The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-08-27
ONLY RECOURSE rs TO
BUY IN PROPERTY AT SALE

The proceeding lie extra judicial
from beginning TO end. The courts
have no control over It II Sc
curity-holder does not happen to like
the way in which his property is be-
ing dealt with by strangers to II.
whose only interest Is in making
money out of his misfortunes. his
only remedy ia 70 attend the sale and
bid upon the property in competition
with the committee. which alone
holds the bulk of the securities and
can deliver them In payment OF the
purchase price. This means that his
position Is Impossible and that he is
forced to subscribe TO any terms
that the committee may impose on
his participation in the reorga niza-
ton The committee controls thu jul
dicial proceedings. When 1t Is ready
to reorganize the court Is asked 10
sell the property at public auction.
AS the committee then speaks for
the security holders. the court has no
alternative. The so-ralled sale I'M
der these conditions is always a farce.
The property is invariably bought b.
the committee at the upset price 1x-
ed by the court-Just about enough
to pay the receivers certificates that
have been issued by the court again st
the property and the vast expenses CT
Commerce Commission nor the courts
have any Jurisdiction over the plan
or power to pass upon It's Justice.
Throughout the legal pi oceedlng~
resulting IN the elimiua ton OF the
stock holders. and often OF the credi-
tors and hondholders the voice OF
those interested in the property is
not permitted to be heard. l. II DO
said that the committee merely ex-
Is, ~
depositing security-holders. the an
swer is that the security holders have
been stripped OF all ability and op-
portunity TO protect themselves under
the stupid and Anticipated processes
Of law that govern these proceed
inEs r. as often happens, the PROG
erty 10 located in different States, the
courts of each state go through tho
mummefy of conducting sales" that
are ancillary or subsidiary TO the sale
in the main jurisdiction. The entire
procedure Is SO cumb ersome, compli-
Gated and expensive that not even the
large security-holders could afford TO
take an active part II the opportunity
were afforded them to do so.
The cost or reorganization of the
average trunk line system is anywhere
from 100000 TO s3.0oh,o0o, which
comes out OF the pockets OF the se-
curity- holders. either IN cash or by
way OF further burdens IN the reor-
ganized road. 1t is easily ZEN times
AZ large a. in any other country and
necessarily so because OF the COM
piicAtions OF the procedure.
This Erotesuue condition can readi-
~ be remedied II the lawyers who
understand this branch Of tho law
would sink their private interests and
take a hand in the work OF reform
Ing an intolerable system of which
they are partly benehciariss.
tA) A national incorporation law
Is tho ffrst necessary step In the pro-
cess Of sfmpliacation Of the proceed
ure.
tb) The court proceedings for the
appointment OF receivers should he
instituted by the Interstate Commerce
Commission. somewhat after the fash
ion in which the comptroller OF the
currency appoints receivers for in
solvent banks. The Inauguration, OF
that method OF dealing with matt onal
banks and in the several States in
which the bank superintendent acts
for State banks and trust COMPANIES
and the superintendent of insurance
for insolvent insurance corporations.
resulted in minimizing the expenses
and in expediting the closing out Of
'lnsolvent companies in their respec-
tive Jurisdictions
tc) Notice OF the application for
receivers should be given by publi-
cation or otherwise to all security
hoiderp, with the opportunity to them
to be heard as to the necessity for the
receivershtp and the personnel OF the
receivers
td) Tho plan OF reorgani=ation
should be subject to the approval OF
the Interstate Commerce Com mission
and OF the court In the case Of rail-