The sun., 1908-12-10
YALUATION OF cORpORATIONs.
siIl Different in Erect From One Pro-
posed BY La FOIlette.

WARRINGTON. Dec. e.--Legislation pro-
posed by Senator Dolliver Of Iowa In
bill offered In the Senate to-day amounts
to q fixed valuation of railroads and other
interstate corporations. II In different In
effect from old and somewhat similar
proposals. Of Senator La Toilette In that
1t does not propose any disturbance OF
existing order. The principle Is about
the same. but where Senator La Toilette
would apply II backward Senator Dolliver
would apply It from now on. and his bill
Is more liberal In that II does not exactly
advance the idea Of physical valuation
but rather restraints corporations from
extending their stock issues except
within defined limits. and then only on
the express approval OF the Interstate
Commerce Commission. The bill deals
almost entirely with the subject OF stock
issues, forbidding the Issue Of any stock
not fully paid for, but 1t also goes into
| the question OF mergers and prohibits
the consolidation OF rival or parallel lines
or any form Of control by one Of the other.
No corporation subject to the provisions
Of competitor.
Telegraph and telephone companies and
all interstate carriers. as well az railroads,
are included In the terms Of the bill, which
says in part:
No corporation shall issue any share OF
stock unless at least its par value has been
paid into the treasury or unless issued In
exchange for property or securities at not
to exceed their true and actual value.
. No commission shell bc paid any person
for subscription TO shares or for procuring
subscriptions unless expressly authorized
by the Interstate Commerce Commission
l. a -. III t..N-
Any company In business more than two
years may sell additional shares at dis
count. but notice Of such sale must be made
to the Interstate Commerce Commission I,
and then shares may be issued only on the
express approval of the Interstate Com
merce Commission as necessary in the pub
lie interest.
One restriction on stock or bond issues
Is that no stock issue or evidence OF funded
indebtedness shall be legal except for the
acquisition or construction of property
to be used in the operation Of the business
of the corporation. This is the language
OF the bill governing consolidation or con-
troll Of rival lines:
No corporation shall acquire of hold any
securities Of any other corporation which
operates a parallel or competing line. nor
shall any such corporation hereafter acquire
ton whose lines are not directly connected
with the lines OF the purchasing corpora
tion. unless, although not connecting the
lines OF the corporation whose securities
are acquired. are so related to the lines Of
the purchasing corporation as to permit
operation Of both lines as a substantial
unit and to the improvement of the whole
service.
What is probably the crJS of it all is
found in Section Q, which is short. II
reads thus:
No corporation subject to the provisions
Of this act shall issue its securities in ex-
change for the property or securities Of any
other such corporation. or shall purchase
the property or securities OF any other
such corporation at a rate or price in excess
Of the true and reasonable value
Anv securities issued contrary to the
provisions Of the act are declared illegal.