New-York tribune., 1910-12-20
&hifF A FEDERAL|ST
Declares Against State Control
and Takes Issue with StetSon.
MUST RETAIN PAR VALUE
Banker Says Certificates of Par
ticipation Would Be Rated on
Basis of Dividends Paid.

Jacob II. Schiff. head of the banking
drm of Kuhn, Loeb & Co, appeared be-
for the railway securities commission
YESTERDAY at the offices of j. & w.
Eelisman & Co, and took issue all along
the line with the views expressed last
Friday before the same body by Francis
Lynde Stetson, legal adviser of J. r.
Morgan & Co.
While the lawyer declared in favor of
state control of railroads, the banker
said the federal power alone should have
any say in the control Of railroad Sc
curities Mr. Stetson declared in favor
of the issue of stock without par value
MI Schiff said in substance that stock
could not dispense with the dollar mark,
Tor the public would compute its value
Or the basis of the dividends it paid
In his statement anent the control OF
railroads. Mr.. Schif said that while he
was not an advocate of new national
Ism. ne considered that the Interstate
Commerce Commission was the only au-
thority that should have any voice in the
control of railroads doing an Interstate
business. He summed no his position on
the subject J.: the words: We cannot
serve two masters and prosper.
in Texas. he pointed out. no foreign
railroad could enter the state except by
a round about way. and other states
had peculiar restrictions of their own.
Besides. il each state had the power to
control interstate railroads there would
arise a conflict between the state COM
missions and the national commission.
Members Of the commission, which is
headed by Dr. Arthur T. Hadley, presi-
dent cf Yale University, asked Mr.
Schiff ahethec he would suggest any
recommendations which should be made
~ the commission.
We have long passed the period when
share capital should be issued for less
than actua; payment on par in money,
remarked Mr.. Schiff, and then added
that he would recommend the prohibi-
iion of the issue of railroad stocks below
;5ar He added. however, that he would
not make this an iron bound rule. but
would add provision that the Inter
state Commerce Commission should
have the power to allow discount. at
concerned. however. Mr.. Sclliff thought
there should he no governmental re
strictions TO fix their values The
values would work out automatically,
lie said.
With regard to the Issue OF stock with
cut par value. Mr. Schiff said that no
matter what the stock certificate men
le 10 soon
fix value for it. on the basis of per
oentage which it paid in dividends lie
took up the Great Northern ore COM
psnv stock which Mr.. Stetson had re-
ferred TO in support of the contrary
doctrine M Schif pointed out that
though this stock WAS merely cerufl-
cate of participation in profits, the quo
7ations always fixed value on each
share as a Standard 1t would be so
with all stocks wheeher they bore the
dollar n ark or not
". Nj Acworth. an English barrlster'
writer on economies and professor OF
economies at the University Of London,
went exhaustIvely into the regulations
o,erning fbe issue of railroad stocks IN
T-r-land. \ parliamentary committee
authorized the formation Of a company
and fxed the capital TO meet the re-
..lireraenrs be explained 1t WAS pos
.l,lr laaH.szt.. that the company Noulu
ii, les,., 4, biiId several lines and that
T,e,lia alent would grant permission 1of
.f,ly = part and in such case the cdpl-
~ alltfa ,rized miS!at he greater imam ilie
7@,eestiz- rf the case demanded
II was announced that Paul ID ord-
,a-h W,lilG he a witness 1o-muTfoN-