The Bridgeport evening farmer., 1909-06-02


 len in opposition to the passage of public utilities bill. which was pre- sented to the committee at the hear ing in Hartford, yesterday. is as fol lows:
 To the Committee on the proposed Sill for Public Utilities Commission. Gentlemen:
 Business engagements prevent my appearance before you at your hearing on June 1st. I beg leave, therefore, to say in writing a few words about the subject assigned by you for that hearing, viz: the control by a commission of the fin ances of public service corporations.
 The New York, New Haven and Hartford Railroad Company is al- ready subject to many restrictive laws and to the Jurisdiction of railroad commission appointed in precisely the same way as the pro- posed commission would be. The chief power over this company conferred by the proposed bill is a control by a political board over its management of it's finances. It seems not only to me, but to all those who are familiar with the practical conditions to which we are subject, that such legislation will be seriously injurious.
 l do not assume that there will be any ill-will toward this company on the part of any political board that might be created; for it is difficult to believe that any men would consciously wish to hamper the financial arrangements of the largest business corporation in New England, whose prosperity is evil dently essential to the welfare of the communities which it serves. But assuming the most perfect good will toward this company on the part of every member of the pro- posed commission, the working of the proposed machinery of financial control will inevitably act injur- 1ously upon our finances.
 In the first place, the mere fact that all our plans would have to be prematurely revealed to the world in a, public hearing, at which we would be obliged to state pre- c1Sely the purposes for which we proposed to raise new capital, might seriously hamper or even altogether prevent the execution of these. plans. Most business men. even if their own business is smaller and less complicated than ours can see with a little reflection how objec- tionahle such a necessity must be. If before they could negotiate de- finitely for the securing of addi- tfonal capital. in order to increase their own facilities or develop their ONh DdolhiCoS, t1Cy Iidu lO ISNSdl lO the owners of real estate they might want to buy, and to their competitors in business, all their plans and purposes, they might find the consequences seriously detri- mental. With us the results of a law compelling a premature revela- tion at a public hearing of all our far-reaching purposes would be even more radically injurious.
 In the second place, this bill provides that the proposed political board shall dictate to the directors of the New York, New Haven and Hartford Railroad Company as to the prices which they must receive for it's securities The communities served by this company are grow ing steadily in population and in the magnitude of their commerce. It is inevitable that this company will in the future. as in the past, have to add largely to it's facilities, in order to handle economically and expeditiously the increasing traffic on it's lines. For this purpose it will require new capital in large amounts. But twenty or thirty million dollars of new capital can not be obtained in the same way or on the same terms that a few thousands can. The financial man. agers of this company need a free hand in the preparation of their financial plans. and in the delicate negotiations with bankers, whose intermediation is often required. It is impossible to know exactly what terms can be made with bankers until the~very end of negotiations. When those negotiations are satis- factorily concluded, it is important to close a contract, since financial conditions may change over night. But under the proposed law, there can be no certain basis for finan- cial negotiations until after a pub lie hearing and a decision by the proposed political board, which de- cision may be delayed for months. Moreover, the board may fix the price of securities too high in which case the financial plan will fail. with much resulting mischief; or the board may fix the price too low in which case the bankers will not offer so much as they would have done. if negotiations had been unhampered. All this may not seem important to the inexperienced, but in reality it is of the most serious importance to this company. and to all who are interested directly or indirectly in the development of it's business.
 In the third place. this bill pro- vides an artificial limitation on the borrowing power of this corporation which would operate unfairly and mischievously.
 It would SC m that it ought to be the common desire in Connec-' ticut to enable this company to borrow at home and abroad, upon the best terms possible, all the money which it's directors think can be safely borrowed and profit ably used in the development of it's business. But this bill provides that this company cannot issue bonds in excess of the amount of it's nominal capital stock. In nor mai times the market value of this company's stock has been about two hundred dollars a share. A careful appraisal of it's property shows that the value of this prop erty, over and above all liabilities, is sufficient to justify such value for it's stock. As applied to this company. the provision in question means in substance that it would be forbidden to issue bonds for more than 'one-third of the actual value of it's property. A simple example makes this plain: If the company's nominal capital is as- stunned to be s100. 900. 900 %, it's bonds could not exceed s100, GOO. .000.O0. The property represented by it's stock upon the present assumption be- ing s200 .OOO. .oO0.O0. and that repre-
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