The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-02-20
HONEST FINANCING
BY RAILROADS NOW
Chairman Clark Of Interstate
Commerce Commission Says
Conditions Changed.
REGULATION HEARINGS ON
House Committee Hears Argu.
ments for Price Fixing
by Big Companies.
REGULATION HEARINGS ON

wAsHfNGroS Feb l9-Hearlngs -
the bills to empower the Interstate Com
merco Commission 10 regulate railroad
stock and bond issues were begun to-day
before the House Committee on Inter-
state ana Foreign Commerce. with Chair
man Clark and Commissioner Clements
present 20 make the opening statements.
Both commissioners were agreed that
honest railway directorates need have no
fear OF the projected legislation.
Chairman Clark went 81 far to say
that the tendency OF the times In railway
financing was distinctly along the lines
laid down In the projected bills. which
with certain monifcations ne thought
should prove acceptable to the railways
OF the United States.
In the instance OF the financing OF
the 3is per cent. bonds OF the Chicago
and Alton Railway a few years ago.
where the Issue was marketed to the in
siders at quotation OF 50 and shortly
thereafter sold by the original purchas-
ers to the insurance companies at 20, /
have the admission OF the late Nj Harri-
mans own attorney that such transac
ton In these days would lot be attempted
FOR the reason that II would be looked
upon as III the last degree unethIcal,"
said Chairman Clark.
He took FOR the awful example" OF the
latest demonstration OF unethical prac-
tice. however. the recent Frisco bond
hotatlon.
1T is this sort OF financing that IL
seems to nsAeceesary that legislation
and administration should be- directed
against" the commissioner added.
Supervision Over Issuca.
The commission should be satisfied
that the stated needs OF the carrier SEEK
ing 10 make a new Notation or to refund
Its obligations shall be legitimate" said
Mr.. Clark. I'm the first place the linden
ture should show the purposes of the loan
on its face.
ALSO the application FOR the issue
should naturally show for what purpose
the funds We're required and how to be
expended. The railways should be held
to strict adherence to the terms Of
their representations TO the comm Sslon.''
With regard To the refund!ng OF ex-
piring issues Or bonds Mr. Clark thought
that the powers Of the commission should
be exercised with q view to insuring the
public against pyramiding Of issue upon
Issue.
The provision of the Sims bill forbid
ding the incurrence OF short time obliga-
lions to an extent greater than per
cent. OF the capitalization Of concerns
had Mr.. Clark's approval
Both commissioners expressed the view
that the judgment OF the commission
statute should be enacted setting one
fixed regulation OF the amount OF capital
10 be paid in at the beginning Of new
railway project.
Commissioner Clements gave II as his
opinion that low rates OF interest on
bonds We're detrimental TO the best In |
terests OF the public when great sacri- !
nee was made In the amount OF actual
cash acquired by the company to the end
that the distantly due obligation was far
in excess Of the immediate benefit 10 the
property through the funds acquired at
the time Of the hotation.
Price Fixing IL DefesAeA.
The necessity for regulation OF prices
and the defence of price fixing contracts
and agreements were argued to-day before
the House judiciary Committee. There
appeared Boyd Fisher OF New York on
behalf OF tie National Efficiency Lea que
Alfred Lucking. representing the Ford
Motor Company: a. b. Knobloch. repre-
senting the Northways Motor Company.
and Charles l.. Miller for the Hamilton
Watch Company.
Mr.. Miller said that price cutting by
large concerns worked grievous wrongs
upon small dealers In all lines.
such firms can afford to take loss
on the small number OF standard articles
which they sell after they have stolen
the value Of the trade name TO bring them
customerA," said the witness. 1T is the
old story Of the something equally good
1.-THE charge was made that the Howard
watch. manufactured by concern COM
peting with our own company and q
standard article, Melted the manufacturers
so per cent. profit. This charge was made
by a notorious price cutter, who gave
the alleged 30 per cent. profit as his
excuse for not handling the Howard
movement. Counsel for the Howard COM
pany compelled him to produce his cost
sheets In court. These showed that the
price cutter was making net profit
OF 1T per cent. on the Swiss substitute
he was forcing on his customars,"