Show government CONTROL one of the interesting developments ot of the harriman hearing before tho the interstate commerce commission was the discussion between counsel for harriman and counsel for the government as to tho advisability of congress passing 3 a law providing federal supervision over the issuance e of railroad securities the matter was war debated by two distinguished lawyers Jud judge gell H S lovett representing harriman and frank B kellogg of st paul special counsel for the commission in the proceeding directed against the harriman consolidation mr kellogg had this to say on athe the subject 1 I do not believe that an unreasonable restriction should be placed on the issuance of railway stocks and bonds I 1 do not think however that it is in the interests of the railways and of the public that railways should be prohibited from becoming great financial investment institutions dealing in stocks and bonds their credit which stood high should be used in abe he expansion of their lines and in the transportation of traffic they should bo be allowed reasonable generous profits I 1 should deplore the enactment of any Y legi legislation that would hamper the railroads in their operations it la Is my opinion however that the time has come when congress should reasonably limit the inflation of railroad securities such as was done in Harrl Harri mans recapitalization of the chicago and alton allton railroad company judge lovett sabi that in the present state of 0 public opinion li it might be popular for congress to pas pass a law regulating tho the issuance of railroad securities cur curi ties ittes he ile doubted the advisability of such a step and questioned ita its con i do not b believe olieve that congress has any auch power be he said it would involve a change in tho the acturo of the government it would e an with the fundament al W right to purchase so property paul D ora yath one ot of the best mown corporation sawyers in the united states counsel tor for harriman Harri raan md and serving in ta a like capacity for loeb and coni company pani did not the subject but expressed himself somewhat as did mr kellogg that the interstate commerce has under consideration the advisability of 0 discussing in its next annual report tho the matter of the capt or overcapitalization is well known in Waa washington hington INt members embers of iho the bo body boly ly showed very plainly during the progress of the harraman Harrl man bearing hearing that this thought though was running in their minds it la Is known that during tho the closing days of the fifty ninth con gribas mr roosevelt had a number ot of conferences with senators and representatives senta tives on the subject ot of inflated or i watered cred railroad oad stock and that be he will touch upon it in his first message to the next congress Is generally believed A washington correspondent says it Is desirable to take a sort of inventory of the railroads made not by themselves but by the government whether this will be done now largely depends upon the attitude which those in authority over the roads assume asburn e if t they are agreeable the government intends to shortly inaugurate an exam nation of the most thorough and searching character into the condition and affairs of the interstate railroads it Is contemplated that this shall bo be done not by the usual agents of the government or the interstate commerce commission but by a corps of experts carefully selected tor for this special purpose whose obvious disinterestedness est edness and whose high reputation will vouch tor for the thoroughness and impartiality of cf their work A number ot of the leading auditing firms have been communicated with so your corre Is informed and it Is con contemplated tern that several hundred expert auditors will be engaged for a period of a year or more on this task what will the railroads think of this As a matter cafter of tact fact what can they do but accept the situation with as good grace as possible mr roosevelt holds all the cards let a railroad throw open its books to the government exports experts and the people will at once say that road is all right it has nothing to conceal but let it howl and squirm and refuse and then what will the public say except this road is rotten or it would not tear fear examination the off effect act upon the securities will immediately be perceptible and it needs no wiseacre to point out to what that effect vill be therefore it is difficult to see how the railroads can afford not to throw open their books this proposition can not fail fall to commend itself to all right minded persons and it if the railroad magnates are halt half as scared seared a aa they say they are the quicker the examination is made tho the better tor for them and their roads 1 I doubt it very much said a distinguished senator if on examination it will be found that the railroads in general are over capitalized to any considerable sid erable extent when all the points relating to their value are considered I 1 doubt it if the dividends it if averaged up have been excessive in more inore than a few flew instances if the examination proceeds to the end the result will be the most important and far reaching event since the civil war it will be a government audit of the railroads and the declaration by the government that a road has not been over ove rca capital pital iced will give its securities a standing never before possessed it would stamp them with government approval and be almost an unwritten guarantee of their value no to railroad could afford to be without such a certificate ol 01 character |