New-York tribune., 1910-05-01
RAILROADS CAPITAL
NOT TO Be REGULATED
Three Sections of Interstate,
Commerce Bill Will Be
Stricken Out.
MERGER PROVISION MAY GO
Friends and Critics of Measure.
Dissatisfied and Unable to
Reach Agreement On New
Amendments.
IFrom The Tribune Bureau.


Washington. April 30.-It has been
decided to eliminate from the Senate
bill to amend the interstate commerce
act the three sections which provide q
plan for the regulation of the capitali
zGtion of railroad corporations. Neither
the friends nor the critics Of the bill
are satisfied with the sections as they
have been reported. 1t has been found
impossible to draft satisfactory amend
ments, and on this account an under
standing has been reached to strike out
Sections Is, IA and Is.
1t is understood that a final decision
has not been reached regarding Section
II. This section authorizes railroad
mergers under certain conditions. 1t has
been savagely attacked by critics Of the
bill. and has been warmly defended by
Senators Root. Elkins and others. It
is possible. however. that the plan out
lined in this section may not be pressed,
although a majority OF Senators on the
Republican side feel that Section II
would have an important influence in
solving the transportation problem.
"CBS 10 FTcNSGl
Sections 13 and Il of the bill embody
plan aimed to prevent the overissue
OF stocks and bonds by interstate car
riers. Section 13 declares that no inter
state railroad corporation shall hereafter
issue for any purpose connected with or
relating to any part Of its business gov
erned by the interstate commerce law
any stock. except on the payment of the
par value thereof; or any bond Except
notes maturing not more than two years
from the date they are issued) without
payment of not less than the par value
thereof. or If sold al less than par. then
at not less than its reasona bic market
or selling value. to be ascertained by
the commission: and that no property
or other thing than money shall be taken
In payment to the corporation for stock
or bonds except at its fair value, which
shall be ascertained and certified to by
the commission 1t is, however, pro-
Vided that nothing in the act shall be
construed to prevent carrier from
issuing its bonds or other obligations
to refund those now issued and out
up or refund the same: or from issuing
its capital stock "a par in payment or
exchange for bonds or other Indebtedness
now outstanding or hereafter issued, in
conformity with the requirements Of
the act
1t further provides against the issue of
capital stock Of one class convertible
into that of another class, except share
for share. The section also provides
that the act shall not be construed to
prohibit the pledge of bonds as security
for other notes, bonds, etc, not issued in
violation of the act, but in order that
this privilege may not be used merely as
a means to procure the issue of bonds III
violation OF the restrictions of the bill
it is further enacted that such notes or
bonds shall provide that none of the
pledged securities on non-payment of the
secured notes or bonds shall be sold ex-
cept after public advertisement: or in
case the bonds so secured shall confer
upon their holders the right to convert
the same into pledged bonds. the Inter
state Commerce Commission shall have
previously ascertained and certified to
the reasonable market value of the
pledged bonds and the rate which such
value bears TO the reasonable market
value OF the secured notes. bonds. etc,
and that such conversion be at q rate
not greater than in accordance with such
ascertainment and certificate
Authority for Reoreanizations.
in Section u provision is made for the
granting By the commission TO a COM
mittee on reorganization OF any company
or companies of any certificate necessary
with respect to the proposed issue of
stock or bonds, and that the act shall not
operate to prevent the issue pursuant to
any such plan of reorganization of stock
to an amount in the aggregate not ex-
ceeding the par value of the stocks of the
corporation proposed to be reorganized;
nor the issue by such new corporation of
bonds, etc. to an aggregate amount not
exceeding the amount of new money paid
TO the new corporation under the plan Of
reorganization and of existing bonds or
other obligations or debts. provided the
aggregate amount of interest charges on
the new corporation or to which It's prop
erty is to be subject shall not exceed the
aggregate amount of the interest charges
to which it's property was subject before
the reorganization, plus interest on bonds
issued for new money.
Section 10 gives the commission au-
thority TO carry out the provisions of the
two preceding sections
The critics of the bill take the position
that. although the purpose of the three
sections is commendabie they fail to
reach the abuses of ercapitalization.
The advocates of these sections said
that, while they did not go as far as
some desired. st could not be denied that
they had constituted long step in the
direction of establishing national legis-
lation to prevent the future overissue OF
stocks and bonds,
NO MONEY FOR HUSBANDS