New Britain herald., 1915-02-17
WOULD DVAL|DATEST0CK
 OF NEW HAVEN ROAD
Bay State Comm SSion for Funding
 Of Systems Floating Debt.

Doo'OI, TeD. i.-LeSlSlaClOn to validate the stock of the New York, New Haven and Hartford Railroad d | company outstanding on June 30, 1914, including portion declared to | have been issued without authority of 1 Massachusetts laws since 1910 is rec i commended by the Public Service com | mission in a reported filed yesterday It is further recommended that the funding of all the floating debt out l standing be authorized.
 { The practical situation is this,' '' i the report says:
 Tne unauth orized stock has been , issued and is in the hands of the public; the floating debt has been in- l cured and the notes which represent IL are likewise in the hands of the 1 public. Nothing which the common | Welath can now do will alter the sit l uation.''
 Reconcile Conflicting Laws. 1 Much of the present embarrassment in connection with the affairs of the company could be removed, the .com- mission states, by reconciling con- l flicting laws of the various states in which the company operates The ! commission suggests that the com- | pany seek for changes in Connecticut | laws.
 Under the laws of Connecticut" l says the report, 'the company has | had and still has, we'll nigh complete | license to do as it pleases, and in the past has exercised these broad l powers with freedom and reckless ness which have caused serious in- jury both to the general public and to investors.''
 The commission asks for power to investigate with the help of the at torney general, all the investments of the New Haven company in the stock and securities of other corporations and all the contingent liabilities 1 which 1t has incurred through the guarantee of securities, with a view to determining the legal status of these investments and guarantees. A statement of the future policy of the directors of the New Haven com pany as outlined in vote taken on February by the directors at the request of the commission is also given.
 Claim Policy COmmendable.
 "Without undertaking to express an opinion in regard to all details"
  clared in this vote is, on the whole. Commendable and should lead, if it is followed out, to smplfcation of the affairs of the company to con- centration of attention upon it's proper transportation business and to other needed reforms of past practices"
 The commission adds that, while 1t is believed the present management Is sincere, the state cannot safely guide it's action by a mere voluntary statement which has no binding force when mana gcments continually change.
 '"The New Haven,' says the report, after fouting Massachusetts law for years, now shows signs of peni- tence 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 litigation is certain to precede any such recovery.
 "The New Haven company has not conformed either to the letter or to the spirit of our statutes. It has not confined it's activities to a legitimate railroad business, nor is there any presumption that its capitaliZations represents as a whole investments honestly and prudently made, even within the elastic limits of its Con- necticut charter.
 "The evils which have fallen upon the New Haven company have been due. not to too much hostile legisla- ton, but to too much friendly legis- lation.'
 For Change of State Laws.
 The commission then cites the Connecticut laws and recommends that the coml<ny seeks the following changes in that state:
 "A change so that it will no longer be possible for the com pany. to acquire and hold. either di- rectly or indirectly, the stock and secHrities of .any other corporation wheh it d0es not now control. Achange~depriving the company c Bic powers and privileges to which
 ucceeded upon it's merger with
 Consolidated Railway company of 9hnccticut, except so far as such pAwers may be necessary for the op- elation and maintenance of any prop Ry which it now possesses. ss "A change which will no long CT make it necessary for Q major ity of the directors of the company to be residents of any one state.
 Must Be Residents. ? Under the present laws of l Connecticut, a majority of the di- l rectors must be residents of that ] state.
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