Omaha daily bee., 1902-03-28
STOPS MERCERPLAN
Governor of Iowa Sees Danger in Removing
Limit Of Indebtedness.
BILL FRAMED FOR BURLINGTON RAILWAY
Executive Regards IL a. Against Pub
lie Policy 20 Permit Consolidation
of Railroad Interests and
NetOes the Measure,
lFrom a stan correspondentl

VI loHh a "a correspondent
DES MONIES, March ~21.-(special.) y
Governor A. b. Cummins TODAY sent 20 the
senate his hrst veto message. and II was
one almost sensational in character. He
disapproved Of senate file 1888, by Senator
Molsberry, a bill to change the law In rela-
ton to the Indebtedness OF railroad corpor-
atoms. The bill removes the limit OF in
debtedness as fixed by Law and leaves Il
with the stockholders themselves to fix the
amount of indebtedness by a clause in the
articles OF Incorporation. The limit has
heretofore been $16,O 900 a mile. or two
thirds Of the capital stock IL that would
permit more than the S1s,O 900 a mile.
The bill was avowedly introduced and
passed at the instance Of the promoters Of
the new Burlington Railway company. cap
italized at 500. 900, 900, which last fall took
a lease Of the property of the Burlington
Railroad company in Iowa and other states.
It was represented that the company needed
to raise more money TO pay for vast i'm
provements in Iowa and elsewhere and II
was to the interest Of the company to raise
1t by borrowing rather than issuing more
stock. The bill was unfortunately worded,
as amended, 80 as to raise a question as to
Its constitutionality. The bill passed the
senate, SS to z, and the house, 81 to 13. II
10 generally believed that the bill cannot
be passed over the veto Of the governor.
When the veto message was read In the
eenate it was made a special order for to-
morrow at 2 o'clock.
Governor Cummins, in his veto message,
treats first Of the legality Of the act, stat
ing his belief that as 1t was amended It Is
unconstitutional as constituting class leg
~islation. It was made to apply not to Iowa
railroad corporations in general, but to
those which have tracks in Iowa and other
states. He stated his belief that this IL
wrong. He then reviewed the history OF
corporation legislation in Iowa and showed
that no such legislation had ever been done
IN Iowa. There is not a state of the union
which has removed the limit Of Indebtedness.
Continuing, he concludes his message rs
follows:
Extraordinary Legislation.
conclusion to be drawn from the
foregoing review of the legislation OF the
state upon the question is that no corpora
ton, save insurance companies, and that
only for a brief period, has ever been given
he right to incur Indebtedness without
limit and without regard to the amount OF
its capital stock or the extent of its prop.
she state of Iowa, but of substantially every
state in the union, to restrict in some man.
aer and some degree the liabilities OF it'
%tutions and statutes of many states, and
have not as yet found a state that has con.
right to incur indebtedness. Under the
policy to which / have referred Iowa hal
md extensive. they have been success
July constructed and proftably operated
snsn SO s,1 far s as l t know it s has meyer be bef or,
state was not liberal in it's grants of cor
1orate power for lawful purposes. The bill
Cor the first time. every limitation and con
Ger upon a class Of railway companies.
privilege which, within the limits of my in
VeSt1Rat1On. has no parallel in modern leg
Station b
8 Affects but One Company.
l beg to refer more specifically to tn
companies to which this extraordinary II
here we're, prior 10 October Is. 1901, tw
railway companies organized under tn
Of railway in this ana another state. The
we're the Burlington, Cedar Rapids 1
sssoi Rock Fffs a / & SOPP aPeiasS R saH ahs com Sh1
pany. The former was a complete singl
track railway, and am not advised tina
not be paid for from the earnings of tn
company. The latter owns and operate
Ill. passing through or into The states .
Illinois, Iowa, Missouri, Nebraska, Kansas
texas and c iaeG1sGGy' T Hha'ap great uer sys9ef
has been constructed to a high point Q
efficiency under the law as It Is, and 1 hav
not been able to ascertain that II has bee
hampered or embarrassed I'm its work b
any provision of the Iowa statute. nor hs
~ bINh Ald " NV AhbN ~ RAORDoN
TO issue additional bonds or incur add
tional Indebtedness. On the contrary,
have been led to believe that the Improve
inents which from time to time It is addin
10 it's property are made from its earning
: am, therefore, of the opinion that thel
- no necessity for the bill under consiC
GRAFTON in order to enable either OF thei
systems to be operated more economical
or more safely. II there were such niece
sity II is manifest that the proper and ma
ural amendment to the statute would be
enlarge the rights of all railway .compani'
organized under the laws OF this state
issue bonds for the Improvement or Il
hetterment of railways, Instead of who'll
removing every limit and safeguard r
apecting the creation of Indebtedness.
view OF these conditions, which are W!
known and are a part OF the history OF q
state, l cannot resist the belief that Il
real application of the proposed amen
ment would not be to enable the two
three railway companies to which II wou
apply TO improve their properties for the
own profit and for the advantage OF Z
people, but that its only substantial ene
would be TO overcome real OF imagtna
difficulties growing out of the purchase