Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1902-08-02
Iowa Chief Executive Doubts the Legality
Of Change in that State.
TO CONFER WITH ATTORNEY GENERAL
lIr. 0ummins Says he VIII Thoroughly
Y Investigate Increase in Stock.
HAS APPEARANCE OF BEING wATEHEr
~ This Has Been Done Governor says
He VIII Take Action 10 Force
q CompIisnce of the
Law.


DEs MONIES, Ia, Aug 1.--Governor
Cummins announced today that he is in
vestiRating the recent organization Of the
Chicago, Rock Island a Pacific Railway
company with q view Of ascertainlng
whether the organization is in all respects
IN harmony with the laws Of the state OF
Iowa He has not yet conferred with the
attorney general, but will do so as soon as
the attorney general returns to the city.
Governor Cummins stated today that the
FIRST question he Is inquiring into Is as
to whether the imitation OF capital stock.
which is contemplated by the reorganiza-
tion, Is consistent with the Iowa law. In
the second place, he desires to know Just
how far it is lawful for New Jersey cor
poi ton to own and control the property
Of railway owned and operated in Iowa
He has not reached q conclusion on either
Of these questions and declares that he
means to give them a thorough investiga-
tion before he decides what his duty toward
the new company may be under the
premises. ut may be-" he stated, that
the Iowa laws contemplate as much latitude
as this company has used, but doubt 1t
very much"
ont OF Harmony with Laws.
Governor cummins in speaking of the
matter said:
1t is my opinion that this reorganization
Sc out of harmony with the Iowa laws.
may be mistaken, but II / have read the
press dispatches Alright there has been
such an imitation of capital stock here as Is
not contemplated by the laws Of this state
1t Is true that there is no limit placed
upon the capitalization OF such a COM
pany, but there is a limit upon the In
must be something shown TO the credit of
the stockholders of such a company whicn
will represent the difference IN Increased
Il is my understanding that under the
Rock Island plans Of readjustment each
receive a $4,000 bond secured by col
lateral trust mortgage upon pa,. tne preseshi. sem
they they receive csds IN the Rock Island company
Of New Jersey seventy shares In pre-
: ferred stock. and 100 shares in common
TO the extent Of per cent from the earn
tngs OF each year for period o. seven
4 pss .ceht for an additional period Of seven
years, after which II is preferred, he
nsys TO hs. shs extent q per S Gsns Ssns pIt5 tn
Now. the capitalization Of the old Rock
Island company was but Ne.OO0,00o, while
the new company, located In Iowa, declares
a capital OF $i25, 100000 There must be
somsthing to my mind; to show how more ore, tnhH ian
increased capitalization is not excessive
iniations or the stock which has been is.
bill which 1 vetoed last winter, It would
have been possible for this new company
20 organize without any difficulty, as oil
limitations to the indebtedness OF such cor.
porations we're practically removed by that
act in its original form. Under the present
law there are limitations In this regard:
/ am not prepared TO state that the
Iowa law has any penalties which could be
inflicted for violation OF such statutes, but
i am not willing TO sit by and allow q
proposition Of such enormous size TO anal
Eamate without induirtng into the methods
which Il employs and their conformity te
the state laws. i am convinced that such
a Capitalization OF capital and power Il
dangerous, TO say the least, and cannot
be encouraged without threatening business
interests. Such C centralzation OF capita
means that there may follow an explosion
which, when II comes, Is likely not only 4
effect one. but many interests. There 4
duty TO inquire into this present case II
Iowa
Judge John /. Ollie. assistant attorne
Tor Iowa and one OF the directors OF tn
new Iowa company. expressed surprise o.
learning OF the plans Of the governor. bu
declined to discuss this phase Of the affaiE
The belief here is that the governor vii
10 into court as soon as possible to tes
the two legal questions involved.
NEW YORK. Aug. 1.--Regarding the dis
patch from Des Moines that Governo
Cummins may take action against tn
Rock Island company an on1cial Of tina
road said today:
] DO not believe there is any point q
Iowa can be attacked. The incorporate
papers were drawn up with due regard 10
4he laws OF that state and we believe tha
they will hold IN law.