twenty years, unless the municipality shall discontinue the proceedings; at the end of the ninety day period, or so soon thereafter as may be convenient, the commission shall certify its determination to the clerk of the municipality, whereupon the exclusive use of the property vests in the municipality. The laws of Indiana and Colorado provide that the exclusive use of the property shall vest in the municipality upon compliance with the terms of the order of the commission. In Ohio the determination of the commission is not binding upon the municipality unless the council accepts it by ordinance, which shall be ratified by a referendum vote of the electors. In Arkansas, on the other hand, the municipality is obligated to consummate the purchase by complying with the terms of the order.

3.32 Discontinuance of Proceedings.

Wisconsin:

In the case of public utilities, the municipal council or board may at any time before the determination of the commission, by resolution, discontinue the proceedings to purchase, but such resolution shall not be of force and effect until thirty days after passage and publication, and in the interim shall be subject to confirmation by a referendum vote of the electors, provided, that before the expiration of the thirty days' period, a petition of ten per cent thereof, or of five per cent thereof in cities of the first class, requesting the same, be filed; in the case of street and interurban railways the proceedings may likewise be discontinued, within thirty days after the notification by the commission, by a similar resolution, similarly subject to confirmation by referendum on petition. After any such proceedings have been discontinued, no further proceeding shall be instituted until at least four years have elapsed from the date of the discontinuance of the last proceeding.

3.33 Judicial Review of Determination.

All of the laws provide for judicial review of the determination of the commission, either by action instituted against the commission, or by appeal. In Wisconsin and Indiana, if the plaintiff in an action to review shall fail to establish to the full satisfaction of the court, that the compensation is unlawful or the terms are unreasonable, they shall stand as the compensation and terms to be followed; otherwise, the court shall remand the case to the commission with such findings of fact and con

clusions of law as shall set forth in detail the reasons for such judgment and the specific particulars in which such order of the commission is adjudged to be unreasonable or unlawful. If the compensation fixed by the previous order of the commission be adjudged to be unlawful, the commission shall forthwith proceed to set a rehearing for the redetermination of such compensation as in the first instance. The commission shall, forthwith, otherwise alter and amend such previous order, with or without a rehearing, as it may deem necessary so that the same shall be reasonable and lawful in every particular.

3.34 Purchase by Agreement.

The law of Indiana provides that the municipality may, in lieu of a determination, proceed to purchase the property by agreement with the public utility on approval given after hearing by the commission of such purchase and the terms of such agreement. The laws of Arkansas and Colorado seem to presuppose the right to purchase in such manner by providing for the determination of compensation by the commission only when the public utility and municipality are unable to agree upon the just compensation to be paid or other terms of the purchase. In Ohio the law provides that any municipality may at the time of granting an indeterminate permit agree with the utility as to the compensation to be paid and as to the time or times when the privilege of purchasing may be exercised, but such times not to exceed five years apart. The amounts to be paid the municipality for the permit, etc., may be made the subject of the same agreement. Such agreements shall be by ordinance, which in order to be valid must be confirmed by a referendum vote of the electors. When such an agreement has been made, the commission has no power to determine the compensation.

IV

STOCK AND BOND LAWS

NOTE.-There have been here compared those provisions of the various public service commission laws which are commonly known as "Stock and Bond Laws" and which. include the provisions granting jurisdiction over the capitalization of public utilities.

Provisions of the various statutes covering corporations, and corporate powers in general, not limited to public service corporations, have not been included in the provisions here noted.

1. GENERAL STATEMENT

4.1 Creation of Liens on Property a Special Privilege.

In the laws of Arkansas, Arizona, California, Kansas, Illinois, Missouri, North Dakota, Texas, and Wisconsin, the power to create liens on corporate property by public service corporations is declared to be a special privilege, the right of supervision, regulation, restriction and control of which is, and shall continue to be, vested in the state, and such power shall be exercised in accordance with the provisions of the statute. Of the states named, Kansas and Texas cover only railroad corporations. In Vermont the commission is granted jurisdiction over the issuance of stocks, bonds, and other securities by railroads and other public utilities in order to prevent over-capitalization.

4.2 Other States Where Laws are in Effect.

The issuance of stocks, bonds, and other evidences of indebtedness is also regulated by the commission, to some extent at least, in:

2. LAWFUL PURPOSES OF ISSUE

4.3 New York:

A public service company may only upon an order of the commission authorizing the same, issue stocks, bonds, notes, or other evidences of indebtedness, payable at periods of more than twelve months after the date thereof, when necessary for:

(1) The acquisition of property;

(2) The construction, completion, extension or improvement of its facilities;

(3) The improvement or maintenance of its service; and (4) The discharge or lawful refunding of its obligations or the reimbursement of moneys actually expended from income or from any other moneys in the treasury of the corporation not secured by or obtained from the issue of stocks, bonds, notes or other evidence of indebtedness of such corporation, within five years (ten years in case of gas and electrical companies) next prior to the filing of an application with the commission for the required authorization, for any of the aforesaid purposes, except maintenance of service and except replacements in cases where the applicant shall have kept its accounts and vouchers of such expenditures in such manner as to enable the commission to ascertain the amount of money so expended and the purposes for which such expenditure was made.

4.4 Same Provisions.

The foregoing provision, except the parenthetical note, is also the law in Arkansas, Arizona, California, Illinois, Indiana, Maine, Maryland, Missouri, and Ohio; and as to the purposes contained in paragraphs (1), (2), and (3), in Michigan and Nebraska, and in Minnesota as to street railroads. In Maryland the commission may also authorize the issuance of securities,

when necessary or desirable, in the discretion of the commis-
sion, to cause the aggregate capitalization to conform to the
fair value of the property of such corporation as established by
the commission.

4.5 Exception.

The New York law also provides:

Nothing herein contained shall prohibit the commission from giving its consent to the issue of bonds, notes or other evidence of indebtedness for the reimbursement of moneys heretofore actually expended from income for any of the aforesaid purposes, except maintenance of service and replacements, prior to five years next preceding the filing of an application therefor, if in the judgment of the commission such consent should be granted; provided application for such consent shall be made prior to January 1, 1912. . . .-N. Y. Cons. Laws, Ch. 48, Sec. 55.

This provision is also in effect in Missouri and Ohio.

4.6 Wisconsin:

The purposes for which the commission may authorize the issuance by public service corporations of stocks, certificates of stock, bonds, notes, or other evidences of indebtedness, follow:

(1) For organization expenses and all other expenses reasonably required in connection with the financing and constructing of its property.

(2) For the construction, acquisition, extension or improvement of its plant, distributing system or facilities, or for the improvement of its service.

(3) For the discharge or refunding of its legal obligations.

(4) For so increasing the total amount of its stocks, certificates of stock, bonds, notes and other evidences of indebtedness, where such total is less than the value of its property, as found by the commission, as to equal or more nearly equal such value.

(5) In case of railroad corporations

for the purchase

or construction of any railroad which it may be legally empowered to purchase or construct; for additions to, or improvements of, its railroad or property; for additional equipments which may be necessary in the operation of its railroad; for real estate which may be needed by such corporation for railway purposes; and for the purchase, construction, and equipment of any extension, branch, or addition to any railroad, the capital stock of which is owned or held in trust for said corporation.

However, no such corporation shall issue any stocks or certificates of stock for any purpose which is not properly chargeable