The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-12-08
BAcon,s RAILROAD BILLS. T.
Mr.. q. P. Plant Points Cut How
They Would Irjure the State.

They Would Irjure the State.
JACKSONVILLE, FLA, Dec. ), 1892
Hon. Fleming q. duBignOn, Of MeSsrs.
ErtUin, duBignon d Chisholm, General
Counsel Plant System Of Railways
DEAR SIR have read with care the two
bills which have passed the House OF Rep
resentstives and are now pending before
the Senate Of the state of Georgia. The
OBJ ject of one OF them is "to define and
limit the right and power 60 hold and vote
shares in the capital stock Of railroad com
panies by trustees and other representa-
tivss and by persons holding such shares
jointly or In common and by corporations,
the other limits the issuance Of stocks and
bonds and the creation of floating indebted
ness by railroad companies. l have been
Informed that hearing has been accorded
by the railroad committee Of the Senate to
those who desire to be heard on the subject
Of these bills, which will be had on Wednes-
day evening, Deo Z. AS you are we'll aware, i
have had interests in the state of Georgia
for almost forty years and have made in
vestmsnts IN that state which justify, II in
deed they do not require, that I should ex~
press an opinion, for what it may be worth,
on the subject Of this proposed legislation;
| IL is with regret that / am forced, by rea-
son of prior engagements which l cannot
| displace, to limit what have to say on the
subject within the bounds of a written
communication.
have not the statistics before me, but
feel that am very safe In saying that more
than half Of the railway mileage in the state
OF Georgia is to-day in the hands of re-
tad kxyK he
pie Of the state of Georgia. in common with
other portions OF the south, have suffered
severely from the financial depression which
SILL continues, though to not so great an
extent; the stocks and securities Issued by
the railway companies OF the state of Geor-
gia are held, in large part, by citizens OF
that state. and II there ever was time in
the history Of the state when the holders of
such stocks and securities, whether citizens
Of Georgia, OF citizens of other states or of
foreign countries. needed legitimate aid to
enable them to realize something from their
investments, that time is to-day.
IL is g generally recognized principle that
the value Of any commodity depends, to
| great extent, upon the number of people
who deal In t.; law prohibiting corpora
| lions from purchasing cotton would at once
be recognized as dangerous legislation. in
that 10 would take out of the market many
purchasers, thereby tending to depress the
| price. Railway securities would be affected
more than cotton by such legislation. II cor
| porations now authorized by their charters
10 hold and vote railway stocks and to
/ make Investments IN railway bonds are pro-
| hibited by q law Of the state OF Georgia
| from seeking this outlet for their capital, a
| very serious depression In the value OF
| Georgia railway securities must inevitably
| follow. The greater part Of the business of
the civilized world IL to-day done by cor
porations, and the tendency OF the age
seems 10 reach IN that direction, so that to
| eliminate the corporations from the field of
purchasers Of any commodity Is practically
TO deprive that commodity of a market.
Railway reorgAnizAtions Of to-day aim
generally and properly at protecting, as far
| as possible, all interests In the railway
property 10 be reorRaniEed; the holders OF
first mortgage bonds recognize that second
| mortgage bo1dholders, debenture holders
and even the holders OF the common stock
are entitled to something on the reorRaniza-
ton; the courts lend their aid in protecting
| the interests OF all concerned, recognizing
that while there may be many stockholders
who have become such merely for purposes
OF speculation, yet there are others who are
legitimate investors and are entitled to
such protection as can be afforded.
The bill TO limit the issuance of stocks and
bonds, and the creation of floating indebt-
edness by railroad companies must seriously
embarrass the work OF reorganization of
the many railroad companies of the state of
Georgia now In tine hands OF receivers. IL
will be admitted that the most difficult Of
all properties Co value are the railroads !;
their tangible properties, such as their
l. Il hn 90
have a market value and any attempt to
limit the value Of the stocks, bonds and
other securities OF railway company to its
tangible property must, on due considera-
ton, be adjudged impracticable. The value
Of the stocks, bonds and other securities OF
a railway company depends upon great
many variable factors, such as the rates
which can be charged, the competition
which exists and the management OF the
property. The same railway property may
we'll vary 90 per cent. in value with
different homogeneous, and reduc-
ton of rates by railroad commissions or
resulting from competition may bankrupt,
in few months, a company whose stocks
are to-day selling above par. l am sure
you will recognize the statements l here
make as stubborn facts which have been
illustrated time and again within the MEM
ory OF all of US. Under these circum-
stances, 10 limit the stock and bond issues
| OF railway company 10 Jus pIico "uAcu LIS
property may bring under foreclosure OF
mortgage, or to the value Of a railroad and
its proper equipment as such value may be
estimated to-day In the present depressed
condition of affairs, would inevitably lead
to the wiping out of all Of the stocks and
many of the junior securities OF the rail-
roads Of this state now in the hands of re-
celvers. / am convinced that such legisla-
ton would destroy enormous values in the
state Of Georgia.
We must ali recognize that the state of
Georgia is largely dependent for its pros
perlty upon outside capital, and it neces-
sarily follows that whatever tends TO keep
capital away from this state tends to re-
tard its development. The two bills above
referred to, if they become laws, will not only
seriously restrics the number of investors
In the stocks and bonds OF Georgia railway
companies, but will put the world on notice
that before an investment can be made in
such stocks and bonds careful examina-
ton must be made to ascertain whether the
issues are authorized; these clouds thus
cast upon the railway securities OF your
state must inevitably prevent the great mass
Of investors from putting their money in
Georgia, for the railway securities OF other
states are many in number and have no