The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1907-07-14
HARTMAN LAWBREAKER
REPORT OF'COMMISSION

through routes Of transportation, in
Guiding branches and feeders II Is In
the interest u the public 70 facilitate
the consolidation Of connecting lines.
The credit Of a railway company is
founded upon the resources and pros
Perity Of the country through which II
runs.
It's surplus funds and credit should be
used for the betterment OF It's lines and
in extensions and branches 70 develop
the country contiguous 20 H. The tes-
timony taken upon this hearing shows
( that about $1,000 square miles OF terri
I tory I'm the state OF OresJn, surrounded
by the lines Of the oregon Short Line
Railroad Company, the oregon Railroad
and Navigation Company. and the
Southern Pacific Company. Is not devel-
oped; while the funds OF those com
panies which could be used for that
purpose are being invested in stocks Ike
/ the New York Central and other lines
! having only a remote relation 20 the
territory IN which the Union Pacific sys-
| TEN Is located
Danger Of Present System.
/ Railroad securities should be safe and
| conservative investments FOR the people.
/ To this end. the risks Of the railroads
/ should be reduced 20 a minimum.
| Everyone knows that railway securities
/ Guctuate more or less, according 20 the
prosperity Of the times, and also b.
/ reason Of the wide speculation in such
! securities. Ii therefore adds an element
| OF hazard to a railroads capital and
: credit 20 have its funds invested IN the
! stocks Of other companies. thereby en-
/ dangering its s0lvency and its ability
! 10 pay reasonable dividends upon its
own capital stock. II is g serious men
ace 10 the financial condition OF the
country 10 have large railway systems
| fail TO meet their obligations or 20 into
the hands Of receivers. and the object
( OF legislation and administration should
I be 10 lessen the risks Of railway invest
ments-
1t is contrary TO public policy. as well
/ as unlawful for railways 70 acquire
/ control Of parallel and competing lines.
{ This policy Is expressed IN the FEDERAL
I laws, and in the constitutions and laws
I Of nearly every State in the Union We
/ have examined the constitutions and
7 laws OF all the States. and find in about
/ forty OF them prohibitions against con
/ sOlidation OF capital stock or franchises
! Of competing railways, or tle purchase
I ana acquisition BY railway OF cOmpe-
] ting lines.
/ Competition between railways. as well
!
/ tablished policy OF the nation And
l while tne acquisition Of a small minority
/ Of the stock OF competing line might
| not decrease the competition. yet the
/ acquisition OF any considerable amount
/ Of stock with representation on the
/ board OF directors OF such railway, IN
| qUestOnably has the effect OF diminish
/ ing competition and lessening 70 that
/ extent It's effectiveness.
/ 50 long as % is the policy OF the Cen
/ eral Government and OF the States 70
I maintain competition between naturally
I competing lines. the ownership OF any
stock by one railway in a competing
/ railway should not be permitted and
such lines OF railway should be pro
hlnlJed from having any common direc-
tors or officers.
Time Ripe for Regulation.
The time has come when some rea-
! sOnable regulation should be imposed
upon the issuance OF securities BY rail-
ways engaged In interstate commerce.
we are aware that iu the construction
OF new lines ofa railway. developing
new territory, II has been necessary in
many instances TO sell railway secur-
tiles AT large discount, and 20 sell bonds
with stock bonuses. and even IN such
cases IL has many times been difficult
70 raise the necessary capital. Men viii
rot invest their money aid take the
risk for small rates OF interest.
But this principle does not apply TO
/ old established railway systems having
/ good credit. Such railways should be
! prevented from initiating their securities
I for merely speculative purposes Rail-
| roads should be encouraged TO extend
| their systems and develop the country.
| Il is Of the utmost Importance, also.
! that railway securities should be safe
I and conservative Investments for the
I public and should yield good and ample
] return for the money invested. Reason
/ able retaliation viii tend 20 make them
I safer and more secure investments, and
/ thereby benefit not only the railway
/ companies but the public