The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-05-08
Carriers Must Get Permits From
Commerce Board to DO
Financing.
PERSONAL GUILT FIXED
Unlawful for a Person to Be
Officer or Director Of More
Than One Road.

House to-udy ny iHt NsOitIW1ltte0 On
interstate and Foreign Commerce.
The measure ia regarded as one OF the
most drastic regulations of the kind ever
proposed to Congress. Republicans ex-
pre.s the feay II may demoralze the
transportation business of the United
states II enacted into law.
with the report to-day on the railway
rehabilitation bill the entire Administra-
ton programme OF antitrust LEGISLATION Is
rov before the House awaiting action.
The series of three bills will be put
through IN short order following a Demo-
e,stic caucus to be held next week to map
out method Of procedure.
The Essential Features.
The essential features of the Admins
tra,ion railway capitalization bill may be
summarized as follows:
Frst--A provision requiring rail-
wavs. before issuing stocks and
bonds, to obtain authority for such
issues from the Interstate Commerce
Commission.
second--A provision requiring pub.
ilcity. through the commission. of all =
facts bearing on tho issue of rail-
way stocks and bonds
TnlrO-A PROVISION making IL un-
lawful for any person to hold the po-
etion Of officer or director Of more
than one railway company without
the approval of the Interstate Com.
merce Commission.
The last provision IL in line with the
prohibition against interlockng directo-
rates contained in the Clayton bill. II Is
this feature which Republicans contend IL
likely to demoralize the relations now ex-
.siing between certain carriers.
The measure provides severe punish
nent in the form of fine and imprison-
ment for violations of the proposed law.
The principle of personal guilt is ap-
piled to all offenses.
officials who fail to make prescribed re-
ports relating to capitalization may be
hned and imprisoned. Likewise they may
he fined and imprisoned II they counte-
nance stock and bond issues contrary to
the methods laid down In the bill.
Restrictions on Officials.
The bill seeks to put a restriction upon
The activities of railway officials. II pro-
hbts them from accepting compensation
from any concerns that undertake IL
finance railway operations. 1t also at
iempts TO put Limitation upno the SAL
aries Of railway officials. The section APP
plying in this connection reads as fol.
lows:
ut shall be unlawful for any officer.
director or directory TO appropriate.
pay or receive as salaries or dividends
any money resulting from the sale
Of stocks or bonds. or from any other
source except from the earnings OF
railroads. and from the earnings only
after proper provision shall have heen
made for the upkeep of the roadbed.
its equipment and facilities"
~. 90 20
~ the Hadley commission plan anS
drastic prohibitions proposed by Repre-
sentatives Sims OF Tennessee and Ray
burn OF Texas. Democratic radicals.
II provides that il shall be unlawful
for any railway corporation to issue an!
capital stock or certificate of stock. o
any bond or other evidence or indebted
ness, or assume any other obligation
unless and until upon application AM
after investigation by the Interstate Com
nerce Commission of the purposes an
uses Of the issue. and the proceeds thereof
{ such issue Is approved by said commission
an necessary and appropriate for tn
purposes stated in the application"
One Year Notes Excepted.
The only exception made in this pre-
h'bition IL in the case of one year note
Issued by railway to an amount nc
exceeding . per cent. of it's outstandin
stock and bond obligations.
The commission Is directed. upon tn
receipt OF an application for authorit
10 Issue stocks and bonds. to serve motto
upon the railway commission Of the Stat
through which the road passes, or in til
absence OF such commission upon tn
Governor or Attorney General OF II
state, setting forth all the facts in II
case
Tho State commission or the Governc
huS ri OIL N
sent to the Interstate Commerce Commi
sion such representations as they ma
deem lust and proper for preserving Il
risht and interests of their people"
Any person or persons who issue stool
and bonds contrary to the procedure la
down by the bill may be fined not lie
th'n $1,000 nor more than $4,000, or
imprisoned for not less than one year n
more than three years. or by both fine Al
Imprisonment in the discretion of Il
court
The provisions OF section 90 OF Z
rate act relating 10 the filing Of repor
by railways are reenacted. They a
supplemo nted by requirement that gu
reports shall hereafter include all info
nation regarding the issuance of stool
bonds and other certificates Of indebte
ncss"
Here is summarized the informant
railways must furnish in seeking autht
ity 10 issue stocks and bonds
First, the amount heretofore issued
and the additional issues desired ia
b. made.
Second thu amount held in the
treasury of the railway as free
asset or pledged. and II pledged thu
terms and conditions of such pledge.
Third the number and amount o.
Prospective issues to he sold. pledged
or held as a free asset the terms o.
sales and conditions of any pledge o.
pledges that may have been made.
Fourth, the preferences of privilege
granted to the holders of any shares
the dates of maturity, rates OF inter
'st and any conversion rights granted
90 holders. and the price. If any. a
which such shares or bonds may b
redeemed.
Fifth. the purposes. in detail, I
which the proceeds of the issue ar
TO be devoted.
Railways that refuse or fail to mi
reports AZ indicated shall he subject
forfeiture of not less than 500
moro than 5000 for each offence,
'lo0 for each day of the continuance
mo uffencc. Any officer who fails or
'us'a To make reports it detail az
ned is to be- deemed guilty OF
uHuriuor and subject tn a fine or
loss than - 600. nor more than S3,
or imprisoninont for a term Of not
nan one year, nor more than three ye
60 both such hnr and imprisonment