| Show CAUSES OF THE PRESENT FINAN CIAL conditions IS MADE THE CHIEF TOPIC SUGGESTS REMEDIES FOR ILLS CONTROL OF corporations AND RAILROADS TO PREVENT overcapitalization believes this would solve the P lem together with provision for more elastic currency becom mends postal banks and asks for leg along many lines washington dec 3 president roosevelt a annual message to congress is a voluminous document of nearly 30 words by tat the longest mes sage he has ever submitted to congress the opening subject of the message Is the financial condition ot the country and for which the president lays much of the blame upon unscrupulous stock speculators and says in any large body ot men however there are certain to be some who are dishonest and it the cond are such that these men prosper or corn mit their misdeeds with impunity their example Is a very evil thing for the community where these men are busl ness men of great sagacity and of tern pe both unscrupulous and reck less and where the conditions are such that they act without supervision or control and at first without effective check from public opinion they delude many innocent people into making in vestments or embarking in kinds of business that are really unsound when the misdeeds of these successful lyl dishonest men are discovered sut bering comes not only upon them but upon the innocent men whom they have misled it is a painful awakening whenever it occurs and naturally when it does occur those who suffer ire apt to forget that the longer it was deferred lef erred the more painful it would be in the effort to punish the guilty it is both wise and proper to endeavor so far as possible to minimize the dis tress of those who have been misled by abe guilty yet it Is not possible to retrain because of such distress from striving to put an end to the misdeeds that are the ultimate causes of thel gut fering and as a means to this end where possible to punish those re tor them there may be hon cst differences of opinion as to many governmental policies but surely there can be no such differences as to the need of unflinching perseverance in the war against successful dishonesty he at length from his mes sage 0 last year in which he aavo acted federal control of corporations doing interstate business and believes that in such control would be found the remedy for overcapitalization and stock speculation which he believes have brought about the present finan caal conditions he says our steady aim should be by legis lation cautiously and carefully under taken but resolutely persevered in to assert 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 auch regula alon of industrial activities has been recognized in the action of the law making bodies and all that I 1 propose is to meet the changed conditions in such manner as will prevent the corn mon wealth abdicating the power it has always possessed not only in this coun try but also in england before and since this country became a separate nation federal control of railroads I 1 I adored no small part of the trouble that we have comes from carrying to an ex the national virtue of self re alance of independence in initiative and action it Is wise to conserve this virtue and to provide toilets fullest ex enelse compatible with seeing that lib erty does not become a liberty to wrong others unfortunately this Is the kind of liberty that the lack of all effective regulation inevitably breeds the founders of the constitution pro vided that the national government should have complete and sole control ot interstate commerce there was t ien practically no interstate business save as was conducted by water and this the national government at once proceeded to regulate in thorough going and effective fashion condl eions have now so wholly changed that the interstate commerce by water Is ln significant compared with the amount that goes by land and almost all big business concerns are no v engaged in interstate commerce As a result it can be but partially and imperfectly controlled or regulated by the action of any one of the several states such ac tion inevitably tending to be either too drastic or else too lax and in ither case ineffective for purposes of justice only the national government can in thoroughgoing fashion exercise the needed control this does toot mean that there should be any extension of federal authority for such authority already exists under the constitution in amplest and most tar reaching form but it does mean tl at there should be an axtens on of federal activity this Is not advocating centralization it Is merely looking facts in the face and realizing that centralization in business has already come and can not be avold i ed or undone and that the public at large can only protect itself from tain evil effects of chigi business cen by providing better methods tor the exercise of control through the authority already centralized in the national government by the cons titu alun itself there must be no halt in the healthy constructive course of ac alon which this nation has elected to pursue and has steadily pursued dur ing the last six years as shown both in the legislation of the congress and the administration of the law by the de apartment part ment of justice the most vital heed is in connection with the railroads As to these in my judgment there should now be either a national ancor por atlon act or a law licensing railway companies to engage in interstate corn merce upon certain conditions the law should be so framed as to give to the interstate commerce commission power to pass upon the future issue of ties while ample means should ba pro vided to enable the con mission when ever in its ju figment it Is necessary to make a physical valuation of any rail road As I 1 stated in my message to the congress a year ago railroads should be given power to enter into agree ments subject to thes agreements be ing made public in ml ute detail and to the consent of the interstate commerce commission being first obtained until the national goven ment assumes proper control of interstate commerce in the exercise of the authority it al ready possesses it will be impossible either to give to or to get from the railroads full justice the railroads and all other great corporations will do well to recognize that this control must come the only question is as to what governmental body can most wisely exercise it the courts will de termine the limits within which the federal authority can exercise it and there will still remain an pie work within each state for the railway corn mission of hat state and the national interstate commerce commission will work in harmony with the several state commissions each within its own brov ince to achieve the desired end control of interstate Intern tate Buxia eel conterno Con terne arged moreover in my judgment there sl be additional legislation looking to the proper control of the great business con berns engaged in interstate business this control to be exercised for their own benefit and prosperity no less tl an tor the protection of investors and of the general As I 1 have repeatedly said in n messages to congress and else where emerien ep erien e has definitely sho not merely tl e but the futility of endeavoring to put a stop to all bust ness combinations modern industrial conditions are such that combination is not only necessary but inevitable it is so in tl e world of business lust as it Is so in tl e world of labor and it Is as idle to desire to put an end to all corpora eions to all b g combinations of capital as to desire to put an end to alons of labor corporation and labor union alike have con e to stay each it properly managed Is a source of good and not evil wl enever in either there is evil it should be promptly held to ac count but it should receive hearty en coura gement so long as it is properly managed it is profoundly immoral to put or keep on the statute books a law nominally in the interest ot public moral ity that really puts a premium upon public immoral ty by undertaking to forbid honest men from doing what must be done under modern business condl alons so that the law itself provides that its own infraction must be the condition precedent upon business success to aim at the ashment of too much ally means the accomplishment of too lit tie and often tl e doing of positive dam age the antitrust baw should not be re pealed but it sl be made both laore efficient and more in harmony with ac ual 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 su power to the government over these b g corporations engaged in inter state bus ness this should be accod palled by provision tor the compulsory publication of accounts and the tion of books and papers to the inspect alon of the government officials A be ginning has already been made tor such supervision by the establishment of the bureau of corporations the antitrust law should not prohibit combinations that do no injustice ta the public st less those the existence of wh ch is on the whole of benefit to the public but even it this feature of the law were abolished there would remain as an equally objectionable feature the difficulty and delay now incident to its enforcement the government must now submit to irksome and repeated delays before obtaining a final decision of tl e courts upon proceedings instituted and even a favorable decree may mean an empty victory moreover to attempt to control these corporations by lawsuits means to impose upon both the depart ment of justice and the courts an am possible burden it is not feasible to carry on more than a limited number ot such suits such a law to be really effective must of course be administered by an executive body and not merely by means of lawsuits the design should be to prevent the abuses incident to the crea alon of unhealthy and improper alons instead of waiting until they are in existence and then attempting to de stroy them by civil or criminal proceed ings in esting public should de amply safeguarded the congress has the power to charter corporations to engage in interstate and foreign commerce and a general law can be enacted under the provis ons of which existing corporations could take out led eral charters and new federal corpora alons could be created an essential pro vision of such a law should be a method of predetermining by some federal board or commission wl ether the applicant for a federal charter was an association or combination within the restrictions of the federal law provision should also be made for complete publicity in all matters affecting the public and complete krotec alon to the investing public and the share holders in the matter of issuing corporate securities if an incorporation law is not deemed advisable a license act for big interstate corporations might be enacted or a of the two might be tried tl e supervision established might be analogous to that now exercised over national banks at least tl e antitrust act should be supplemented by specific prohibitions of the methods which ex per lence has shown have been of most service in enami ng mo alons to crush out competition the real owners of a corporation should be corn polled to do business in their own name the right to hold stock in other corpora alons should hea reatter be denied to inter state corporations unless on approval by the proper government officials and a prerequisite to such approval sl be the listing with the government of all owners and stockholders both by the corporation owning such stock and by the corporations in which such stock Is owned to confer upon the national govern ment in connection with the amendment I 1 advocate in the antitrust law power of s pet vision over big business concerns engaged in interstate commerce would benefit them as it has benefited the na banks in the recent business crisis it is noteworthy that the lions which failed were institutions which were not under the supervision and control of the national government those which were under national con arol stood the test national control of the kind above ad vacated would be to the benefit of every well managed railway from the stand point of the public there Is need for ad dit lonal tracks adit lonal terminals and improvements in the actual handling of the railroads and all this as rapidly possible ample safe and speedy trans port atlon facilities are even more necea sary than cl eap transportation there fore there Is need for the investment of money which will provide for all these things while at the same time securing as fas as Is possible better wages and shorter hours tor their employed emp loyes there tore while there enst be just and rea regulation of rates we should be the first to protest against any arbitrary and unthinking movement to cut them down without the fullest and most care ful consideration of all interests con berned and of the actual needs of the situation only a special body of men acting for the national government un der authority conferred upon it by the congress Is competent to pass judgment on such a matter greater in currency ie urged the president quotes extensively from his last message in deall hg with the dl subject of currency legislation and says I 1 again urge on the congress the need of immediate attention to ams matter we jaees a greatel elasticity in our cur rency provided of course that we lecog nize the even greater need of a sate and secure currency there must alway be the most rigid examination by the na authorities provision should be made tor an emergency currency the emergency issue should of course be made with an effective guaranty and up on conditions carefully prescribed by the government such emergency issue must be based on adequate securities approved by the government and must be issued under a heavy tax this would permit currency being issued when the demand tor it was urgent while securing its re tire nent as the demand ell off it Is worth investigating to determine whether officers and d rectors of national banks sho id ever be allowed to loan to them selves trust compan es should be sub eject to the same supervision as banks legislation to this effect should be en acted for the D strict of columbia and the territories yet we must also remember that even the wisest legislation on the subject can only accomplish a certain amount no legislation can by any possibility guar antee the business community against the results of speculative folly any more than it can guarantee an ind vidual against the results of his extravagance when an in mortgage h s house to buy an automobile he disaster and when wealthy men or men who pose as such or are unscrupulously or foolishly eager to become such indulge in reckless spec especially it it is accompanied by dishonest disho neit they jeopardize not only tl air own future but the future of all their in fellow citizens tor they expose the whole business community to panic and distress he advises against any general tariff legislation this session of congress and says in a country of such phenomenal growth as ours it Is probably well that every dozen years or so the tariff laws should be carefully scrutinized so as to see that ho excessive or improper bene fits are conferred tl cereby that proper revenue Is provided and that our foreign trade Is encouraged there must always be as a minimum a tariff which will not only al low for the collection of an ample rev denue but will at least make good the difference in cost of production 1 ere and abroad that Is the difference in the labor cost 1 ere and abroad for the well being of tl e wage worker must ever be a cardinal point of american policy the question should be approached pure ly from a |
