The Bridgeport evening farmer., 1910-01-18
SAYS NEW HAVEN ROAD IS STATE
 LAW BREAKER

VESTIGATTON, REPORTS TO THE LEGISLATURE THAT THE
 CONNECTICUT SYSTEM HAS VIO- LATED MASSACHUSETTS, STAT .UTES-SETTLEME sOF OLD BATTLE OF THE CHARTERS LOOKED FOR.
 ] Boston, Jan. 1S.-That the New York violated the laws of Massachusetts and that it should at once obtain the ap- prova1 of the Legislature for it's con- solidation with the Consolidated com pany of Connecticut and of the issue of large amount of stock and bonds
 under penalty of a forfeiture of it's ] charter in this State, are the conclu- sions of a special commission which has investigated the situation and just
 submitted it's report to the Legisla- rture.
 l The commission finds that the essen tial factor which has created the strained relations between the New Haven road and this State is the ex- l ercise by the company of privileges granted by Connecticut in violations of 1 the law of Massachusetts. These priv | ileges, the commission claims. amount 1 to converting the company into a non | supervised holding company unless Massachusetts shall in some degree ex- ercise supervision.
 | There should be a common rule of corporate conduct, uniform in several | 3,,1,;e- I fofi fnI, 1 federal control. The commission points
 out that the president has declared in favor of such control and if approved | by Congress will in part solve this
 question.
 | The commission suggests that the New Haven company within a reason able time should petition the Leg1sla- i ture for the authorization of it's acts. Tn doing so it should submit a com- plete report of it's finances. The com-
 mission points out that Massachusetts cannot validate securities which are issued for any property other than for | transpOrta ton. If the company con- tinues to exercise the privileges with l out authority, the commission favors | forfeiture. It is convinced, however, l that it's suggestions will solve the diff | fculty
 l New Haven Jan. 18.-A direct issue l
 necticut and Massachusetts is the in l terpretation here in railroad circles of l the findings of the special legislative
 commission in the latter State holding
 that the merger of the New York, l New Haven & Hartford Railroad Com Company was illegal that large
 amounts of outstanding stocks and | bonds are unauthorized and, that, in
 the absence of the healing act in Mass 1 achusetts the New Haven's charter 1 should be forfeited.
 l The New Haven Company holds charters both in Connecticut and Mass achusetts As regards Connecticut the 1 scope of the charter is settled by unan-
 imous decision of the Supreme court | of the State last April. In that case
 a friendly suit was brought to deter
 mine the legality of the New Haven's guarantee of stock of the New Eng 1 land Investment and Security Com pany, whether such guarantee was valid in Massachusetts. The court 1 held that a corporation chartered by Connecticut and sued in that State as | a Connecticut corporation upon an ] obligation which it had lawfully in cured and had promised to discharge 1 in Connecticut, cannot escape on the ground that it is also a corporation | in massachusetts, under the laws of which no such liability could have been l legally assumed. The court held that the New Haven company as created by l the consolidation of 1872 was a Con- necticut corporation subject to the | laws of Connecticut with regard to lia- bilities incurred in the State. This. | it was held by the representatives of l the New Haven company at the time | validated the alleged illegal acts of the company at least as regards Con- necticut
 1 The highest officials of the company | have stated in the past that forfeiture i of the charter in Massachusetts would
 be regarded favorably by the corpora 1 ton as it would affect practically only
 six miles of track between the Con-
 necticut State line and Springfield and
 do away with many of the issues rais-
 ed by the Massachusetts charter. | The legislative settlement, however, 1 of the Boston & Maine merger contro- versy is regarded as precedent that
 the old battle of the charters will l hn Jnl. will nrio