Los Angeles herald., 1907-01-24
COURT RESTRAINS
GREAT NORTHERN
CANNOT ADD A S60,000,000
STOCK ISSUE
Judge Finds No Authority In Charter
to Authorize Such Bondage.
General Railroad Hap
penings
Bv Associated Press.

BY Associated Press.
ST. PAUL, Jan. 2S-In the Ramsey
county district court today Judge Os-
car Halam signed an order enjoining
the officials of the Great Northern
Railway company from making the
proposed increase of S6O.0 900 900 worth of
additional stock of that company or
issuing the same or part thereof dur
ing the pending litigation without first
making an application in writing
therefor to the Minnesota railroad and
warehouse commission and securing its
approval thereof, as provided by Sec
tion 2S72 of the revised laws of 1905.
This is a victory thus far for the
state in the action brought last month
by Attorney General Young to compel
the railroad to recognize the state
railroad and warehouse commission be-
fore Issuing the stock, as the laws pro-
vide that before q railroad can issue
an increase of it's capital stock it
must make application to the state
railroad and warehouse commission
and make a showing of the necessity
for such an issue
The Great Northern railroad claimed
that under it's original charter it could
issue stock at will and that the law
granting this power to the railroad
and warehouse commission was uncon-
stitutional
The present capital stock Of the Great
Northern is $150,000,000
Judge Hallam in his memorandum
accompanying the injunction reviews
the Legislative acts under which the
Great Northern claims the right to in
crease it's capital stock.
Finds No Authority
The Great Northern was originally
Incorporated as the Minneapolis & st.
Cloud Raidroad company under a spe-
cial charter granted by the territorial
assembly in 1856. This charter was
amended by a legislative act of 1865.
Judge Hallam finds in these acts no
authority to issue stock without limit,
as now claimed by the company
Judge Hallam continues:
"The issue of stock by railroad cor
porations is a matter of public con-
Germ, and the state has a right to in
sist that when such corporation in
creases its stock there shall be value
behind the stock and it has a right to
establish safeguards to that end"
Citing a decision in the case involv-
ing the appointment of a board Of
commissioners for electrical subways
in New York, Judge Hallam holds that
the courts have gone much farther
than is necessary here to sustain the
validity or this act as regulation of
a charter right.
The court quotes numerous decisions
to support his contention and refers
to the case of Pearsall VS.. the Great
Northern, in which the supreme court
decided that the right to consolidate
with other railroad companies, even
though they owned parallel or COM
peting lines, was subject to executive
regulation and might be taken away.
On the contention that the legislature
had not the power to enact legislative
powers to the state railroad and ware
house commission because such power
might be abused in favor of or against
any particular railroad. Judge Hallam
says:
at seems to me clear that the COM
mission must, in arriving at it's de-
termination be guided only by what
is a proper and lawful occasion for the
increase of railroad corporation stock
Any arbitrary veto power upon such
increase would be against the letter
and spirit of the act"