Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1911-12-11

troll; either the federal governmen
and the states will come to genera
understanding as to the principles tt
be adopted in the control of securit!
issues, Or the railroad systems will
be given the opportunity to exchang.
their state charters for federal ones,
says the report.
Until such exclusive jurisdiction
can be established the creation of {
separate administrative body subject
! ing the railroads to new system Of
| concurrent supervision, in addition tt
the many old ones which now exist
does not seem just, expedient or eco
nomical."
For the present the commission
recommends that complete publicity be
required to surround all issues of
securities and that any interstate rail
road issuing stocks and bonds be re-
CURED to furnish to the interstate
commerce commission a full state.
ment OF the details of the issue, the
purposes for which the proceeds are
to be used, and an accounting for the
expenditures of such proceeds.
Accurate knowledge of the facts
surrounding the issue of securities,
and the expenditure of the proceeds
is the matter of most Importance, "
tue commission says. ut is the one
thing upon which the federal govern
ment can effectively insist today; it
is the fundamental thing which must
serve as basis for whatever regula-
ton may be desirable in the future.
III full publicity be given we shall
also lesson the fraudulent creation of
debt. 1t is the degree of publicity
rather than the stringency of the law
which gives to the people any real
protection. A stringent law made
quately enforced and secretly evaded
is the worst thing that can be posi-
bly, Offered to the public, because it
gives color to claims which have no
foundation and TACT"
In determining the physical value of
railroads in relation to their securi-
ties now outstanding, the commission
puts aside as entirely out Of the
question any attempt to scale down
outstanding securities on the ground
that constitutional difficulties, public
expediency and confidence in Amer.
lean railroad investments would for
bid it.
rhe commission feels that railroad
development has gone so far and
such a volume of securities has al
ready been issued that the only CUES.
lions of real Importance are whether
it is desirable for the federal govern
ment to regulate the issue of future
securities. and, if so, to what extent
and in what manner. The complex
relations between securities already
has made it impossible to
treat the question of future regulation
as it might have been treated if those
securities were not already in ex-
istence.
In cases where it is found that the
issued securities exceed the physical
the commission is not in
favor of forbidding further issue until
the deficiency is made up, because
tho principle if generally applied
might prevent railroads from securing
capital necessary for the service of
By empowering the interstate COM
merce commission to enforce public.
lty and to make physical valuations,
the commission believes there will be
no necessity for law to require ap-
prevail in advance for issues of securi.
lies. Advance authorization. the
commission holds. would tend to
create on the part of the investing
public, an impression of a guaranty
'r official recognition of values which
10 administrative authority could
'afely give. The commissioners do
lot believe that the cost of reproduc.
ng railroad properties, however care.
July computed, is the sole element
o be considered in determining the
present value of railroad, or that |
he outstanding securities should be !
made to conform to any arbitrary !
standard.
The commission believes that the
and face value of outstanding
securities has only an indirect effect
'pon the actual making of rates and
hat 1t should have little IL any
weight in their regulation.
The commission does not approve
f any unqualified proposition to pro-
ibit ownership of stock of one road
y another. To do so, the report says,
you'd involve too much disturbance
I existing relations whatever may be
he evils attendant upon such hold
ngs. 1t is recommended, however,
hat wherever group of men or COM
anies has bought majority Of stock
road they may be properly re-
uired to buy the minority at the
anne price.
Tu0llo lllnc 0C nC0nl