The Topeka state journal., 1909-01-19

, but also over all the other corporations
that are of a quasi public character
4 that are known as public service cor
lporations. These bills comprise what
is deemed to be the best in the laws
of Wisconsin and New York on this i'm
portant subject and where this plan OF
state supervision over corporations has
been tried with excellent results, not
only to the people but to the corpora
tions themselves.
Among the many. important powers
that will be vested in the commission,
| if the plan is adopted, there is none
more SO than the one which will give
| it supervision over the proposed issue
of stocks and bonds by corporations,
either original issues or increases in
existing issues. Neither is there pro-
vision in it which will likely come in
/ for more opposition from the railroads
and other corporations than this one.
This is a matter that corporations are
anxious not to have q state or anyone
else medd1e with. But it is a question
of vital Importance not only to the cor
porations but to the people who permit
them to do business. Many corporate
abuses can be traced directly to over
Capitalization and over-bonding of pro-
perties. A corporation which has to
pay interest on bonds and earn d1Vl-
dends on stock that are far in excess
of a reasonable capitalization and bond
ed Indebtedness, must of necessity
charge more for it's wares or service
than it would have to if it was not ex-
cessively capitalized or bonded. And so
it will be seen that the state should
have the power and the means of regu-
lating stock and bond issues just as it
has the power to regulate rates.
The argument is made that in giving
a state commission supervision of this
sort the chances are great that the
commissioners would err in being too
particular in this regard and that their
failure to permit corporations to in
crease their capital stock and bonded
Indebtedness as they desire would i'm
pede the undertaking of many extern
sions in business that corporations
would like to engage in and would dis
courage the investment of capital and
the promotion of enterprise.
Matters do not seem to have worked
out this way in New York. In its Sec
ond annual report. recently published.
the New York public service board says
that it will endeavor to rule in this re-
gard so as to encourage the honest in
vestment of capital in all possible ways
and that it will use all efforts to pro-
mote enterprise. It thinks that the in
terest of the public demands these re-
suits. 1t believes that such results are
not inconsistent with the protection of
the public against practices which have
earned condemnation. The commission
holds that it has power to authorize
the issuance of stock and bonds and
the incurring of other indebtedness only
for the purpose enumerated in the stat
utes, but that as to these purposes it
has wide discretion. 1t does not be-
lieve in interfering with the discretion
of directors of corporations in this
matter except where this discretion is
deemed to be fairly unwise and pre-
judicial to public interests.
These particular provisions of Sena-
tor HamiIton's bills follow the provfs-
ions of the New York public utilities
statute and it is no more than reason
able to suppose that a Kansas COM
mission would interpret them in the
same equitable way that they are con-
by the New York commission
erS