Federal Supervision of Railroads: Address

Cover Federal Supervision of Railroads: Address
Federal Supervision of Railroads: Address
Judson Claudius Clements
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The next important matter to which I shall allude is that of Federal control of capitalization. Judging the future by the past, we know that it is practicable for a road, with established character and credit, in flush times of pros- perity, to be burdened with as much increased bonded lia- bility as the market will take, without regard to the purposes for which the additional money is to be raised — ^whether for extra dividends or the purchasing of other roads, com- peting or otherwise. Every
...such road is a standing tempta- * tion to exploiters, whether under the old or a new manage- ment, to use the credit of the property for the purpose of im- mediate distribution in the form of dividends or otherwise, regardless of the impairment of the road's future credit or .
the interests of the innocent holders of its securities or the rights of those who must pay the freight.
I know it is constantly asserted in certain quarters that the public has no interest in capitalization, whether of bonds or stocks — that it has no relation to rates.


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