New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-01-27
.FlV0RS FEDERAL CONTROL
uo,,d Correct Many Evils Ex-
' ~" Tells Securities Commission

Tar. ga protest against what
I'm So government interference" In the
- 49, ,,~.+ion OF railroads was made by
eaplIa- nswes. president Of the Central
ChA'I'1r Germany Of Illinois, in the hearing
lr. - before the Railroad Securities Com
nission. ..,s while he favored a gen
Nj monument regulation Of public utl-
era eosrations. he opposed control which
iD "a discourage developments and initla-
Nou'0 Tbat restricting dividends resulted
t'e..sirs5 service 20 the public, he SAID,
% 80, sssr shown IN Massachusetts,.
isD Moody. called as an expert on rail-
.sourities. cited instances 20 show
fe1a .s5sral control Of securities would be
VIZ TIE New York. New Haven a
ess -.S,rd road oy purchasing trolley and
h1...,o lines had created a mononoly
'.~,Nc between New York ana boston
,5s Capitalization Of the road had been
.esssd 600 per cent, he said. The rates
- lake shore Railroad we're higher
-,,sor Of the roads having been ac-
bv ne New York Central. MI
49, testified AT the present time the
-. vork Central IS more worried over
~ teaoirz q its fnances than II IS IN
...osinr the efficiency Of the service,
n,..,,-.a ths witness IN the sale OF an
- rsnroa6. he SAID. the primo eonsid-
80, vas "rhe inmeciate prospect Of
80 from s506lo.009 20 500 100000 in the
-,riBulst.on Of securities.
sieek iobbng" and other evils incident
-. 49, watering" Of stock, lIr. Moody
,s,~gs-. were some Of the things that
- ss remedied by federal control
a. Moody testified that many roads were
,,s~z interest CT stock issued Tor equip
-. long after the equipment had worn
-. .r5 after the asset for the stock mad
--...s -. exist. The process OF ISSUING
-. sock f1~ new equipment, with similar
--,,s the witness said, was leading some
!. ..s weaker roads up blind alley.
~.gp- theory. said Mr.. Moody was 10
.-,vise for the paying of Of the obligation
= ,~op5--.on as the equipment were our.
~, DO declared the witness, II a proper
.,s,sr, OF equipment accounting were en-
800 many roads IS consequence
- he thrown into bankruptcy. The
.s,ks- roads undoubtedly would be thrown
- bankruptcy and the stronger. ones
.-.,r5 he IN serious financial difficulty me
80 ~ new capital for equipment does not
s-4,ientlv protect the investor Tor the IN
So whose money goes into equipment
.-~ss,s not IN the railroad but the equip
nent.' ..-- a. ..--.-,~--
,.s railroads into a position where they
M lose their c-ed.,, according to the tes-
umoay Of llr Moody.
e within the next ten years the captain
ls,.o7 Of the railroads Is increased Slo'cOl.-
ri va as seems likely. said the witness,
- ssritv Of the roads 10 pay interest ana
s,,,4srds will become problem.
+ A. -he present time the capitalization IS
losreasi1r AZ tie rate Of billion dollars d
- he SAID. and to make this practieaole
re population Of the United States within
.sn wears would have 10 increase 70 -Jl'-
.6eNJ and rates would have 20 hs IN
creased. Othsrvlze the earning power Oh
the roads would be out Of proportion 10 me
rsp.talizat.on. witness asserted To ccntrol
these features he favored government regn-
iafcr