a necessary element in our
present industrial system., It is not
possibler. "completelyrtOjPrfivent it; and
.tfrtt^weTc : possiblt^t tsiicU , complete . pre
vention. would_do damage to the; body
politic. AVhat^ we need is not vainly
to try to. prevent all combination, but
to secure suchrrigorous and adequate
control supervision .of the com
binations as to prevent their, injuring
the public, or existing in such forms
as inevitably to threaten injury. %•• •
JLti&.unfortunate. that. our present laws
1 should" forbid; all" combinations instead
of sharply discriminating between
those combinations which do evil.
* • * Often railroads would like to
combine for the purpose of preventing
a big shipper -from maintaining: Im
proper advantages at the expense of
Bmall shippers and of the general pub
lic. Such a combination; instead of being
forbidden by law, -should be favored.
• •• It is- a public evil to have
on thestatute books a law Incapable
of . full enforcement, "because both
Judges and Juries realize that its full
enforcement would destroy the business
of the country;rfor the result is to
make decent men violators of the law
against their- will, and to put a pre
mium on the behavior, of the willful
wrongdoers. Such a result in turn
tends to throw the decent man ,and
the willful wrongdoer into close asso
ciation, and in the end to -drag
down the former^ to . the ' latter's
level; -for the man" who becomes a
law breaker in onev way unhappily
tends to lose all respe6t for law and to
be .willing to break it irimany ways.
No more scathing condemnation*could
be visited upon a law than is contained
In; the words of. the Interstate commerce
commission when, in commenting upon
the fact that the numerous joint traffic
associations' do technically violate the
law, they say: 'The decision of the
United' States supreme court in the
trans-Missouri ease and the Joint traffic
association case has produced no prac
tical effect upon the railway operations
of the country. Such associations, in
fact, oxist now ras did exist before
these decisions,- and with the same gen
eraleffect. •\u25a0> In justice to all parties we
ought probably. to add that It is difficult
to see how our interstate railways could
be operated with dueyregard to the In
terest of the shipper; and the railway
without concerted action of the kind
afforded through these associations.'
:"Thls 'means that- the law as con
strued by the supreme court is such
that -the business i of the country can
not be conducted without breaking it."
/As I have elsewhere snid:
Proper Publicity;
"Allthls Is substantially what I have
said ; over, and ' over . again. Surely it
ouerhtnot'to tbe necessary to say that
it "in no shape ;or. way, represents any
hostility to corporations a s such: On
the contrary, it means a\ frank recogni
tion; of the .fact that combinations .of
capital,"" like combinations of labor, are
a -natural result of modern conditions
and of our national- development.? As
far as in v my /ability lies my endeavor
Is and will be to prevent abuse of pow
er by either and to favor both as long
as they, do well. - The : aim of the na
tional government is; quite as much to
favor and protect honest corporations;
honest businessmen ; of wealth, ag .to
bring, to justice ;those Individuals .and
corporations V; representing \u25a0 dishonest
methods. .^ Most ;certalnly there will ; be
no ,'• relaxation ; by the government - au
thorities in the .effort to : get at , any
great railroad wrecker— any \u25a0\u25a0 man who
by s clever" swindling, devices robs ;in
vestors, 'oppresses * wage workers \u25a0 and
does^ injustice*, -to ; the general public."
But any. such, move as.thlsisiinthe In
terest Jof,- honest : railway c operators, of
heneßt>" corporations 'and 'of .; those ?who
when x they - invest :thelr\ small: v savings«
in:stocka:and^bonds;,wlsh- to be assured
thatH these svwlll moneyl hon
eßtly! expended.; for j legitimate \u25a0 business
purposes." uTo confer I upon the
government jthe: power; for .which I ask
would ibe •: a'; check 'upon? overcapitaliza
tion and 'upon; the : clever gamblers who
ibenefltvby -"overcapitalization. ; But' 'lt
alone 'would mean >.- an'- increase • in- the
value,'-. an* increase in the safety,'; of the
stocks I and • bonds fof -' lawi abiding. ; hon
estly managed' railroads, and would ren
der it far easier, to market. their securi
ties, hi if believe -s In?:; proper publicity.
There has been - complaint of- some ;. of
the t investigations J recently,^ carried on,
but-thoae^whoV complain should put
tho v^-blame r \" where * it T belongs-— upon
the^ '''}\u25a0 misdeeds* '; which :; are '- done .: in
darkness : and not r- upon the • inves tiga
tions which brought.them to light. \The
administration'; is- responsible for-tiirn
ingi'on the ;llght,-but?it is, not respon
sible; for what the?; light showed.! -"VI
ask i- for i full r' powers to be gi ven : the
federal I government; f .because : no . : sin gle
state can s.by; legislation \u25a0 effectually eppe
with"; tli e^e ;- powerful " corporations y en
paged In .interstate /commerce,^; and;
\ while v- doing ;- them; fuir ; justice, "exact
from them in return full justice '« to
others. The conditions of railroad ac
tivity, the conditions of our immense
interstate commerce, are such as to
make the central government alone
competent to exercise full supervision
and control. .
Dishonest Work
"The grave abuses in individual cases
of railroad management in the past
represents wrongs not merely ..to
the general public, but, above all.
wrongs ;to fair dealing \and hon
est corporations .and men of wealth,
because they excite a popular anger
and distrust which from the very na
ture of the case tends to include in the
sweep of Its resentment good and bad
alike. From the standpoint of the pub
lic I can not - too earnestly say that
as soon as the natural and proper re
sentment aroused by these abuses be
comes Indiscriminate and unthinking.
It also becomes not merely unwise and
unfair, but calculated to defeat the very
ends which those feeling It have in
view. There has been plenty of dis
honest work- by corporations In | the"
past. ; There will not be the slightest
letup in the effort to hunt down and
punish every dishonest man. . But the
bulk of our business, is honestly done.
In the natural indignation the people
feelv over the- dishonesty, -it is all es
sential that they should not lose their
heads and get drawn into an Indiscrimi
nate raid upon * all corporations, all
jjeople of-yealth. whether they do :wel.l
oral, rtnuof any euch wild movement
good*, will, not come, can not -come; and
never has ; oome. -, On -the contrary, the
surest "way;; toi Invite action is to-fol
low . the?, lead?: of = either demagogue
or visionary in a sweeping assault upon
property values and upon public con
fidence, which would work incalcula
ble damage lin the business world and
would -rproduce- such distrust of „? the
agitators that in the revulsion 'the dis
trust would extend to honest men who,
in sincere and, sane fashion, are trying
to remedy the evils.".- .
. The antitrust law should not be re
pealed; but it should be made both
more efficient and more in harmony
with actual conditions. It should be so
amended- as to forbid-only the kind-of
combination" which does harm to the
general public, such- amendment to be
accompanied by, or to be an Incident
of, a grant of supervisory power to
the government over these big concerns
engaged in interstate business. This
should be- accompanied by provision
for the compulsory publication of
accounts •\u25a0 and the subjection of
books and papers to the inspec
tion of : the government 'officials. - A
beginning has already been made for
such;, supervision by the establishment
of the bureau •of corporations.
Irksome- Delay
. The antitrust law should not pro
hibit combinations that do no injustice
to the public, still less those the exis
tence of. which is on the whole of
benefit to the j public. But even .if . this
feature ' of the law were abolished
there would remain as .an equally - ob
jectionable feature, the difficulty and
delay now incident to its enforcement.
The government 'must now submlt'to
Irksome and repeated delay before ob
taining- a final,, decision of , the courts
upon proceedings instituted, and .even
a favorable decree may mean an empty
victory. Moreover, to attempt to con
trol these; corporations by lawsuits
means to impose 'upon , both the de
partment: of "Justice and the courts an
Impossible, burden: it is. not feasible
to carry ; on : more than a limited num
ber ;of -such suits. * Such' a law to-be
really jeffectlve must of course be ad
ministered by an. executive body," and
not merely, by means of lawsuits. The
design should bg;to prevent the abuses
incident to the -creation of unhealthy
and Improper conbinattons. instead of
waiting until they are -.in existence and
then attempting, to destroy them by
civil;. or. criminal proceedings.
A combination- should not be toler
ated if it \u25a0 abuse the power, acquired by
combination to the; public detriment.
No ',-\u25a0 corporation : . or ; association "of . any
kind -should: be -permitted to- engage in
f oreigfn :i or interstate commerce that
is : formed for the purpose > of, or whose
operations create, .a; monopoly or gen
eral ; control of \u25a0, the production,' sale, or
distribution of any one or more, of the
prime i necessities' of life or, articles -of
general use and necessity. Such", com
binations: are agarnst public policy:
they- violate the i common law; 'the doors
of the* courts are closed to those who
are parties to them, and I believe the
congress -can 'close the r channels of. in
terstate commerce ' against : them for its
protection. . The ; law. should make -. its
prohibitions - and ; permissions as clear
and - definite . as possible, .leaving the
; least -possible* room : for arbitrary ac
tion,* or allegation- of- such; action, on
the part'of the executive, or of diver
gent-interpretations by the. courts.
Among the points to be aimed at should
be the ., prohibition v of : unhealthy | com
petition,-such as i by,; rendering service
at?an ."actual; loss- for purpose' of
crushing out .competition; .the preven
tion:of inflationof capital, and the pro
hibition : of •\u25a0 a corporation's making ex
clusive trade :.wlth itself 'a condition' of
having any trade with i itself. ; Reason
able; agreements v between' or. combina
tlonsof corporations should be permit
ted, providedv they are* first submitted
tot and "- approved by some appropriate
goyernment body. \ .
Power of: Congress
. The congress has the power to char
ter *.i corporations "to ; engage In :\u25a0 inter
state and foreign : commerce, and a gen
eral}law. can be ' enacted under ; the pro
visions i of % which; existing corporations
could ! i take ; out ''federal ; charters \u25a0;. and
new; federal corporations could be?cre
ated. VAn essential provision of i such a
law shouldbe a^netnod of predetermin
ing} by \u25a0 some \u25a0 federal » board • or .; commls-
Biori,whethcr the applicant for a federal
charter- was. an association ;or: com
bination .within the -restrictions ; of > the
federals law.Vv Provision^ should .also" be
made jfor.completei publicity = in; all mat T
tersSaffecting;; the '< public* and* complete
protection - to ithe' Investing, public anrl
the* share i< holders I in;, the ?, matter.; .'of is
suing i: corpora te'isecurltles.T- If >an ln
corporationHaw is "not deemed advis
\u25a0 able,; a ; license; act' for bigr interstate
corporations might be enacted, or a
combination of the two might be tried.
Tho supervision established might be
analogous to that now exercised over
national banks. At least the antitrust
act should be supplemented by specific
prohibitions of the methods which ex
perience has shown have been of most
service In enabling monopolistic com
binations to crush out competition. The
real owners of a corporation should be
compelled to do business in their own
name. The right to hold stock in other
corporations should hereafter -be de
nied to , interstate corporations, unless
; on approval of the proper, government
: officials, and a prerequisite to such ap
proval should be the listing with the
government of .all owners and stock
lolders, both by the corporation own
ng such stock attid by the corporation
In which such stock Is owned.
To confer upon the national govern
ment- in connection wltlr the amend
met I -advocate In the -antitrust law
power of supervision over big business
concerns engaged in interstate com
merce -would benefit them, as It has
benefited the national banks. In tho
recent business crisis It is noteworthy
that the Institutions which failed were
institutions which were not under the
supervision and-control of-th© national
government: Those -whlch~ were under
national control stood the test.
Benefit to Railways
- National control of the kind above
advocated would be to the benefit of
every— well , managed -railway.*- From
the. standpoint of -the public there Is
need for additional tracks, additional
terminals and such improvements In the
actual handling of the railroads and all
this as rapidly as possible. Ample,
safe and speedy transportation facili
ties are even more necessary than cheap
transportation. Therefore, there is
need, for the investment of ".money
which will provide for air these things
while at the , same time securing as
far as is possible better wages and
shorter hours for their employes. There
fore, while there must be Just and rea
sonable regulation of rates, we should
be the first to protest against any ar
bitrary and unthinking- movement to
cut' "them" down without thefullest and
most careful consideration of all in
terests concerned and of the actual
needs of the situation. Only a special
body of men acting for the national
government under authority conferred
upon it by the congress is competent
to^pass judgment on such a matter.
Those who fear, from any reason, the
extension- of federal activity- -will do
well to study the history.. not-only of
tfieTna'tional banking act, but of the
pure - food law, and notably the meat
inspection law recently enacted. The
pure food law was opposed so violently
that' Its passage -was delayed - for a
decade.yet it has worked unmixed and
immediate " good. The meat inspection
law was even more violently assailed;
and;,the.same :men who now Renounce
ta«--attfMJde'-of-»the -natfoirar-govern
ment in seeking to oversee and control
the workings of interstate common car
riers and business concerns, then as
serted that we were "discrediting and
ruining a. great American Industry."
Two years have not elapsed, and al
ready it: has become evident* that the
great benefit' the law confers upon the
public is accompanied by an equal ben
efit to the reputable packing establish
ments.' The latter are better off under
the law than they were without it.
The benefit to interstate common car
riers and business concerns from the
legislation I. advocate would be equally
marked.; - . -,*\u25a0-\u25a0 \u25a0-.>
Benefits Resulting
From Pure Food Laws
Incidentally, in the passage of the
pure food law, the action of the various
state., -_fQod:,an.d^jclairx .-commissioners
showedr rn "Striking -fashiorr^Un'w; much
good for the whole peopleresults from
the hearty co-operation of the federal
and state officials in securing a given
reform.'; It' is,' primarily to^-the action
of these state commissioners that we
owe the enactment of this law; for
they aroused the. people, first to demand
the enactment and enforcement of state
la.ws on subject, and then the enactment
of ;:the' federal law, without^which the
state laws were - largely ineffective.
There must-be the closest co-operation
between' the' national and state gov
ernments in administering these laws.
Need Revision of^
Currency Lan>s. " • ~
In my message to the -congress a
year ago I spoke as 'follows of the
currency:- , ../.'.-\u25a0
"I especially call, your attention to
the condition of our currency laws. .The
national bank act has ably served a
great purpose in aiding the, enormous
business development of the
and TV'ithln 10 years there has been an
Increase /in circulation . per capitai ta from
$21.41 to $23.08. For several years
evidence has been accumulating; that
additional legislation is needed- The
recurrence of each crop season em
phasizes' the defects of the present
laws.- There % must soon be a revision
of them, because to leave 'them as they
are means to -Incur liability of busi
ness'disaster. Since your body ad
journed there has been a fluctuation in
the ' interest' on call raoneyfrom 2
per. cent, t0. 30 per cent, and the fluctua
tion was even greater, during -the pre
c.edlng six months/ The secretary of the
treasury had to step inland by wise
action put a stop to the. most violent
periodof oscillation.^ Even worse than
such fluctuation Is the advance in
commercial rates and the uncertainty
felt in v the sufficiency of credit even
at high rates. All commercial inter
ests' suffer .-\u25a0; during each crop period.
Excessive . rates . for call money In New
York attract moneys from the Interior
banks Into the speculative field. This
depletes the fund that would otherwise
be, available -for commercial uses, and
commercial /borrowers are. forced to
pay abnormal rates, so that each ."fall
a tax, in. the shape of increased interest
charges, is placed on the whole com
merce of \u25a0 the country.
\u25a0-"\u25a0: "The mere statement of these facts
shows " that ' our present system is se
riously ; defective. There . is need of a
change. .Unfortunately, however, many
of the proposed changes must be ruled
from consideration because they are
complicated, are not easy -of compre
hension , and tena* to disturb existing
rights and*" Interests.- We must also
rule out", any plan which - would ma
terially Impair the value of the United
States 2 per cent bonds, now; pledged to
secure, circulation, > the ' Issue of •, which
was " made J under t conditions peculiarly
creditable to the treasury. I do- not
press \u25a0 any. especial plan.- Various plans
have " recently • been - proposed -by expert
committees of - bankers. Among the
planr^which are possibly feasible and
which . should receive your
consideration is that- repeatedly brought
to : your attention 'by i the present secre
tary ;of :. the ' treasury, the essential
features s of "which have been ; approved
by many. prominent ; bankers and busi
ness \u25a0;. men.;;,. According ., to this plan
nationall; banks; should be- permitted
to. Issue j a specified proportion . of
theirfeapltal in*note9;of <a given kind."
th«» issue: to be. taxed at so high a Irate
as to drive the -notes biick when "not
pages' i Mil
; wanted In legitimate trade. This plan,
would not permit the issue of-cur
i rency to give banks additional profit.
>ut to meet the emergency .presented
by times of stringency.
VI do not say that this is " tho
right system. I only advance It
\.o emphasize my belief that there.
Is ". nejed for the adoption " .ot
some system which shall . be automatics
and open to air sound banks, so as, to
avoid all possibility of discrimination
and favoritism. Such a plan would
tend to prevent the spasms of hl*rt
money and speculation which now ob
tain in the New York market, for at
present there is too much currency at
certain seasons of the year, and Its ac
cumulation at New York tempts bank
ers to lend It at low rates for specula
tive purposes^whereas at other time*,
when the crops are being moved. ther»
Is urgent need for a large- but tem
porary increase in the currency sup
ply. It must never be forgotten that
this question concerns businessmen gen
erally quite as much as bankers: espe
cially is this true of stockmen, farmers
and businessmen in the west, for at
present at certain seasons- of the year
the difference in Interest rates between,
the east and the west Is from 8 to 10
per cent, whereas in Canada the corre
sponding difference is but 2 per cent..
Any plan must,' of course, guard the In- "
terests of western and southern bank
ers as carefully as it; guards the inter
ests of New York or Chicago bankers,
and must be drawn from the • stand
points of the farmer and' the 'merchant
no less • tban from the standpoints •of
the city banker and the country bank
er." .
Emergency Currency
I again urge on the congress the need
of Immediate attention to-this matter.
W© need a greater elasticity, in our
currency/ provided." of cours*- that we
recognize the even greater need of safe
and secure currency. There must al
ways be the most rigid examination by
the national authorities. Provision
should be made for an emergency cur-
rency. The emergency Issue should, of
course, be made with an effective guar
anty and upon condltlons-caretully pre
scrlbed-by-the- ffor«rnnjerctc~srach emer
gency Issue must be based on adequate
securities approved by the" government
and must be issued under a hea\y tax.
This would permit currency being Is
sued when the demand for it was ur
gent, while securing Its retirement as
the demand fell off. It Is worth inves- '
tigatlng to determine whether officers
andr-£iP9«t ©£«-.«£^n&tioTwtl-banfcti , should
ever- bo allowed -to-itran to themselves.
TrusT'co»p«»i*»-#hottf*"tw-Kubjpct to
the same supervision as banks; legisla
tion to this— «ffect should be enacted
for the district of Columbia and the
territories. ..~ «
Yet we must also remember that
even the wisest legislation on the sub
ject can only accomplish a certain
amount .No-leslalatioia^can-^by any
possiblHtr- guarantee: tho.-bit3la*9s com
munity against the results of specula
tive folly any more than it can guar
antee an individual against the results
°L , extravagance. When an Indi
vidual mortgages his house to buy an
automobile he Invites disaster, and
when wealthy men. . or -men who
pose as such, or..a.rjß_—.unsctupulous-
i y j °/ .•*°? 1 - ishl 3r3 r eagsr- to-become such.
Indulge in reckless speculation—es
pecially If It is accompanied by dis
honesty — they jeopardize not only their
own future, but the future of all their
innocent fellow citizens, for they ex
pose the whole business community
to panic and distress.
The Income account of the nation -!\u25a0
in a most satisfactory condition. For
the six fiscal years ending the
Ist of July last, the total-expenditures
and revenues of the national govern
ment, exclusive of the postal > revenue* '
end expenditures, were, in round-num
bers, revenues. $3,485,000,000. and -ex- '
penditures.,, $3,275,000,000. The.net ex
cess of : income over expenditure..--In
cluding in the latter the. 's3o,ooo,ooo
expended for the Panama cana^was 1
$190,000:000 for the six years.- •an \u25a0' ay- '"
erage of about $21,000,000 a year. .This
represents an approximation between
income and outgo which, It; would T>e
hard to improve. The satisfactory
working of the present tariff law ha 3
been chiefly responsible for • this' ex
cellent showing. Nevertheless.' there -is
an evident and constantly growing
feeling among our people that the tlma
is rapidly approaching" when -.our "sys
tem of revenue legislation must >'ba
revised.
Country Committed to*
Protective System
/ This country^ is definitely committed
to the protective system and any effort
to uproot it could not but cause wide
spread" industrial disaster. In other
words, the principle of the present tar
iff law could not with „ wisdom ',be>
changed. But in a country with such
phenomenal growth as ours .it is prob
ably well that every dozen years or so
the tariff laws should be carefully scru-.
tinized so as to dee that no excessive
or improper benefits are conferred
thereby, .. that proper revenue Is pro
vided and that our foreign trade Is
encouraged. There must always be as
a minimum a tariff which will. not only
allow for the collection of an ampld
revenue, but which will at least make.
good the difference In cost of pro
duction here and abroad; that Is. the)
difference In the labor' cost here- and
abroad, for the well being of th> wage*
worker must ever be a cardinal point
of American" policy. The question
should be approacTied purely from &'
business standpoint; both the time and
the manner of the change being such,
as to arouse the minimum of asrita
tlon and disturbance in the business:
world, and to give the least play for
selfish and factional motives. The sol©
consideration should be to see that,
the sum total of changes represent*
the public good. This means that the>
subject cannot with wisdom be dealt
with in the year preceding a presiden
tial election, because as a mater of fact.
experience has conclusively shown that
at such a time it Is impossible to get;
men" to treat It from the standpoint of;
the public good. -In my Judgment th<%
wise time to deal with- th« matter .:i»
Immediately after such elect! oc;:
Question of Income,
and Inheritance Tax
'When our tax laws ar* revised - thai
questlon'of an Income tax and an inher
itance tax should receive . the. careful
attention of our legislators. In my
judgment both of these taxes should be>
part 'of our system of .federal taxation,
I speak \u25a0 dimdenily-about " the -income
tax - because .one - scheme *, for . an'; income>
tax was - declared unconstitutional ~* by
the. supreme court. [. while . ln • addition • lti
is a difficult tax to' administer in - Its
practical working.. andgreat care would,
nave to" be- exercised to see {hat' lt was
not evaded by. the* very •. men' whom It
was most desirable , to hav-e." taxed, for If
so evaded it would, ;of course, be. worse
than no tax at all. as the ;least desirable*
of, all^.taxpsVJs i tbe^.-tax •,whleh\.bears
heavily upon th* -honest a»'< compared,
with- the dishonest man. ' Nevertheless