The Birmingham age-herald., 1914-06-06
ABSTRACT RAILROAD
 SECURITIES BILL

Washington. June 5.-"Close regulation
 and control of the stocks and bonds Of
 railroads by the interstate commerce
 commission is proposed by substitute
 for the Rayburn bill prepared by the
 House interstate and foreign commerce
 committee and considered by the House
 as the last measure of the administration
 antitrust programme. The committee di-
 vided the RaybuIn measure into two sec
 tions in order that one mighS stand if
 the constitutionality of the other failed in the courts The bill makes it unla vful for any common carrier to issue stocks, bonds notes evidences of indebetsd- ness without the approval of the commis- sion"
 The bill broadens the powers of the com mission to require information from rail- roads and other common carriers and prescribes an elaborate system O.; reports. The commission would be authorized uy the bill to require periodical or special re- ports on the financial condition of rail- roads balanced statements of receipts and expenditures in relations to capital ac- counts, and all other financial transae- tions.
 Before Issuing stocks or bonds, the bill would require railroads to file with the commission a certificate of notification, showing in detail the character of the | securities, l0e purposes IOE WHICH they are to be issued. and the disposition to he made of thlm. Such certificates the l bill makes public record and open to in- | spection. The bill would give the com mission wide authority for the examina- I ton of the books of railroads and would provide panalties for the ct ncealing of 1 information from the commission. l Giving the commission authority to su- 1 pervise issues of securities the bill said Tt shall be unlawful for any common 1 carrier subject to the act to regulate commerce. to issue any capital stock ,r certificate of stock or any bond or other evidence of indebtedness or to assume i, any obligation as lessor, gdarantor, pr surety for the securities of any person,
 natural or artificial, even though permit ted by the authority creating the carrier corporation. except for some purpose within it's corporate powers necessary to the proper performance of its service | for the public and not tending to in1- pair the financial ability of the carrier to discharge its duty to the public "It shall likewise be unlawful to issue 1 any such stocks or bonds for the purposes l hereinbefore mentioned or for any other
 purpose unless and until upon applca- 1 tion and after investigation in the prem l ises by the interstate commerce commits l sion of the purposes and use of the issue 1 and the proceeds thereof, such issue is |
 sary and appropriate for the purpose l stated: provided. that nothing herein shall be construed to imply any guaranty | or obligation as to such issues on the part of the United States"
 l The bill exempts from this provision notes maturing mot more than two years | after their issue, when they do not az gregate more than per cent of the cut | standing obligations of the issuing roads. The mea asure provides that the commis- sion, in investigating proposed stock is-
 sues shall hear the authorities of the states through which the railroad des1r- ing to issue securities passes.
 The bill carries prohibition, effective two years after the bill becomes law. against one director acting on more than che railroad under the jurisdiction of the commission, without the commissions ap- proval. It also would make 1t unlawful | for any director or officer of a railroad to profit by the sale or disposition of stocks or bonds.