Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1902-04-09
VETOEs MERGER BILL
GOV. cuMMlNs DlsAPpRovEs
MoLEsBERRY MEASURE.
Reason in Public Policy-Legislstion
Declared to Be in Interest of BurlinR-
ton Deal and Styled Unwise-Final
Passage Is Improbable.

Des Moines correspondence:
Governor Cummins vetoed the Moles.
berry bill to remove the limit of bonded
Indebtedness that railroads organised in
Iowa may incur, which was said to be
In aid of the Great Northern merger"
In his message to the Legislature the
Governor gave two reasons for his action.
He said he believed the law to be tech
nically unconstitutional in making an
artificial classification Of railroads, and
that the measure is against public policy.
He notified the Legislature that even, il
the bill were so amended as to make II
constitutional he would veto it on the
ground of public policy.
The bill passed the Senate by vote
of 81 to and the House by a vote of 81
to II, but it is doubtful if it will be able
to muster the constitutional two-thirls
vote required to pass it over the Cover
nor's veto.
Reasons Are Given.
Governor Cummins says in his veto
message:
II the bill were in harmony with the
constitution l would be unable to give my
approval, for the reason that it is rad
tcal departure from the policy which has
controlled the State in its relation to
corporations for more than half CEN
fury, and its effect would, in my judy
ment, be SO subversive of the best inter-
csts of the people that it well deserves
further consideration by the General AS
sembly.
1T has not only been the policy Of the
State of Iowa, but of substantially every
State in the Union, to restrict in some
manner the liabilities of its corporations.
The bill which l am examining proposes
to take off for the first time every limita-
ton and confer upon n class of railway
companies a privilege which, within the
limits of my investigation, has no parallel
in modern legislation"
The Governor thought the law would
affect the Burlington, Cedar Rapids and
Northern, the Chicago, Rock Island and
Pacific and the Chicago, Burlington and
Quincy railroad companies. or the first
two he says:
II am of the opinion that there is no
necessity for the bill under considera-
ton in order to enable either of these
systems to be operated more economically
or more safely. cannot resist the be-
lief that the real application of the pro-
posed amendment would be to overcome
real or imaginary difficulties growing out
of the purchase of the stock of the Chi
cago, Burlington and Quincy Company by
the Great Northern and Northern Pa
cidc railroad companies.
New company's Object.
ut is not difficult to find the motive for
the organization of the new Chicago,
Burlington and Quincy Railway Com
pany. The old company, which had been
so prosperous, could not, either by rea.
son Of the laws Of Illinois, or by reason
of what had occurred in the purchase OF
its stock by the two Minnesota COM
panies, create the volume of indebtedness
which those who were interested desired
to create. 1t was, therefore, necessary to
add another corporation, and Iowa was
chosen for its domicile. 1t is a matter
of common knowledge that the new com.
pany, with an insignificant amount Of
capital stock actually taken, has leased
the entire system of the old company. II
must be true that it is without substau.
tial assets, save the lease, and with the
rental attached to the lease, its value, ii
anything, is purely speculative. In this
situation 1t seeks the power to incur in.
-neotedness without limit.
1T is one thing to grant to railway
companies the right to borrow the money
needed to aid in the construction and
equipment OF their lines Of railways. II
is quite another thing to authorize elias.
Of railway companies to incur unlimited
obligations without respect to the amount
| of their stock or the worth of their prop
erty. cannot bring myself to believe
that this species of special legislation is
consistent with the public welfare or nee
essary for the legitimate development OF
railway property. On the contrary, it i.
my firm belief that corporate power tc
issue the stocks and indebtedness needs
regulation rather than expansion"