The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-02-07
RAILROAD NEWS.
Prohibition of Ownership Oh
Foreign Stocks Is Advised.
Journal of Commerce Editorial
Knocks on Hartman Idea.
CALLS IL DANGEROUS.
Would Follow Suggestion in
Commerce Commission Report.
Other Items of Interest in
Railway Circles.
CALLS III DANGEROUS.

'-The Interstate commerce commission
IA its annual report, the first issued az
ter a full years experience under the
amended law, devotes considerable
space to the important question of the
ownership by one railroad corporation
of the securities of another" says the
New York Journal of Commerce in
recent editorial 1.-THE function of
railroad corporation it says, should
be confined to the furnishing of trans
portation." and this implies that its
capital resources should be devoted to
the development, maintenance and con-
duct of its own business and not IN
vested in some other. This is souno
doctrine that has been extensively V1o-
lated by some large railroad corpora
tons, but a more complex question Is
that of the extent to which a railroad
corporation should be permitted to in
vest in the stock of others with view
to exercising control or influence in
their operation The commission says
that it is in the interest of the public
to facilitate the consolidation OF con-
Meeting lines, but railroads should not
be permitted to invest generally in the
stocks, bonds and securities OF other
railway and steamship companies, eX-
cept connecting lines for the purpose
of forming through routes of transpor-
tation, including branches and feed
ers." Reference is made to the neglect
of certain subsidiary lines of the Union
Pacific system to develop transporta-
ton facilities in a large area in Ore
gon, where it has a practical monopoly,
while surplus funds are invested in
eastern companies having no direct
connection with the system. Another
reason given against these promiscuous
investments by corporations is that
railroad securities should be safe and
conservative investments for the peo-
ple'' and should not be subject to the
risk of f1uctuation in various stocks
with which they are entangled.
Where the stock ownership is in
parallel and competing lines the effect
is to restrain, if not suppress, compe-
tition, and the commission says that
acquiring control in such cases is con-
trary to public policy as we'll as I'M
lawful 1t is prohibited by the laws
of most of the states, and the commits
sion concludes that so long as it is the
policy of the general government and
of the states to maintain competition
between naturally competing lines, the
ownership of any stock by one rail-
way in competing railway should not
be permitted and such lines of railway
should be prohibited from having any
common directors or officers The pro-
hfbition, so far as stock ownership by
the corporation itself is concerned, may
we'll extend to all lines not connected
with its own system of transportation
whether directly competing or not. The
same capitalists cannot be prevented
from investing in the securities of as
many corporations as they please and
exercising such influence in their con-
duct as may go with their stock own
ership, but there will be limit to
their capacity for control. But when
one corporation acquires ownership in
the stock of another for the purpose
of exercising influence in its manage
T0ent 1T concentrates control in fewer
and fewer hands and tends to monopo-
". There is no difference except one
of degree between the control exer-
cised by one railroad corporation hold