New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-11-14
Attacks Federal
Incorporation of
Nations Railroads
Step Would Menace Hold
ers of Securities, Says
S. Davies Warheld
By Gordon Dorrance

BAL IN OEE, NOV. To- NAV INC P'~''
proposed FOR Federal incorporation Of
American railroads constitutes no less
than revolutionary corporate legisla-
ton was forced home this morning 20
members CT the Investment Bankers
Association by S. Davies Warield, pres
ident OF the National Association OF
Owners of Railroad Securities. Mr.
Warfeld is also chairman Of the board
Of directors of the Seaboard Air Line
Railway and president of the CONT
mental Trust Company, OF Baltimore.
As railway man, banker and represent
alive Of thousands of railway circuits
and hundreds Of millions Of money in
vested in the leading carriers Of the
country Mr.. Wartield's address was
strongly significant. His talk was
closely attended By the several hundred
bankers gathered for the second day of
their convention.
Federal Incorporation" Mr.. War
field said. "is not only fraught with
danger to the people generally, in that
il takes FIVE out OF six steps toward
government ownership, but it is men
ace TO the holders of all classes OF
for it proposes the greatest
autocrscy in corporate management yet
suggested, and If enacted into law Will
not alone apply to railroad corpora
tons. but sooner or later the same
principle likely will be extended TO all
corporations engaged in interstate
commerce. And aimed as 1t IS at the
public service commissions Of the sew
eral states. IL is an encroachment on
the rights of the states 10 regulate
their own affairs when not inconsistent
with public interest. 1t IS revolution
arv in its purposes and effects.
A Sweeping Plan
"The plan is not that the carriers
usv have the right 70 incorporate un-
dor a Federal act giving Up their sta,s
fLarters. but that the act aroltfarls
will compel the carriers 20 taEe out
charters under the Federal act' h.'
Wa,6eld continued. 40 accomplish
this IL will be necessary for al! exist
inc interstate railroad companies or
panized under state charters to sell
iii their properties 20 new corpora
lions 70 be organized under a FED
eral act. changing the fundamentals
incident 70 present railroad existence
"a plan so sweeping as 70 demand tne
attention Of every stockhoider ana
hcndholder of every railroad IN the
United States.
"Vjrtually all lawyers. other than
counsel for the particular companies
which are advancing this legislation.
are agreed that after the passage OF
anv such bill as has been proposed the
legal status of existing railroad com
panies would be most uncertain ana
bending a final decision by the various
courts Of the many questions whleh
would arise, the situation would be
chaotic"
Mr.. Wakefield asked what might be
gained through Federal Incorporating,
that could not be secured as indicated
By the Supreme Court in It's several de-
cisions touching this point. He declared
that the two most important problems
are, that inter state rates shall be con"
current with interstate rates, and. that
there shall be Federal regulation OF
the securities issued BY carriers.
Cites Court Decisions
"The Supreme Court" he said. "has
decided that Congress has the right to
delegate 20 the Interstate Commerce
Commission the power 20 regulate in
terstate rates 10 the extent necessary
20 prevent them substantially from
burdening or interfering with the in
terstate system OF rates. There Is lit
tie difference OF opinion on the ques-
ton Of the regulation Of securities OF
carriers. The state commissioners
themselves virtually have said that
there is no objection on their part to
an act which will permit the Interstate
Commerce Commission 20 exercise eX-
elusive control of the issues Of securi-
ties by interstate carriers. II resolves
itself. therefore, into the form under
which such control shall be exercised.
For my own part, prefer the bill sub
stantially IS proposed by Mr.. NOW JUS
tice) Brandeis There should be estab-
lished, and quickly. the fixed policy OF
the government toward the railroads,
not alone By one branch OF the govern
ment. but co0rdinsted policy laid
doun b. Congress, with the approval
of the President and, If possible, the
interests concerned"