The sun., 1910-02-18
AMENDED RAILROAD BILL IN
MERGERS OF NON-COMPETING
LINES PERMITTED.

ErOhley Lines 10 Como WhLnhn INC SuTN-
dIctlOn of Court e6 Commerce 20 he
Created-ReguIatiOa Of Issues OF
stocks and Bonds for Such Purposes.
WASHINGTON. Feb. 1.-THE Townsend
Administration railroad bill was reintro-
duced In the House to-day by its author.
Representative Townsend OF Michigan,
with many amendments drawn by Attor-
ney-G General wickersham. These changes
have to do with the form Of the bill In
the matter OF the creation OF the court
OF commerce. in the regulation OF issues
OF stocks and bonds and in the inclusion
OF the electric railways OF the country
within the purview OF the measure. There
is considerable modification In the lam
guagc Of the bill in various sections. Oi
the original bill sections ls and Il have
been rewritten entirely. Four new sec
tions are added.
In thia reintroduced measure the COM
merce court is limited in power to that
OF a Federal circuit Court to meet the
objections made TO the original pro-
vision that the court would have more
extensive jurisdiction than the now ex-
isting Circuit Courts.
Amendments have been made to the
stock and bond provision OF the bill to
permit the reorganization OF railroads
and for the merger OF q railroad under
conditions not expressly prohibited.
It is provided in the section OF the new
bill dealing with this particular phase
OF the subject that nothing in the law
shall prevent a railroad corporation from
acquiring the stocks and bonds Of another
road not competing with It through the
issue OF its own stocks and bonds so
long a. It is provided that the total amount
OF the par value OF the stocks and bonds
SO issued shall not exceed the face valua-
ton OF the property Of the railroad the
stocks and bonds Of which have been 30
acquired. It is expressly provided that
this valuation is to be asoertained by the
In terstate Commerce Commission.
Absolute prohibition 10 imposed on
officers OF railroad corporations smenable
TO the interstate commerce regulations
with respect TO the issuance Of stock
without previous or simultaneous pay
ment to the corporation Of not less than
the par value OF such stock. An excep-
ton is made in the case Of notes not ma
turing for two years. II such stock is
sold below par it will be the duty OF the
Interstate Commerce Commission to see
that il is not at less than its reasonable
market value. and II il has no reasonable
market value then the Interstate Com
merce Commission is charged with the
duty of fixing it's reasonable selling price.
But corporations may issue stock for
refunding purposes or to cancel other
Indebtedness. These provisions with re-
spect to the issue OF stocks and bonds
bill in order TO cover the strong objec-
tions made against those provisions in
the original measure in reference to the
regulation Of the issue Of securities con-
tanning water.
Tho electric railways in the reintroduced
Townsend measure receive the conces-
sious they demanded at recent hearings
before the House COMMITTEES on Inter
state and Foreign Commerce, when oonn-
plaint was made that there was discrimi-
nation against them.
There Is an addition to section Of the
bill which provides that nothing in this
section shall be deemed to authorize the
making Of an agreement for the pooling
of freight In violation Of the provisions
of section Of the act Of 1857
Attorney General Wickersham gave out
a statement tonight explaining the
amendment TO the bill amending the
interstate commerce act which he pre-
pared after advising with the President
Elkins and Representative Townsend,
who introduced the interstate commerce
bill. The most important feature of the
proposed amendment Is the rewriting of
the paragraph relating to stock and bond
issues by carriers. Mr.. Wickersham said:
The amendments are carefully framed
80 that the new act shall not operate to
impair any contract. mortgage or other
instrument made prior to the passage of
the act. These various provisions en-
body the result Of careful consideration
OF many suggestions from attorneys of
railroad companies and banking houses.
and as now framed will. il is believed.
prevent the bill from interfering with
any legitimate financing while effectually
preventing the issue Of stock and bonds
without proper legal safeguards