The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1899-12-22

vigorously Attacked by Vice Pre~i-
dent sc. John He says 1t should be
Entitled ssAn Act TO Prevent Conn
petition With Existing lines.
ATLANTA Journall

A@4AA0A 9ooA
l have Just received and read a most
remarkable bill. which has quietly and
without notice or any information be-
ing given out concerning same. been
put through the senate. and Is now be-
fore the house Of representatives of
the Georgia legislature.
This bill is entitled an act to limit
b power OF railroad companies to is
sue bonds, etc. 1t should properly be
entitled AN act to prevent
ton by other lines, by creating new
systems. and to the building
of new railroads in his state"
PROVISIONS OF THE BILL.
This bill provides that hereafter no
railroad company shall have power TO
issue its bonds secured by deed, mort
gage or other lien not heretofore pub
ncly recorded, or any lind of bond
whatsoever covering any of it's CAPT
tai stock or any of its property located
in this state, unless said issue of bonds
sha be approved by the railroad COM
m~issioners of this state.
1t requires all corporations desiring
to issue n or make a mortgage Sc
curing h anne, to file an application
with the railroad commissioners setting
forth the amount to be issued. the
purpose of the issue. the property, and
allows interested parties to be heard
in opposition.
Nc such issue shall be approved by
he commission unless it appears that
it is necessary for the legitimate pur-
pose of the corporation, and none of
said bonds shall be used to pay for
any railroad property bought, excep
at the fair and ~reasonab value of
such property. The company shall not
apply the proceeds of such bonds to
any purpose not specified in the certifi-
cate of the commission. and the supe-
r1or court of any county of the state
where the p has an office can
on the application of any stakeholder,
b~ondholder or creditor, issue an in
junction and plunge the company into
litigation. 1t also provides that the
capital stock of any railroad company
formed by consolidation or merger in
any manner shall not exceed the capt.
tai stock of the corporations so consoli-
dated or merged, and prohibits the
issuance of any bond or other evidence
of debt as the consideration for any
such consolidation, merger or purchase.
This act has not been noticed by the
press Of the state. It is surprising in
the extreme that so radical a measure
1AoNA1 W. oN A~ooh oSSh
ed and commented on.
EFFECT IF 1T BECOMES A LAW.
Whatever object the i%ntroducer of
this act may ave had, it's effect is
manifest. The Seaboard Air Line, the
Georgia and Alabama and the Florida
Central and Peninsula are abou to
be consolidated, and new securities are
about to be issued on the consolidated
properties. Their financial
ments have been based On the present
state of the law. Parts of each of
these properties lie in Georgia. The
passage of this act can defeat the con-
solidation of these properties.
ALMOST A MONOPOLY.
Another railway, by it's purchases,
has secured almost a monopoly of the
business Of this state. 1t has the diff
ferent railroads in the state separated.
The Seaboard Air Line combination in
PRODUCES at once into this state active,
vigorous, efficient competition. This
bill defeats that competition and per-
petuates the existing railway monopo-
lies. You will note that it permits any
corporation to still issue additional
bonds, provided the mortgage secur-
ing the same has already been publicly
recorded.
Another railway has now on record
III IIllS LII Quiet COuIlI1SS d mortgage
securing $120, 000, 900 of bonds, of which
only a small part has been issued,
the rest are to be issued as that COM
pany determines. At present only
about $50, 0O0, 900 have been issued, but
as the mortgage has heretofore been
recorded, that company under this act
can continue issuing it's bonds up to the
s120, 0OO, 900 without having to call on
the railroad commission or consult any
body else.
The Seaboard Air Line not having
publicly recorded the mortgage under
which it proposes to issue it's new Sc
curities will be prohibited from get
ting u any financial plan for which
it cannot secure the endorsement of
the state railroad commission, not as
a financial plan, but under the ~restric-
tons of this act. Ever the railroad
commission cannot permit the issue of
these bonds, however advisable they
may think them, unless the amount is
restricted according to the terms of
this act.
HOW THE BILL WOULD WORK.
Furthermore, under the second sec
ton of this act, if the Seaboard Air
Line should desire to effect a merger
the others, 1t is prohibited to issue any
bond or other evidence of debt as the
consideration for such consolidation,
merger or purchase.
See how this bill can work. A rail-
road company goes to the commission
and asks to issue bonds. An interest
ed CD stakeholder, who has bought up
his stock in the interest of a competi-
tor, appears and resists the issue of
the bonds. If the railroad commission
disagrees with him, he insists that the
amount and purposes are not within
the act. He hen files a bill to enjoin
the railroad commission from granting
the permission, and ven If the injunc-
tim is refused in the first instance, the
bill rests in court as a cloud on the
securities. Even il the suit eventually
fails, it's object Will by that time have
been accomplished and any plan of re-
organization broken up. I am advised
that the Southern railway is urging
the passage of this act; that they are
urging the members to vote for 1t as a
fight between the Seaboard Air Line
and the Southern. in which the state
has no interest.
A BOAST IN NEW YORK.
The boast has been made by the op-
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