The Birmingham age-herald., 1914-01-26
The Massachusetts Commission

4
The Massachusetts Commission
| 1t has long been recognized that the
Massa chusetts commission has with great
success and in the interest both of the
railroads and the people regulated and
| supervised the issue of securities in that
| commonwealth. There is still vivid recol-
| lection of the manner in which the pow-
| ers of the commission We're so invoked
some years ago as to prevent the kind
of financing in Boston which little later
| was undertaken in New York CITY, and
which ultimately resulted in the bank
ruptcy of the New York city street car or
| trolley lines.
| At the time of the incident here referred
| to Boston ranked second among American
| cities in the utilization of street cars by
passengers Philadelphia stood first and
Brooklyn was third, for at that time the
enlarged city of New York had not been
incorporated and Brooklyn was an indi-
vidual municipality.
Men of capital of Philadelphia associ-
ated with two or three of New York
appeared in Boston with intent to pur-
chase the various street car lines and in
fact, did purchase one in South Bos-
| ton. In consultation with men of capital
in Boston who We're interested in these
| lines, the Philadelphia capitalists frank
ly acknowledged that it was their pur-
pose, should these lines come into their
possession, greatly to increase the cap
| ital and also to issue large blocks of
bonds
| They were told. however, that the Mas
sachusetts commission would forbid that
The commission would insist that no new
capital or evidence of debt secured by
bonds could be issued excepting for
actual value. The visiting capitalists
were for an hour or two after that in
f,,, tfn,, oh al xJxn,, -,
with their counsel. At the conclusion of
this conference they said that the propo-
sition was off; it no longer interested
| them, but that they should visit New York
city with intent to achieve there what
the Massa achusetts laws and commission
| forbade in that state.
They did visit New York and the story
told at the time of the bankruptcy of
the New York street railroad companies
revealed a monumental system of bond
| issues which became a burden too heavy
for these corporations to bear. The New
York law permitted, at least did not
| prohibit, the kind of transaction which, If
| it had been allowed in Massachusetts.
would undoubtedly ultimately have bank
rupted the street car lines of Boston
Always Respected
| In financial and business circles in New
York there has always been great respect
| for the wise supervision and regulation
which are established in Massa chusetts
and which prevented such a calamity as
befell the New York street railway sys-
| TENS.
Sometimes In the course of the discus
sions of the past four or five days when
this Massachusetts regulating and super
vising method had been under considera-
tion the question has been asked "Why,
then, did not the Massa chusetts commits
sion stand in the way of such financing
as President Mellen of the New Haven
Railroad company accomplished; for il
Mr.. Mellens financing had been prevented
then the unhappy situation in which the
New Haven Railroad company has found
itself might not have been created
But the prompt answer to that state
ment was that President Mellen always
claimed that he had received full author
ity from the state of Connecticut, under
whose charter the New Haven Railroad
company was organized and has been op-
Grated, There was undoubtedly conflict
of state jurisdiction or authority, stu
alton which lawyers have discovered
sometimes does arise on account of diff
fering statutes in different states Had
the Massachusetts law and a commission
similar to that of Massachusetts existed
IN. Connecticut the high financing, So
called, of the New Haven Railroad COM
p. NJ would have been impossible.
There have been some intiinations since
President Wilson spoke that if authority
is granted to the interstate commerce
commission tc regulate and supervise the
issue Of securities whereby new capital
can be obtained for the railroads the
probabilities are that many features
which have worked admirably in Mas
sacnusetts will be adopted by the national
commission So far as Is known, railway
managers would greatly prefer that a
single authoritative body be constituted
to which prc-eminent appeal can be made
instead of some 30 or 40 bodies which
are authorized under state statute.
1t mas been the common remark here
since President Wilson appeared before
Congress that two of his recommends
tions are now practically adopted or