The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-02-18
NEW RAILWAY BILL
IS RE|NTR0DUCED
Gives the Interstate Commerce
commission Great Powers
Over Securities.
IMPRISONMENT AND $4,000
FINE FOR WATERING STOCKS
Proposed Law viii Apply to
Electric Lines the Same as
to Steam Roads.

WASHINGTON. Feb l1.-Thc ad
mlnistration railroad bill, amending Tho
interstate commerce act, originally in
troduced in the house by Representative
Townsend of Michigan. was reintro
duced by him TODAY with a number OF
important amendments drawn by Attor
ney General Wickcrsham. These change
the bill in the matter of the creation of
the court of commerce. in the regula
lion of stocks and bonds, and in the in
cluslon of electric railroads
Inc amendment relating 10 the com
mercc court limits its power TO that of /:
federal circuit court This amendment
was drafted 10 meet the objection made
10 the original provision that the court
would have more extensive jurisdiction
lhan the existing circuit courts of the
United States.
The stock and bond provision i.
amended so as ~ permit the reorgan
ration OF railroads and the merger of
railroads not directly prohibited
The act would establish the genera
principle that no stock shall be issued
by railroads except at par. and no bond:
except at their reasonable market OIL
calling value. ascertaned by the inter
state commerce commission. Where eth
er stock or bonds are paid for in prop
crty, its fair value must be ascertaincd
by the commission.
Stocks and Bonds.
One section deals specifically with the
issue of stock and bonds on the reor
gaulzatiou of existing companies. and
also authorizes the issue OF stocks to an
amount not exceeding The aggregate OF
the stock OF the company rcorgauized
and bonds 10 an amount not exceeding
the outstanding bonds and other obi ga
tlons. including new money paid in, pro
vlded the aggregate interest charges 10
be paid by the recognized company do
not exceed the aggregate existing inter
est charges.
In the case Of The merger of two or
more railroads, the stock and bonds OF
the consolidated company are not 10 eX-
cced the aggregate amount of stocks and
bonds Of the constituent companies, nor
be in excess of the fair estimated value
of the properties of the consolidated
company asccrtaiucd by the commission
y railroad company is let free to
acquire stock and bonds Of another non
competing railroad. provided the aggre-
gate amount of stock and bonds issued
for such acquisition shall not exceed the
fair value of the property as ascer.
tanned by the commission. or the ag9rc.
gate par value Of the stock and bonds
acquired without increase in the aggre-
gate interest payable on such bonds.
Fine and Imprisonment.
These provisions. 10 is believed. will
prevent the bill from interfering with
any legitimate financing, while effect
ually preventing the issue Of stock and
bonds without proper safeguards. The
bill further provides that any officer of
a railroad corporation who violates the
law may be punished by a fine of $4,000
or three years imprisonment or both.
The amended bill further provides
that where notes or other obligations
made in conformity with the act arc Sc.
cured in the pledge of bonds, sale
of the pledged bonds TO enforce the
loan must be had at public auction. and
notes may be made convertible into
pledged bonds on the basis of the rea.
sonable market or selling value of the
bonds as approved by the commission.
The amendments are so framed that the
new act shall not operate to impair any
contract, mortgage OF other instrument
made prior to the passage Of The act
Electric railroads are granted Inc con
cession they desired at the recent hear
iDgs, when ii was complained that the
bill was discrimination in favor of
steam lines 10 the financial detriment OF
electric roads.