Arizona republican., 1913-07-20
Bill in Equity to Be Filed ill Federal Court at San Francisco Denying State Jurisdiction Over Pro posed Note tissue
ARIZONA COMMISSION
 ALSO TO BE RESISTED
Road Says It Cannot Sc cure Purchasers for It's Issues Upon Such Terms as Are Prescribed by the Commission
ASSOCIATED PRESS DISPATCH

1 SAN FRANCISCO, Cal, July 19- 1 Easing q suit on the claim that the
 California state railroad commission has no power to prescribe the terms and conditions upon which a corpora tion doing business in several states may secure money necessary for it's corporate purposes, the Southern Pa cific filed in United States district court at san Francisco today q bill in equity to enjoin the commission from asserting it's jurisdiction over the pro- posed issue for equipment trust Certi-
 ficates which the company plans to
 make for the purpose of acquiring the
 rolling stock necessary for local and
 interstate business
 It was announced that similar suit would be filed on Monday with the
 United States district court at Phoenix against the Arizona corporation com mission to enjoin the commission from asserting it's jurisdiction over an issue of twenty-year notes asgregating $30,- 00O.0O0 which the company contem- plates issuing for capital for eXpendi- lures in several states through which it operates.
 Both suits represent further efforts on the part of the railroads doing local and interstate business to clear up the question as to where state authority ends it's power over essentially the in terstate operations Of carriers. The suit to be filed in Arizona sets forth that the company desires to provide capital for additions and improvements. The bill states that the claim of the Arizona corporation commission pro- posed that the notes shall be void with out it's approval and it's claim to a right to impose terms and conditions in an order authorizing the issue of the notes made fl impossible for the Southern Pa ciftc company 10 find purchasers for it's 1 notes or to secure the necessary money upon such terms as may be imposed by the commission
 It is alleged in the bill filed here to- day that the suits are rendered ncces- sary because of the road provisions of public utilities act of California which declares void all notes. bonds and other evidences of indebtedness by any pub lie utility operating within the state, where the approval of state commits sion has not been obtained. As the Arizona statute is identical with the California act the suit to be filed in Phoenix will be substantially the same Both bills assert that with the state commissions claiming their authority to pass upon all note and bond issues, it is impossible for the company to make financial arrangements essential to it's interstate business except upon such terms as the respective state commissions may impose This, the company claims. is incontravention of it's right to engage in interstate com merce without interference by state authority.
 As outlined in the suit the actions were not directed against the general principle of stock and bond regulation but against the right of q single state to interfere with the company's finan- cial arrangements for money to be used in number of states. The company asserts that if this power is conceded to one state it must be conceded to all and this would result in conflict of authority which would prevent an in terstatc railroad from working out q financial plan that would satisfy all state commissions Tn claiming it's right to issue the proposed equipment trust certificates without the approval of the California commission the rail- road company declares that a guaranty of these certificates does not consti- tute lien upon any property situated in the state but that the certificates to be executed will be guaranteed outside the state and the equipment will be distributed over the lines of the South ern Pacific company in the various states through which it runs.