Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1907-01-18

! be prompted where the earnings are
excessive, to reduce the rate Of divi-
| stockholders in order that the liabilities
may apparently keep pace with the con-
stantly increasing earnings. Not infre-
| quently such issue is made for the purpose
| of manipulating the market and to keep or
to gain control of the corporation. Anoth-
| er inducement for such additional issue is
the practice recognized by law of giving
| to existing stockholders the prior right to
subscribe for proportionate share thereof
at par, regardless of market value. In such
| portion of the amount that might have
been realized, and the commerce Of the
country is taxed to pay dividends upon
| the excessive issue.
The recent action Of the two great rail-
way corporations operating in this state
| in authorizing an additional issue Of stock
is significant in this connection Section
| 1926 Of the revised statutes, as amended
| by chapter, 461, laws Of 1901. provides thar
ton organized under the laws Of this state,
may be increased to such an amount as
deemed necessary by the stockholders for
the purchase or construction of any rail
| road which it may be legally authorized TO
| purchase or construct, for additions or i'm
proponents to, it's property, for additional
| operation of its railroad, and for real estate
| that may be needed for railway purposes.
me corporation 50 Increasing its capital
| OF state, whenever such issue Is made,
report of the amount issued and the pur-
pose for which 1T has been or is to be de-
vision or control Of such issue by state
authority, and no restriction as to methods
| Of sale of such stock.
In 1903 the Chicago & North Western
Railway company increased its capital stock
from $75,00O,O00 to 100000 900, and in Oc-
| tober, 1906, filed with the secretary OF
| state an amendment to it's articles Of asso-
citation making further increase Of $780,.
sEeatn The d t6ta eap MWadkee
st. Paul Railway company, in October and
November, 1906, filed amendments to its
articles of incorporation increasing its
| capital stock $175,O0O,OOO, from SIS, 600, 600
| to $25OOO0,O 600. Each Of these companies
is at the present time, and has for many
years, been operating thousands of miles
| of road, fully equipped, considerable Of the
| trackage having been doubled. 1t Is hard
| ly probable that either of these companies,
duplication of its extensive properties. The
necessity for this large increase Of it's
| capitalization by each of these great com
challenge the attention of the Legislature
| Moreover I am advised that the. addi-
| tional stock, when issued by either Of these
right Of existing stockholders to purchase
| the same at par, although it's market value
is largely in excess of that amount. Issue
and sale of additional stock under such
circumstances, places an unjust and un.
| reasonable burden upon the commerce of
the state and country, and proper legisla-
tinuance of such methods of railway man
agement. This is but one form of the evil
poratfons, and demonstrates the Importance
| of placing the whole subject under the
| control of competent state authority.
| / therefore recommend the enactment OF
| a law providing that the issue of stocks
and bonds, or other evidences Of debt to be
secured by lien. or mortgage upon the
| corporation organized under the laws of
| this state, shall be subject to the super
vision. and control of the state railway
commission, and that any additional stocks
or bonds so issued shall not be sold for less
| than the market value when the market
| value exceeds the par value.
| The state board of assessment ascertained
| the value Of the railway properties Of the
state for the purpose of taxation, but such
a guide to the railway commission when
| considering the reasonableness of the rates
| prescribed for the transportation OF passen-
| gers and freight The cost of railroad prop
| critics must be considered as an element i'll
| determining rates as the earnings of the
corporation must provide for the expense
| of maintenance and repairs and reasonable
| returns upon the capital actually invested.
| l therefore recommend that the state rail-
way commission be clothed with adequate
| power to determine the value of the rail
| way properties Of the state and to employ
| such experts as may be required to aid in
| this work.
The governor wants the railway COM
| mission given power to supervise all is
sues of stocks and bonds by railroads
and to see that they are not sold at less
| than the market value. He also wants
| the commission empowered to determine
the value of railroad property.
The governor wants all the laws relat-
ing to public utility corporations revised.
He wants all franchises limited and sug-
gests that all should terminte by Jan
! uary 1, 1880, at the latest. He recon-
mends a state commission to regulate the
price of gas, electricity, telephones,
street car fare and all other charges by
| public corporations.
The governor favors municipal own
ership and advocates laws to enable cit
les or villages to establish public utili-
| ties or by eminent domain to acquire
existing property by payment of a fair
price.
Necessity for State Control.
The governor says:
question Of the utmost Importance to
large classes Of our people, commanding i'm
mediate consideration and judicious action
! by the Legislature, relates to the control
and regulation by the state of local public
sereG Nv pR Of The sFyee
contribute to the life and comfort Of the
inhabitants Of the larger cities of the state,
and in many instances to those residing in
population makes necessary artificial
Lighting an adequate water supply
and if these cannot be furnished by the
municipality the services Of public utility
corporations become Indispensable. 1t has
| been common practice in this as well as in
other states for the city to grant the
privilege of furnishing these facilities to
corporations, and franchises have been
practical application and monopolistic in
their character which contain no adequate
safeguards for the protection Of the pub
| lie. The result has been that these cor
porat1ons with the absence of governmental
restraint have grown in wealth and power
and have become the masters instead Of
of service has not kept pace with the needs
Of the PUBLIC, or with the rapid improve
ment in methods and appliances, while the
requires but a superficial knowledge Of the
subject to reveal the fact that there is
| no uniform relationship between the rates
| charged and the cost and character OF the
| services rendered.
The eagerness Of the municipalities for
| local improvements and the apparent In