The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-12-17
SAYS IT HAS WONG TITLE
SHOULD BE CALLED AN ACT TO
PREVENT COMPETITION BY
OTHER LINES AND
no PREVENT BUILDING OTHER ROADS
Mr. St. John Says That It Would Injlre Hi
Road f the Bill Becomes law, and
Gives His Views at Some
Length,

Lengtn.
Editor Constitution: | have lust re-
ceived and read a most remarkable bill.
which has quietly and without notice OF
any information being given out CON
corning the same, been put through the
Senate and is now before The House of
Representatives of the Georgia Legisla-
ture.
The bill is entitled an act to limit the
power of railroad companies to issue
bonds, etc. 1t should properly be enti-
tied Fan act to prevent competition by
ether lines. by creating new systems.
and to prevent the building of new rail
roads in this State
PROVISIONS or THE BILL
The bill provides that hereafter nc
railroad company shall have power to
issue its bonds secured by deed. mort
gage or other lien not heretofore publicly
recorded, or amy kindsof b nd wiatsoeve
covering any of its capital stock or any
property located in this State. unless said
issue of bonds shall be approved by the
Railroad Commissioners of this State.
1t requires all corporations desiring t.
issue bonds or make II NOR gage securine
the same, to file an application with the
Railroad Commissioners setting forth TIE
amount to be issued, the purpose of the
issue, the property, and allows interested
parties TO be heard in opposition.
No such issue shall be approved by the
Commission unless it appears that it is
necessary for the legitimate purpose OF
the corporation and none of said bonds
shall be used TO pay for any railroad
properties bought, except at the fair and
reasonable value of such property. The
company shall not apply the proceeds OF
such bonds to any purpose not specified
In the certificate of the Commission
and THE Superior Court of any county
of the State where the company has an
office can on the application of amy
stakeholder, bondholder or creditor, issue
an injunction and plunge the comp ny m
to litigation. 1t also provides that the
capital stock of any railroad company
formed by consolidation or merged in
any manner shall not exceed the capital
stock of the corporations so consolidated
or merged, and prohibits the issu1nce Of
any bond or other evidence of debt as the
stock of the corporations so consolidated
merged or purchased
This act has not been noticed by the
press of the State. 1t is surprising in
the extreme that so radical a measure
should not have at least been published
and commented on.
EFFECT If IT BECOMES A LAW
Whatever object the introducer Of this
act may have had, its effect is manifest
The Seaboard Air Line, the Georgia and
Alabama and the Florida Central and
Peninsular are about to be consol dated.
and new securities are about to be is,
sutd on the consolidated properties
Their financial arrangements 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 consolidation of these prop
critics.
AI1MCST a MONOPOLY.
Another Railway, by its purchases, has
secured almost monopoly of the bust
ness of this STAGE. 1t has the different
railroads in the State separated The
SeaboaTd Air Lime combination intro
dlsces at once into this State active. Wig
orous, efficient competition. THIS bill
defeats that competition and perpetuates
the existing railway monopolies You
will ncte that it permits any corporation
to still issue additional bonds, provided
the mortgage securing the same has al
ready been publicly recorded.
Another railway has now ON record in
this and other counties mortgage secur-
ing S120000,G00 Of bonds of which only
a small part has been issued, and the
pos To hn 1n1 fi,af
determines. AT present only about $780,
000,C00 have been issued, but as the
mortgage has heretofore been recorded
that company under this act en- cen
time issuing its bonds up ITO the 500
000,000 without having to call on the
Railroad Commission or consult any
body else.
The Seaboard Air Line net having pub
licly recorded the mortgage under VIII ch
it proposes to issue its new securities will
be prohibited from getting out any fnan-
cial plan for which it cannot secure the
Endorsement of the State Railroad Gem
mission, not as a financial plan, but I'M
der the restrictions of this act. Even
the Railroad Commission cannot permit
the issue of these bonds, however advis-
able 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 section
Of this act, il the Seaboard Air Line
should desire TO effect a merger of its
roads by one of them purchasing the
others, it is prohibited to issue any bond
or ether evidence Of debt as the consid-
erations for such consolidation, merger or
purchase.
See how this bin can work. A railroad
company goes to the Commission and
asks TO issue bonds. An interested ~
stakeholder who has bought up his stock
in the interest of a competitor, appears
and resists the issue Of the bonds. IL
the Railroad Commission d.sagrees with
him. he insists that the amount and pur-
poses are not within the met He then
files a bill to enjoin the Railroad Gem
mission from granting the permission,
and even if the injunction is refused in