St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1886-12-12
WANT A NEW LAW.
So Say the Railroad Commissioners in
Their FIRST Biennial Report to
the Legislature.
They Would Have More Powers in Some
of the Important Points of Their
Business.
Watering of Railroad Stocks is Han
died without Gloves--How to
Prevent 1t.
st. Paul, Minneapolis and Duluth
Elevators should be Made Pub
lie Warehouses.

sioners, j. Ii. Baker,, 5. 5. Murdoch and
George l.. Becker, have completed their
first annual report to the Legislature, which
contains the draft of number of laws
recommended by the commissioners, with
the reasons why the laws should be en-
acted. In submitting their report the com
msSiOners say:
For good and important reasons we have
deemed 1t essential TO more definitely denne
the duties and powers OF the commission
These duties and powers are now included in
the act OF March ., 1889, entitled: IAN act
for the regulation of railroad companies. )"
The blending of two or more distinct subjects
III the above law is open to the criticism that
iii not III accord with sec. -, art. 4, of the
constitution. 1t has, therefore, been con-
sidered OF great Importance that these duties
and powers be embraced in d bill especially
designed for that purpose, and strictly in
accordance with the rule of the constitu-
ton, as set forth in the section above re-
ferred TO, which saws mo law shall en-
brace more than one subject, which shall be
expressed in the title" These duties and
powers are therefore presented IN one pro-
posed act with title indicating the purpose
and intent of the law. We have endeavored
10 embrace in this suggested law such pro-
visions only us are in the highest degree i'm
portant, and such as the ripest experience of
more advanced states have proven and tried
and such as the courts have sustained. 1t is
proper also, to state that the bill here forInu-
lated contains the essential elements OF the
bill introduced into the senate OF the United
States by the committee of inter-
state commerce, with such changes
as were necessary to proposed regu-
lalion of railroads by state authority.
Should the substantial features of the inter
state commerce pill become II law, us our own
members of congress now believe. the legal
importance OF our state laws
REGULATING CORPORATE CONTROL
working harmoniousIy with national statute
Tor the same purpose, will be fully conceded
Even should that bill fail we will yet have
aHa!led ourselves of the most advanced ideas
and cearest principles restraining corporate
aggression yet enunciated. In addition to
this, other subjects than those of the powers
and duties Of the Commission, and unpro-
vided for in the existing statutes
are herewith presented i'll separate
bills, in order that each may stand upon its
merits, and not prejudice others which the
| legislature, in its wisdom, may deem import
ant. The principal reasons which have Sug-
! gested the necessity for these proposed
| measures are given with each act, including
that also OF proposition for a conStituta
amendment. Attention is invited to Il pro-
posed change in the tenure of Office. Under
| the present law, all the commissioners go out
of office at the same time. 1t is proposed to
so change the term of Office that
one commissioner shall be appointed
each year, so that the board may retain
in its membership commissioners ex-
perlenced in the duties and work of
the board. The interstate commerce bill,
the state of New York and other states, re-
cOgnize the wisdom OF this policy. The act
provides for a more definite system of pro-
| cedure in cases where complaints are made
against common carriers. 1t is believed to
be comprehensive, simple and easy TO be I'M
derstoOd. 1t is also provided that in cases
where the commission find Il complaint to be
well founded, which the common carrier will
not remedy, suit shall be brought in the state
courts by the attorney general and
carried on at the expense of the state
Ample provisions are made for comp leIe
reports from railroad companies. In refer
ence to tariffs of rates, fares and charges,
provision is made for complete publicity, and
that there shall be no advance in such pub
lished rates without due notice. Section II
contains a substantial increase of power to
the commission with reference to the control
of rates, fares and charges which are fou nd
upon examination to he in any respect I'M
equal, unjust or unreasonable While it
does not invest the commission with
power to establish such tariffs in
the first instance, it yet places the
tariffs under their supervision, with
ample power to amend the same. when found
to be necessary. Provision is made that a
corporation snail not, in any way, limit its
common law liability in reference to prop
erty given to its custody as a common carrier
The bill provides sufficient penalties for the
violation of any of its provisions, which, in
the old law were uncertain and indicate
This proposed act, as we'll as the others here
with presented. have been submitted to the
attorney general for critical examination
add have been by him approved
FOR wATERED STOCK.
The provisions of the proposed law de-
fning the duties of the board are similar
to those of the present law, except as to
the points above mentioned. The commits
sioners submit bill for the governing of
fraudulent stock. to prevent the issue of
watered stock, etc, prefacing it as follows:
The general public opinion has been quite
uniform IN its demand for such provision,
and we have formulated the following statute
for YOUR consideration, which is not unlike
statutes already in force in many states. 1t
is believed that such provision, taken IN
connection with the preceding proposed act,
will control and prevent the issuing of ficti-
tious or ''waJered'' stock, as well as false
and fraudulent stock, a d so prevent over
capitalization Without entering into a
discussion of the modes and methods of
adding fictitious capital 10 the stock of rail-
road companies, under the pretc nse of ex-
tensions, consultations. STOCK dividends, or
whatever pretended purpose values are
falsely increased, there can be no question
but a wise public policy requires that such
opportunities for wrong doing be made inn
practicable. Capital should have its reason
able profit upon money actually invested. To
this end il is probable that basis for fair
dividends will yet lie reached by stated esti-
mates of the actual value of railroad prop
e. ties. By such method water" may
be driven out OF fictitious capital and Il per-
manenu remedy reached. In the meantime
the possibility of the manufacture OF Inflated
capital should be prevented, and these two
statutes are respectfully submitted, with the
statement that they are largely drawn from
the action and experience OF other states
prov d ny remedies for such evils, and it is
believed the, will accomplish the purpose
int n led and work no hardship to honest
companies with an honest purpose. The cap
italist who is legitimaiely investing his money
in such enterprises is entitled to this protec-
ton.
The bill proposed makes it unlawful to
issue stock or certificates until they have
been fully paid for, and all fictitious stock.
dividends and other fictitious increase of
the capital stock or Indebtedness of any
such corporation shall be void. 70 issue
such stock
SHALL BE A MISDEMEANOR.
This act applies to consolidated railroad
companies as well as to others. A report
from each road. regarding stock sold and
what was received for it, is required yearly.
Any violations of the provisions of the
act shall render any officer or director
of any such railroad company as
aforesaid, guilty of any such viola
ton, liable to indictment; and on
conviction shall be punished by fine Of
not more than $4,000, or Imprisonment in
the state prison not more than three years,
or both such fine and Imprisonment, in the
discretion of the court.
The board finds it expedient and import
ant that there should be statute governing
proceedings in increasing the capital stock
of railroad companies, so that such increase