New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-11

far carried all It's cases to decision oy
IN. highest court was accepted as guar
antee that II would pursue the same course
in this case.
The decision will be the principal theme
~ discussion at the next meeting Of the
cormission. to be held on Tuesday. The
matter will then be referred TO counsei TOT
the commission for a report as to the ad-
visibility OF carrying n before the Court
Of Appeals.
Meanwhile the hoodgates were opened to
speculation as to what bearing the decis-
ion would have. II not appealed or IL sus-
tained by the highest court. upon the re-
organization Of bankrupt railroad corpora
lions There was general inclination 10
accept the decision as a partial paraIyza-
ton OF the public service law, and In
some quarters fears we're expressed that
the decision had opened way 10 stock
jobbng and tho issue Of unlimited quaint
! ties of wstered stock.
This pessmistic Interpretation was ridi-
cuIed by a lawyer who has been closely
connected with the case and Is familiar
with all Of its phases. The decision has
been received in an entirely wrong spirit.
he said. ut does not mean that the Pubic
Service Commission Will he deprived OF any
of the powers vested in it by law. but II
means that a particular question upon
! which the commission and bondholders
committee disagreed has been decided in
favor OF the committee.
In his opinion Justice Clark held that
the power ~ the Public Service Commits
cf, Ie.o ha
proposed issue Of bonds and stocks was In
conformity with the railroad reorganization
statute which provides that the new Sc
cCrities should be issued for the purpose
OF discharging actual and not fictitious
debts Of the company
Now. the question that arose between
the commission and the committee bore
upon this very point and constituted the
only issue before the court. The commission
refused to approve the reorganization plan
for the Third Avenue Railroad Company
on the ground that the proposed securities
We're In excess OF the actual value Of the
property as established by the commission.
The plan. however did not contemplate
the replacement of fictitious or improperly
issued securities with an equivalent of tho
new issue. The bondholders committee
submitted to the court that the only secur-
ties TO he taken care If under the reor
ganization plan were those issued honestly
and for true value. the whole proceeds Of
which had gone into the property of the
corporation.
This was in entire conformity with the
reorganization statute. which the higher
court held has not been repealed by impn-
cation through the passage Of the Public
Service law ! do not see how watering OF
stock or stock jobbing can be done under
this provision Of the law On the contrary.
this statute not only protects the public.
hut also the holders of securities that have
been issued honestly and for true value.
Should the Public Service Commission
decide to appeal the case the reorganlza-
ton OF the Third Avenue Railroad Com
panv will be held up AZ least until Octo-
Der.
In the United States Circuit Court II was
said Yesterday that the decision Of the
Appellate Division affected the federal
courts only in respect 10 prolongaton OF
receiVerShirs