The Barre daily times. (Barre, Vt.) 1897-1959, 1911-12-12
Federal Stock Control Otherwise
Impossible
COMMISSION SUGGESTIONS
The Securities Commission in a Lengthy
Report Specifies Its Reason
for the Finding
Reported.

Washington, Dec, 1.-THE railroad
securities commission, headed by Presi
dent Arthur T. Hadley of Yale, has re-
ported that il would be practically i'm
possible at this time to place issues OF
railroad securities under federal control
The commission recommends that en-
forced publicity for all railroad financing
is the most effective weapon against
stock watering which the government
has at its command,
A distinguished group of investigators
was named by President Taft to CO.
operate with Prof. Hadley. They were
Frederick n. Judson of st. Louis, Fred
erick Strauss of New York, Walter j..
Fish secretary of the interior, and Bal
thasar II. Meyer. a member of the in
terstate commerce commission.
The commission was created in 1910,
when the Senate refused to accept a
House amendment to the pending rail-
road bill. providing that all future issues
of stocks and railroad securities be
placed under the control Of the inter
state commerce commission.
MANY of the Senate Democrats OPP
posed il as an invasion of states rights.
President Taft at the time told Repub-
lican leaders the party was committed
TO such a measure but when it APP
neared impossible to pass il the president
agreed to have the clause eliminated,
with the understanding that a commits
sion to study the subject would be al
lowed.
This was done and the commission
began work in the autumn OF l9l0.
Public hearings were held and Chair
man Hadlev studied the problem abroad.
The commissions report is distinctly
adverse to the legislation proposed in
the railroad bill.
President Taft, in transmitting the
report to Congress yesterday, declared
that he heartily concurred in the recon-
mendations.
The commissions principal conclusions
are;
That any attempt by Congress TO
adopt the policy of federal regulation TO
the exclusion of state regulation would
be premature.
That, for the present state authori-
ties should make concerted effort TO
harmonic existing requirements.
That Congress should prepare for the
future by giving consideration to a fed
eral incorporation act which would per-
NIT interstate railroads to exchange
their state charters for national ones.
The commission takes the ground that
constitutional questions involving the
scope and extent OF federal authority
are unsettled and will remain so for
some time, and that, while such condi-
ton exists, to superimpose federal regu-
lation upon state regulation would add
to the conflicts and perplexities which, in
the public interest, should rather be di-
unfinished than increased.
For the present the commission recon-
mends that complete publicity be re-
quired to surround all issues of securi-
ties and that any interstate railroad is
suing stocks and bonds be required to
furnish to the interstate commerce COM
mission full statement of the details
of the issue, the purpose for which the
proceeds are to be used, and an account
ing for the expenditures of such pro-
ceeds.
In determining the physical value of
railroads in relation to their securities
now outstanding, the commission puts
aside as entirely out Of the question any
attempt to scale down outstanding Sc
curities on the ground that constitu-
tional difficulties, public expedency and
confidence in American railroad invest
ments would forbid it.
The commission feels that railroad
development has gone so far and such
volume of securities has already been is
sued that the only questions of real i'm
portance are whether it is desirable for
the federal government to regulate the
issue of future securities, and if so, to
what extent and in what manner.