Norwich bulletin., 1915-02-17
To Validate Stock
 of NeWHaVen Road
LEGISLATION REcoMMENDEo BY
 MASSACHUSETTS, COMMISSION
FUND FLOATING DEBT
Advises That Roads Embarrassment Could Be Relieved by Uniform Laws in States in Which It Operates.

Boston. Feb. f6.-LeEislation to vali- date the stock of the New York. New Haven and Hartford Railroad company outstanding on June 90, 1914, including 8 portion declared to have been issued without authority of Massachusetts laws since 1910, Is recommended by the public service commission in a report hled today. It is further recommended that the funding of all the floating debt outstanding be authorized.
 The Practical Situation.
 says:
 The unauthorized stock has been issued and is in the hands of the pub lie; the floating debt has been incurred and the notes which represent it are likewise in the hands of the public Nothing which the commonwealth can now do can alter the situation"
 Much of the present emba rrassrueut in connection with the affairs of the company could be removed, the com mission states, by recOnciling conflict Ing laws of the various states in which the company operates. The Commis- sion suggests that the company seek Tor changes in Connecticut laws
 Under the laws of Connecticut" says the report, the company has had and still has welI-nigh complete Ii- cense to do as it pleases, and it the past has exercised these broad bowers
 
 have caused serious injury both to the general public and to investors.
 Wants te Probe Investments.
 The commission asks for power to investigate. with the help of the attor- ney general, all the investments of the New. Haven company in the stock and securities of other corporations and all the contingent liabilities which 1t has incurred through the guarantee of se- curities, with a view to determining the legal status of these investments and guarantees.
 Future Policy of Road. statement of the future policy of the directors of the New Haven com pany, as outlined in q vote taken on Feb. by the directors at the request or the commission, is also given.
 Without undertaking to express an opinion in regard to all details the commission says the policy declared in this vote is- on the whole. commend - able and should lead if it is followed out. to a simplihcation of the affairs or the company, to 8 concentration of attention upon it's proper transDorta- ton business, and to other needed re- forms Of past practices Present Management Sincere. The commission adds that, while it is believed the present management is Slncere the state cannot safely guide lt9 e1NtLpLl DS q mere voluntary state ment which has no binding force when homogeneous continually change
 The New Haven says the report,
 after fouting Massachusetts laws for years. now shows signs of penitence and expresses a desire to abide by our | laws. It may be that the stockholders will be able to recover damages from the directors responsible for past waSteful transactions, but prolonged Htigation is certain to precede any such recovery.
 The New Haven company has not coRforned either to the letter or to the spirit of cur statutes. It has not con- fined it's activities to Q legitimate rail road business, nor is there any pre- sumption that it's capitalization repre- and prudently made, even within the 1 elastic limits of it's Connecticut char i ter.
 The evils which have fallen upon the New Haven company have been due not to too much hostile legislation 1 but to toe much friendly Iegislation'' Changes Recommended. The commission then cites the Con necticut laws and recommends that the company seek the following changes in that state:
 "A change 50 that it will no longer l be possible for the company to ac- quire and hold, either directly or in directly. the stock and securities of any other corporation which it does not now control.
 "A change depriving the company of the powers and privileges to which it succeeded upon it's merger with the Consolidated Railway company of Con nectcut, except so far as such powers may be necessary for the operation and maintenance of any property which it now possesses
 "A change which will no longer make It necessary for a majority of the di- rectors of the company to be resi- dents of any one state.
 Under the present laws of Com necticut, majority of the directors must be residents of that state. A change so that il will no longer be possible for the company to issue unlimited stock and securities or to make unlimited guarantee of the se- curtties Of other corporations without proper public supervision and regula.- tion.'
 The validation act presented by the commission is so drawn as to cover l only stock issued and outstanding in l the hands of the public and does not validate the 22S.s91 shares which the company holds in it's treasury This treasury stock should be can celled, the commission says. adding 1 that the company has given assur- ances that 1t is to take steps in this l direction at once. If this step is not 1 taken. the commission advises that the 1 act shall not take effect until such | cancellation is accomplished. Drafts of Three General Bills. l Drafts of three general bills accom- ] pauy the report The first is a, per l fecIing redTaft of the acts of 1913 rel 1 alive to the issue by railroad corpora l tions of stock bonds, notes and other l evidences of indebtedness. Another would allow any railroad corporation | to issue preferred stock of one or more different classes and a. third l would prohibit the issue by railroad l corporation of fractional shares. l
 Expelled Spanish Minister Sails for Havana.