, 1870-01-17
RAILWAY LEGIHLATIQN.

There are several measnxe8 now pending
before the Constitutional Convention IN
tended 10 correct soma Of tha mora dagtant
abuses of railway management hut there
is a wide difference Of opinion az to the Ie-
gal authority Of the convention. So far as
vested rights are concerned, it is admitted
that convention can do no more in the
way Of impainnq them than Legislature
could do But there are soma things which
it can do far moro efeotually than Legis-
lature. It may, for instance, compel all
railroad companies originally created by this
State to do and perfoan ali their official
buainess in this state. Il may also prohibit
any increase ot capital stock by the process
known ss " watering" an enarmous abuse
Of power, By which both stockholders and
people bare been swindled out Of millions
Of dollars We Published, some months ago,
q carefully prepared statement showing the
enormous increase Of capital stock by the
railway companies Of the country, without
the payment Of one dollar Of additiona,
capital-and this, too, in cases Of companies
whose roads were deficient in rolling-stock,
and wanting in substantial tracks,
One effect Of the removal Of the Offices Of
The railway companies to New York has
been to convert the directories into gam
bliug-houses, and the property into 80
much capital for gambling purposes Ths
Directors Of these roads, who hold their
position for mere tock-jobbiug purposes,
care nothing for the welfare Of the road;
they buy and sell their stocks daily, ard at
moments notice can sell out all they own
in my road II il be to their interest to
dep1em the stock, they. withouta moments
hesitation, do 80. The business Of the rail-
road Is Of the very slightest ooncern they
as means with which to op-
erate at the Brokers' Board.
In order to make good their private LOSSES,
or TO sweN their individual profits, they
~nter the stock and then sell ont the new
Directors, after 30 running tho road as to
repeat the operztion Of watering; and thus it
goes On until the original stock is perhaps
doubled, and the earnings, which should be
applied to tho increase Of rolling stock, the
laJing Of new rails, and the preservation Of
The property, ere taken to pay full divi-
dends upon thiB fctitious capital. In this
way the stockholders and the public are
victimized; and to meet these enormous de-
mands upon the rece1pts the company has
to practise e1tozt1ou wherever it has no
competition, and to run ut a sacrifice where
there is oompeting line.
The State Convention has the power to
correct, or at least check. these evils, by
]. Requiring that every railroad company
originally incorporated by this State ahAll
keep its principal Office in this State, where
all meetings Of ita Directors shall be held,
and where tho hooka for tha tranafer Of
stock.shau be kept, and such tranhers uhde-
.. That the capital stock or debts Of no
railroad company shall be increased By any
other mode than sale Of It's securities for
cash, actually paid into the treasury of the
company, and expended in improving its
property.
8. That no railroad company chartered
BY this State shall be consolidated with
another, nor any railroad belonging to one
company leased to smother company, OF to
any individuals, fog longer period than
FIVE years.
4. Extend The principle Of minority rep
resentstion to elections Of Directors les
peoposed By the resolution offered By Mr..
Medill), 50 that the bona fde stockholders
NAV hare at least representative in the
board, even though the spectators hare a
majority.
The orporation of these provisions IN
the constitution viii raise no doubtful ques
tions Of authority, but will have the effect
ultimately, II not Immediately. OF rescnlng
the railways Of this State from the hands OF
the gamblers Of Wall street, and Of requir-
ing them to be conducted IS institutions es-
tahlished for the public good, rather than
as instruments Of corruption and op,
: preston.