The sun., 1908-04-05
TO CHECK STOCK WATERING
CONGRESS HAS 4 BILL TO LIMIT
NEW RAILROAD ISSUES.
Pathsred by ESCh of WIsSonS'R-PernilA
PuttlnE Out Of New stock 10 Acquire
CoanectInE Llnea-An interstate rail-
reads RSQulreA to nspOFt Nov Issues

WASHINGTON. April "a bill designed
10 put into legal form rules and regula-
tons concerning the acquisition Of rail-
road property and the Issuance OF railroad
securities that viii prevent in the future
such manipulation a. was disclosed by
tho investigation of the Interstate Com
lneroe Commission into the operations
Of the Hartman lines, was introduced IN
the House to-day by Representative
Esch Of Wisconsin
The bill Is aimed at The Overcapitahza-
tion Of railroads, providing a. 1t does Tor
strict government supervision over the
Issuance Of railroad securities. IL aiso
permits railroads to acquire connecting
lines. The measure 10 proposed as an
amendment TO the railroad rate act, OF
which Mr.. Esch. as a member Of the House
Committee on Interstate and foreiEh
Commerce, was one Of tho franerS
In part at least the Esoh bill is drafted
alone lines mapped out in President Rooae-
vet's recent messages u Congress 10
avoid in any way conflicting win S'aIe
statutes on the subject. Mr., Esoh had a
series of conferences with Martin c. Decker
member Of the Second District Puolo
Service Commission Of New YORK az "a
resul, OF which a section was added to the
| bill obviating any possibility oi CLASH
with State laws
The bill provides that no ihtersla'e rSh-
road shall. after such road has been con-
structed and IN operation for one year
issue any additional stocks bonds notes
or other evidence OF indebtedness except
when necessary TO tire acqui itlon OF prop
/ erty. the extension or Improvement oi
is lines and facilities and improvement
or maintenance Of its service, &c.
| IL is made unlawful for any common car
rier 10 issue either scrip dividend or stock
| dividend or to pay any dividend except IN
cash. Such corporation may purchase
the stock or bonds Of connecting hne ol
/ railroad when Rioh line and the line oi
such corporation would constitute
through route Of transpOrtatIop' ana "
may issue its stock or bonds to provlos
funds for that purpose.
Except as indicated It shall not be laWIuI
for any common carrier to acquire by Pur'
chase, exchange Of securities or otherwise,
the stock. bonds or other form Of capital OF
any other railroad corporation. nor shaiL
any other corporation or association OF
persons acquire and hold any portion ol
the stock, bonds or other form OF capital ol
any two or more railroads,
The bill requires interstate railroads tC
Gle full specific reports TO the Interstate
Commerce Commission Of each and every
Issue Of stock, bonds. notes or other evl'
Cenoes Of indebtedness including oil ISSUE
Of notes for a period not exceeding twelve
months. and all acquisition OF railroad
property and Of acquired control or righ'
10 operate railroad property by contract
loass. agreement or otherwise. Authority
IA Riyen the commission 10 make investiRa
tions concerning the capitalization Of AM
common carrier, the acquisition OF railroad
property by any such corporation or th'
right Of any such corporation to control ol
operate railroad property,
1t IL specifically provided that nothing II
the Bill Is 10 be construed 10 deprive an!
State OF any existing power or authority
to regulate the issuance OF stocks bond'
notes or other form Of idebtedness by rail
road corporations or other corporations o
which such States may have Jurisdiction
or 20 regulate or prohibit the acquisition
control or operation Of railroad property
bv anv such corporations,