New-York tribune., 1908-01-07

relation to the territory in which Union Pacific
system is located.
tive investments for the people TO n end IN, ,he
risks of the railroad should be rednee1 70 nhi
fuctuate more less, according to the PFC prospery @
laion in such securities 1t therefore adds an eie
ment of hazard to railroads capital ana cIeo,o L. "
have it's funds invested in the stocks OF other eo1
panies, thereby endangering its solvency ana LIS I.s
ability to pay reasonable dividends upon t the m nan
capital stock. 1t is serious menace TO-, 10 ..T .alsa,
ciaI condition of the country to have large "a ;t,
the hands of receivers and the object OF leSsiatl1
and administration should be to lessen the rishS
It is contrary to public policy well as unlawf'
for railways to acquire contToa %, in the fed
eral laws and in the constitutions and laws OF o,
nearly every state in the Union. We have examiner
the constitutions and laws of all the states: ana ana
find in about forty Of them proniDlIGfns rofe 81 CON-
peng raWays S5 dr the purcase
petion 49f by 6etween Tetlw'y railways well
tween other industries is the estanllsne1 poaieix
minority of OF competing line might nj
decrease the competition yet the az
tion on the of directors of such railway uI1
ton and essening to that extent its effectiveness
So long it is the policy of the general be-
tween naturally competing lines. the ownership OF
any stock 1 by % one TaTay 1 IN sucb pes Of iWs
should be prohibited from having any common ui-
The time has come when some reasonable regula-
tion should be imposed upon the issuance OF seeus
We are aware that in the construction of new
lines OF railway developng ne~ fo sell railway
securities at large discount, and TO sell oonds with
times BEEN dicuIt to raise the necessary capital.
Men will not invest their money and take the rish
But this principle does not apply to old fashioned
ways should be prevented from initiating Their Sc Sc
curties for merely speculative purposes RallroadS
develop the country ~ i Is 0I tne bnnId he safe
and ry-aff iDy-ac ooufS
should yield good and ample return for the money
them safer and more secure investments and there
by benefit not only the railway companies but the
public
VALUATION OF RAILWAY PROPERTY
Reference has been made in previous reports to
properties. The considerations submitted In favor
fms II NAV however be proper to cali attention
the fact that the introduction into operating ex-
penses of set of depreciation accounts prlnss
prominently into view added necessity for an
inventory of railway property The caleL P9rpGSe @ }
against the depletion Of his property by an
protect the public against the maintenance OF
unduly high rates by charging improvements 10
and sfa adrninisTation compiete and accurate in
which they apply and TINS Information f1 can only
classes of railway property.
Yet another reason may be submitted Before |
the close of the present fiscal year the commission
will be in position to prescribe standard form FORM
balance
is disclose the financial standing of corporation
and this it does by placing in paTallei columns d
case of railway companies the commission is un-
able to test the accuracy of the assets reported porte
propertv which the assets represent. If Congress
designed by the provision which it made for a
prescribed system of accounts. that the commission
should do what lies in its p9wer to ggaranIee 6 ahe
ing inventory appraisal of railway property can
From Whatever point of view this question Of val
cation. of reasonable schedule of rates. of effect
i've administration of the desperation aecGunIS ban
one is forced to conclude that an authoritative
step in the development of governmental supervi-
sion over railway administration .-,
the significance of the supervisory work which. |
upon the authority conferred by the tweI1h seeIo @
assumed such large proportions; and believlnS as
valuation of railway property is essen
tfal the successful development of this work |
for the enactment of law under Wn!cn |
such valuation can be made
HOLDING COMPANIES.
The compilation of reports has been greatly en-
barrassed by the fact that certain holding COM !
mission require the Information sought.
Two illustrations, showing the character and ef- |
The Rock Island company was organized appar |
ro over Ie one opeahg properties It's interest is
fined to the Rock Island system Of railroads. 1t |
the facts no equities in any other industries in
any other railroad systems than those generally /
regarded part of the Rock Island railroad sys- :
The Rock Island company chartered in New |
Jersey in 1902 holding company IL had out ,
standing: outside of the treasury, on June go 1907;
$40 O47 800 of preferred stock and s89 602 4o2 of
common stock, total of s13s,6i9,792 1t has no
The Chicago. Rock Island & Pacific Railroad |
Company. chartered in Iowa in 1902. is in fact a !
holding company intermediary between the oper-
atins companies and the Rock Island company Its !
'ntire outstanding stock amounting to sl42oGo 600
tHr 9 t ion ecrd in xchang for it's oWn
stock. The Chicago. Rock Island & Pacific Rail- |
stock in combination with two issues of collateral !
rust bonds has purchased more than SO per cent
Railway Company, and nearly so per cent (Pract-
1ouis & San Francisco Railroad Company stock. !
he stocks of these two latter corporations being
ienosited as security the cola tera trust bonds
1t should be noted further that the Chicago, Rock
island & Pacific Railway Company owned June
Alton Railway which amounts to virtual control:
hat the St Louis & San Francisco Railroad Com
pany owned S212 per cent of the stock excluding
treasury holdings) of the Chicago & Eastern Illi- |
1ois Raroad C0mpany SO pa ana that tts e fI bs
Evansville & Terre Haute Railroad Company;
Holders the preferred stock of the Rock Island
company have the right. to the exclusion Of hold
ne nIu t ciaSS. t St' Of t tIrd Of th nTefapreS
Furthermore. the amount of pre- /
firatiys Vote of tbe boIders Of fwothirds Of The
entire preferred and two-thirds Of the entire com
mon stock. 1t therefore appears that majority |
0any say. $4,000 600 of total of s9OoooOa of
preferred stock of that corporation. dominates the
road lines comprised the Rock Island system,
Another striking instance of consolidated control !
ii the Atlantic Coast Line Company. of Connect !
5ain ndeF on m owneship series of P o9tbern
roads along the Atlantic Coast. This corporation.
b. 600 Of stock and $3GoNoo Of certificates Of
indebtedness owned more 9 than % per cent of the !