The Birmingham age-herald., 1907-07-14
ted to continue, 1t must mean suppression of competition
Recommendations.


 1. The function of a railroad cornora- ton should be confined to the furnishing of transportation. Railroads should not be permitted to invest generally iu the stocks, bonds and securities of other rail way and steamship companies, except connecting lines, for the purpose of form- ing through routes of transportation, in- eludinS branches and feeders, It Is In the interest of the public to facilitate con- solidation of connecting lines, The credit or railway company Is founded upon tho resources and prosperity of the country through which 1t runs. It's surplus funds and credit should be used for the bet- torment of It's lines and in extensions and <branehes to develop the country contigu- eus to it. The testimony taken upon this hearing shows that about 5000O square miles of territory in the state of Oregon, surroupded by the lines of the Oregon Short Line Railroad company, the Oregon Railroad and Navigation company and the Southern Pacific company is not developed, while the funds of both com panies which could be used for that pur- pose are being invested in stocks like the New York Central and other lines having only remote relation to the territory in which the Union Pacific is located. Railroad securities should be safe and conservative investment for the people. To this end the risks of the raflroa Is should be reduced to q minimum. Every one knows that railway securities fiuctu- ate more or less It therefore adds an element of hazard to a railroads capital and credit to have its funds invested ill the stocks of other companies thereby endangering its solvency and it's ability to pay reasonable dividends upon its own capital stock 1t Is a serious menace to the financial cOudit fOn of the n tr.x In have large railway systems fail to meet their obligations go into the hands of receivers.
 ?. It is contrary to public policy as well as unlawful for railways to acquire con- trol of parallel and competing lines. Thls policy is expressed in the federal laws and in the constitutions and laws of nearly every state in the union. Competition be- tween railways, as well as between other industries, is the established policy of the nation. So hong as 1t is the policy of tho general government and of tine state to maintain competition between naturally competing lines the ownership of any stock by any one railroad in competing railway, should not be permitted, and such lines of railway should be prohibited from having any common directors or officers.
 The time has come when some reason aDle TeBuldtlOH SHOuiO De imposed upon the issuance of securities by railroads en- gagged in interstate commerce. We are aware that in the construction of new lines of railways. developing new terri tory, it has been necessary in many in- stances to sell railway securities at large discount, and to sell bonds with stock bonuses and even in such cases it has many times been difficult to raise the nec- essary capital. Men will not invest their money and take the risk for small rates of interest
 But this principle does not apply to old esta blished railway systems having good credit Such railways should be pre- vented infating their securities for merely speculative purposes. Railroads should be encouraged to extend their systems and develop countries. Reasonable regulation will make them safer and more secure in- vestments and thereby benefit, not only the railway companies, but the public