Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1907-07-15

contiguous TO It The testimony taken
shows that about $50, 900 square miles o.
territory In the state OF Dragon. sur
rounded by the lines OF the Oregon
Short Liuo Railroad company, the Ore
gon Railroad & Navigation company
and the southern Pacific company, IL
not developed; while the funds of thoAo
companies which could be used for. that
purpose are being invested IN stocks
like New York Central and ether linez
having only remote relation 20 the
territory IN which the Union Pacific
system is located.
"Rallroad securities should be safo
and conservative Investments FOR ths
people. To This end, the risks Of TIC
railroad should DC reduced 20 a mint
mum. Every one knows that railroad
securities huctuate moro or less accord.
ing to the prosperity OF the times, ana
also by reason of the wide speculation
In those securities. 1t. therefore. adds
an element Of hazard to railroads.
capital and credit 70 have its funds in4
vested In the stocks ~ Other corupanipg,
thereby cndangerlag It's solvenoy and
It's ability To pay regular dividends on
its own capital stock. II ~ serious
menace 60 the FINANCIAL condition Of
the country TO have large railway sys-
TENS fail TO meet their obligations or
60 into tho hands OF receiVNrs md tho
object of Legislation and administration
should be TO lessen the risks OF railway
Investments.
"Second--It IS contrary to public poll
ICY as well as unlawful for railways
TO acquire control of parallel and conn
potipg lines. This policy Is expressed
In the federal laws end In the consti-
tutiOns and laws OF nearly every state
In the Union. We have examined the
constitutions and laws of all the states
and find in about 40 Of them prohibit
tions against consolidation OF capital
stock or franchises Of competing rail-
waya, or the purchase and acquisition
by railway OF competing lines. Com
petition between railways MS we'll as
between other industries, Is the estab-
lished policy Of the nation. And while
the acquisition Of small minority Of
the stock OF y competing line might
not decrease the competition, yet the
acquisition of any considerable amount
Of stock With representation on tlf
board Of directors of such railway I'm
questionably mas the effect OF diminish
ing competition and lessening to that
extent lis effectiveness. SO long as 1t
is the policy Of the general government
and OF tho states to maintain conpe-
tltiou between naturally competitive
lines. the ownership of any stock ny one
railway in Il competing railway should
not be permitted and such lines of
railway should be prohibited from haV-
ing any common directors or officers.
"Third-'rhe time has come when
some reasonable regulation should be
imposed unon the issuance Of securities
by railways engaged In Interstate COM
merce. We TIRE aware that IN the con-
struction Of new lines Of railway, de-
velopine new territory II has been nee
essary In many instances TO sell rail-
way securities at large discount. and 10
sell bonds with stock bonuses. and even
In such cases Il has many times been
difficult TO raise the necessary capital.
Men viii not invest they money and
take the risk for small rates OF inter-
est.
"But this principle does not apply
tu old established railway systems hav-
ing good credit. Such railways should
be prevented from initiating their Sc
curlties for merely speculative purpos-
es Railroads should be encouraged to
extend their systems and develop the
country 1t Is of the utmost imports
ance. also, that railway securities
should be safe and conservative invest
ments for the public, and should Weld
good and ample returns for the macy
invested. Reasonable regulations Will
tend to make them safer aud more Sc
cure Investments. and thereby benafit
not only the railroad companies. bus
the public"