St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1889-01-17

A statement is appended, giving the
date when the income certificates were
issued, showing the issue to have been
made in October and November, 1887,
and in April, 1888.
THE ATTORNEY GENERAL REQUESTED TO IN
yEsTIGATE AND PROSECUTE.
Office of Board of Railroad and Warehouse
Commissioners, st. Paul, Nov. 80, 1885,
Moses e. Clapp Esq.-Attorney General.
State of Minnesota. Dear Sir: This COM
mission would call your attention to the ac-
comp an ing correspondence between it and
the Minneapolis & Pacific Railroad company,
including two attached sheets in type the
first of which is headed, Analysis of inter-
est and discount included in cost of road"
and to ask your official opinion as to whether
the issuance of the so-called income eertifi-
Gates by said company, is in violation of the
provisions of Chapter II of the general laws
of 1887.
We also inclose for your use in this con-
nection printed form of said certificates,
furnished by the company S general solicitor.
Itappears from the company's reports and
letters from its officers, now on file in this
Office, that the company includes the amount
of these certificates aggregated at their par
value, i'll the cost OF It's road as given in its
official returns. This will be found neces-
sary to bring the cost of tine railroad equip
ment to 35.715, as given in the accompany
ing letter, dated June 8, 1888; though this
fact would probably not be conclusive of the
.
Gates, in the manner i'll which they were dis
posed of constitutes Fictitious increase of
the capital stock of Indebtedness.
But the fact that the co mpany contracts,
in and by the certificate TO receive it from
the holder in payment of any subscription to
its capital stock at the amount Of the face
value of the certificate, $4,000 each, al
though disposed of by the company, as ap-
pears from its general solicitors letter of
June Is, 1888, at S133 per thousand. or at
1873 per cent of its par value, presents to
our minds much more serious question.
The Legislative act referred to provides
that lit shall not be lawful for any railroad
company to issue certificates of shares in the
capital stock of such company until the
shares tor which such certificates are to
issue shall have been fully paid for
Though the instruments in question are
nominally income certificates it plainly
appears from their terms that as pledges Of
or obligations upon, the future income of the
company their commercial value can be
but trifiing, owing to remote conditions and
improbable contingencies upon which any
thingis payable. while the fact that they are
convertible into stock, which, when issued,
would appear to stand on par with other
stock that the company is forbidden by law
to dispose of, except 1t be fully paid, would
seem to constitute such certificates much
more in the nature of stock than of income
certificates.
Should you be of the opinion that the law
has been violated, we desire you to institute
the required proceedings for the punishment
of the offenders. By the commission.
e. S. WARNER. Secretary.
The careful reader will have no diff
Guilty in discovering the effect OF this
Discount" item of over SIT, 1000. 900.
The letter of the railroad commission to
the attorney general, instructing him to
investigate and prosecute Mr.. Wash
burns corporation if he finds the law
has been violated, tersely explains how
the income certificates are to be trans
formed into full paid par stock. The
freight and passenger rates will then be
gagged as though the road had cost
ST, 000,0 900 more than it really did, and
the producers or business men who use
the road will be called upon to pay in
terest upon the S17,000,000 of water SO
cunningly.
And this is the man whom the farm
ers and other members of the Minnesota
legislature are invited to bestow
laurel wreath upon next Tuesday by
electing him to the United States senate.