The daily telegram. [volume] (Clarksburg, W. Va.) 1901-1926, 1911-12-11
Publ 9 Is
THE b ss
Gl ssI6lI
Impossible at Present to Put
Railroad Securities under
Federal Control,
PROBLEMS UNSOLVED
Conflict with State RsguIa-
tons Would Inevitably
Result.
PRoBLEMs. UNsOLVED

WASHINGTON. d. C., Dec. IL
The Railroad Securities Commissfon,
headed by Pres. dent Arthur5T Had
ley. OF Yale, has reported that 1t
would be practically impossible at
this time to place Issues of railroad
securities under federal control.
The commission recommends that
enforced publ city for all railroad
financing is the most effective
weapon against stock watering which
the government has at its command.
The commission was created in
1910, when the Senate refused to
accept House amendment to the
pending railroad bill, providing that
all future issue OF. stocks and rail-
road securities be placed under the
control of the Interstate Commerce
commission. Many OF the Senate
Democrats opposed It as an invasion
of states rights Pres dent Taft at
that time told Republican leaders
the party was committed to such a
measure, but when It appeared inn
possible to pass it, the President
agreed to have the clause eliminated
with the understanding that. COM
mission to study the subject would
be allowed, This was done and the
commissions began work In the
autumn of 19I 0 hearings.
were held and ChaIrmas Hadley
studied the problem abroad.
The commissions report is dis
tinctly adverse to the legislation
proposed in the railroad bill.
President Taft in transmitting the
report to Congress today, declared
that he heartily -concured IN the rec
concentrations.
The commissions principal con-
illusions are:
That any attempt by Congress to
adopt the policy of federal regula-
ton to the exclusion OF state regula-
ton, would be premature.
That for present, state authorities
should make a concerted effort to
harmonic existing requirements.
That Congress should prepare for
the future by giving consideration
to a federal Incorporation act which
would permit Interstate railroads
to exchange their state charters for
national ones.
The commission takes the ground
that constitutional questions involv.
ing the scope and extent OF federal
authority are unsettled and will re-
main so for sometime; and that
while such condition exists, to
superimpose federal regulation upon
state regulation would add to the
conflicts and complexities, which in
the public interest should rather be
diminished than increased.
'fUnless the constitutional power
of Congress- to regulate securities of
interstate railroads is definitely es~
tabllshed as being exclusive of state
control either the federal govern
ment and the states will come to
general understanding as to. the
principles to be adopted in the con-
troll of security issues. or the rail-
road systems will be given the OPP
portunity to exchange their state
charters for federal ones" says the
report.
Until such exclusive jurisdiction
can be established the creation OF a
separate administrative body sub
jecting the railroads to a new system
of concurrent supervision, in addi-
ton to the many old ones which
now exists does not seem just, eXpe-
dent or economical"
For the present, the commission
recommends that complete publicity
be required to surround all issues
of securities and that any Interstate
railroad issuing stocks and bonds
be required to furnish to the inter
state commerce commission full
statement of the details of the issue.
the purpose for which the proceeds
are to be used, and an accounting
for the expenditures OF such pro-
ceeds.
Accurate knowledge OF the facts
surrounding the issue Of seeuritiess.
and the expenditure OF the proceeds
Is the matter OF most impoftance.'