The morning journal-courier., 1908-01-28
ACKNOWLEDGEMENTS Right of Companies to Control Connecting Lines Under
 Discussion.
WARM CONTROVERSY
The Real Significance of the Fish Hartman Misunderstood
 ing.

ing.
 New York, Jan. 27,-One of the in cidents which is disturbing the stock market and which is causing great anxiety to bankers and investors IS the outcome of the Fish Hartman contro- yersy over the control of the lliinols Central. The injunction suit brought by Stuyvesant Fish restraining the Union Pacific and the Railroad Securities Go, from voting their holdings of Illinois Central stock is to be adjudicated in the near future and on its outcome Ge- bends considerably more than Illinois Central control. It is generally feared that should the contentious of MT Fish be sustained serious depreciation in the value of securities of Illinois corporations would follow to say noth- ing of the grave consequences to rail- road companies, holding companies, trust companies, etc. that hold large or small blocks of shares in Illinois companies,
 The suit brought by the Fish inter- ests proceeds on the theory that under the law of the State of Illinois t is against public policy for any foreign corporation to own stock in an llllnols corporation and to control such cor porations by voting the stock owned. The question whether such law Is 'od law or bad law does not concern the investing public. but if the effects of such law should be to depreciate the value of Illinois securities the world of investors would be seriously affect ed by declines in the values of their securities.
 The right of railroads to control connecting lines is the foundation on which rests the organization of our small and large railroad systems. Such control is largely affected by the own ership of a majority of the stock of the connecting line and there IS hard ly great railroad system entering Chicago which does not depend on some small stock controlled line for it's entry into the western metropolis Should this accepted system of control be upset the greatest confusion would prevail in the operating as we'll as in the financial departments of the great railroad systems. Companies that have exercised the control over sub sidiary lines for many years by voting the whole or a majority of the stock of these subsidiary companies might suddenly find themselves deprived of that control,
 Few people realize the enornrity of the interests that would be affected The total capitalization of steam rai;- roads organized under the laws of H. linos is over $750,000,0o0 and most of this stock is owned by railroad com panies outside the State. According to the report of the Illinois Railroad and Warehouse Commission these railroads in 1906 operated 11,S93.S7 miles of main line and branches and S,o50 06 miles of second, third and fourth main track industrial track, yard tracks and switches These railroads hauled 14s,- 127,773 tons of freight over these tracks and earned therefor s101 065.- 381. They carried within the State of Illinois 54,757,396 passengers and col lected therefor $29,619,969 Their oth- CT earnings, including mail and ex- press, were $34,242,2S6 They spent $1S.932,114 for maintenance of way and structures, 21,312.371 for main tenance of equipment, and paid to 119,597 employees the huge sum of $7S,S02,774 in wages. The fixed charges on the bonds of these com panies amounted to S39,2t3,27S
 When it is further remembered that the establishment of an important doc Urine of law in one State generally leads to it's adoption in other States the gravity of the situation can be more fully appreciated. for not sin States would escape.
 Aside from the consideration of such possible complications the influence on the market value of securities of rail road companies would be highly detri- mental It is generally accepted among financial authorities that the right to vote on the stock of a solvent railroad company is worth s15 a share. If that right is taken away the resultant de- preciation in value would therefore be SIS share.
 As matter of fact the loss in values would be much greater, for the value or price of a stock depends not only on the property it represents, but also on the demand which does or does not exist. The demand for 8 security has probably more to do with it's val
 
 has only just been completely and ronclusively proved by the fearful drop in market values which occurred last year. Then there was absolutely no demand for stocks It was almos, Impossible to sell them at any price simply because no one wanted to bly them That the demand for securitie. of Illinois corporations would fall of enormously should this new doctrine be sustained by the courts is certain It is well known that railroad com. panes, investment companies. etc. are among the best customers for railroad shares. Should those holders of stock. be deprived of the incentive to hold stocks-namely the right to exercise he privilege of ownership. which i! the power to vote-there would prob ibly result a flood of sales of sucf stocks which would add to the floatins mpply of securities to such an exten ts to force lower prices not only fol the shares sold but for all securities
 Still more important is the effec which the establishment of such rul, sf law would have on future enter prises. especially in the State of Hi nois. Little capital could be raised fol