The Emporia news. [volume] (Emporia, Kan.) 1859-1881, 1874-10-23

as TAR as these men are concerned, |
be taught salutary lesson.
Respectfully, JUSTICE.
PREFERRED RAILROAD
STOCK.
EDITOR News I'm the Ledger of
the 10Th inst. is the following card
Editors Ledger FL understand
that q report is being industriously
road bill OF last WinIeI known as
1.-THE preferred stock bill" l have
only this to say: The charge is IN
tru,. from first to last, and without
further explanation l will say that l
tried to secure a formal adinu n
ment of the Legislature before The
bill could be passed.
NJ. j. FIREY.
Did Mr.. frey vote against the
bill? He did not. He either dodg-
ed the vote, or was absent when i'm
portant legislation was being had.
In either case he was unfaithful to
the trust conferred on him. We are
reliably Informed that Mr.. Fiery
went TO the Senate chamber when
he knew the bill was coming up on
its final passage.
He did not, however, dodge one
vote. When Mr.. Anthony moved
that all members who had free rail-
road passes be required to deposit
them with the clerk, did he vote for
it? DO you suppose it is possible
that he had free pass in his pocket
from a "bloated corporation" and
that he would vote against such a
resolution? 1t was even SO. He
did have one and voted against the
resolution. But l believe after this,
and after the Ledger had so charg-
ed him, that he says he gave it up.
Ii he did not intend to use it why
keep it so long?
But this is not what l particularly
cared to write about.
How about that law in regard to
preferred Stock ?" Did you ever
read it? If not, it would be well to
do so before condemning those who
did vote for it. The law is round in
the acts of the legislation for 1874,
on page Ids, and may be found in
the Office of any Justice of the
Peace. The first section is as fol-
lows:
"Any railroad company organized
under the general laws of the State
of Kansas, or any special law of
the Territory of Kansas, may issue
preferred stock to any amount not
greater than one-third of the aggre-
gate amount of capital stock of such
company: PROVIDED, That in no
case shall such company issue an
amount greater than The accrued or
accruing interest on their bonded
debt for a period not exceeding
three years. and existing indebt-
edness: Provided, That such
stock shall not be sold for less than
eighty cents on the dollar"
The next section, which is a too
long to be incorporated in this article,
provides how it shall be issued, sc.
that before it can be issued at least
two-thirds of the stock shall be
properly represented at a meeting
of the stock holders, and shall con-
sent to it. 1t then provides for a
dividend on this and common stock :
THAT any county, city, incorpo-
rated town or city holding stock
In any railroad company, shall be
allowed to surrender and OK
change an amount of the common
stock held by them for preferred
stock, in proportion TO what the
preferred stock bears to the origi
mai or common stock of such COM
pany."
There are several other restric-
tions and limitations in the act, all of
which are intended to protect the
interest held in the original stock.
And why was this act passed? 1t
is well known to all, that all of our
railroads have very heavy mort
cages on these, and that they have a
large amount of interest to pay.
Upon the failure to pay such inter-
est the mortgage can be forced to
pay such Indebtedness.
1t must be borne in mind that the
common stock is not embraced in
these mortgages, and that if the
roads should be sold under the
mortgages, then the holders of COM
mon stock would be precIuded from
ever collecting anything on their
stock, unless the roads sold for
more than enough to pay the mort
cages. This could not be, for they
are greater than the value of the
raods in most instances.
At the time of the passage of this
act, the railroad companies, by rea-
son of extending their lines and 9TH
er heavy expenses, were much in ar
rears on their interest, and if some
way was not provided their roads
would be sold and all common
stock, such as Lyon county has,
would be worth nothing.
1t will further be observed that if |
either OF the roads we are interested |
in should Issue preferred stock, then
our county would be able to ex-
change some of our common to pre-
fered stock.
There is also a provision of that
act that prohibits the use or sale of
the preferred stock for any purpose
other than the payment of bona fde
indebtedness of such company ex-
isting at the date of it's passage, and
its interest, except in exchange for
stock owned by counties, cities and
towns.
1 submit, then, that if the money
Fan be used for no other purposes,
md that if such Indebtedness did
exist, (and II could not be issued
then the roads would
have to be sold, if its payment
could not otherwise be made, and
hat it would be far better for those
owning comInon stock that this
should be done than that the road
De sold, and the original stock be-
come thereby entirely worthless.
The money received would be ap-
,lied to existing debts and interest.
The roads were bound fer such, and
payment could be enforced. 1t is ,