The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-12-21
SECURITIES COMMISSION REPORT.

commission to inquire into tho Govern
meut regulation of railroad securities,
and the relation of such securities to
with view TO establishing a right re-
lation between investment and return.
This commission is of d high charac-
ter. comprising President IIsd!ey Of
Yale University, Mr.. Frederick Strauss
Of New York. Balthssar II. Meyer, Pro
fcssor of Political Economy in the Uni
versity Of Wisconsin and Chairman Of
the Wisconsin Railway Commission,
Walter L. Fisher of Chicago. aud Fred
crick \, Judson of St. Louis, late
chairman of the Missouri State Taxation
Commission. This commission has now
made its first report. 1t does not favor
Federal railroad incorporation and su-
pcrvision Of new construction work at
present. II holds that local needs might
be Disseminated against under such
ommeDds that full publicity be cx.
acted from tho railroads, even to the
most minute degree, 80 tht the pubhca-
tion will show the actual facts in re-
lation 10 the stock and bond issues of
the railroads, not only in the home
State, but in all the other States where
the corporation does business, aud the
amount received for such issues, IN
short, this securities commission woui
require the publication of all matters
vol 40, IA, RI Of tot
companies in precisely the same exact
ness AID detail that directors make
their reports 10 the stockholders of the
companies The requirements for such
publicity would be so strict. and the
penalties for misrepresentation or eva
sion so severe, that it would be expected
that 10 corporation would have the
temerty to fail in obedience TO the
law s requirements. If stock sold for
only fraction Of the par value, the
fact would be shown; if bonds were
scalcl by commission or percentages in
auybody's favor, or undue amounts
were paid for the placing Of any Sc
curities, the report would show the
fact, AMI the official doing that sort of
work would be held TO strict account
ability for his wrong.
The commission would depend upon
publicity as the remedy for all evils
under this head. it would not favor the
requirement that railroads should have
issue securities. holding that the rail
road officials themselves arc the best
Judges Of what the requirements are
Of the property in their charge. And
with respect to the par OF securities
sold, the commission sees no advantage
in making any statement of par, the
sale of the securities themselves being
sufficient. with the amount Of the sale
accurately stated,
The commission report makes a
thing in their power to control and reg
ulate the issue of railroad securities
The railroads are State chartered; and
so far as these issues are concerned,
they can be controlled bv the State
which issues the charter. Still. there
seems to be n contradiction here in the
report. which III one place says that
regulation should not be had by the
Federal Government, but should he had
By the State Government; but in an
other place it says that the railroad
officials themselves should not be ham.
percd by such restrictions, but that
they are the best Judges of what they
ought to do with regard TO the issue Of
securities.
But the commission recognizes to the
| full the power of Congress over inter
state commerce. and the necessity for
Congressional regulation of II. And in
this connection the commission makes
strong argument against the "physi.
cal valuation" idea made so prominent
by Senator La Toilette, The commits.
| sion holds that in case such physical
| valuation should be found less than
| the securities already issued, 10 sea lie
down such securities would be both
! Illegal and ineXpcdiept and would in.
! 6ict great loss upon innocent holders
| OF those securities, and would also. by
its destruction Of confidence in Ameri-
eau railroad Investments, indict inn
measurable losses in financial circles.
IL would in fact. put the values of
railroad securities all At sea. and make
investment in them imPracticable.
The report Of the commission is n
strong document. but undulv couserva,
tive. We are surprised TO see that 1t
antagoDizcs President Taft recon-
incubation for National Incorporation
of railroads. This is surely a great mis-
take on the part of the commission,
for the National incorporation of rail.
roads Is the logical solution OF most
of the difficulties in tho regulation Of
interstate transportation Without that
National incorporation the power of
Congress 10 supervise and control inter.
state commerce cocs lame. and the
courts are all at sea in making effect
i've construction Of laws for various