Annual Address by the President. 
9 
is now, and shall continue to be vested in the State government, to he 
exercised according to the provisions of this and other laws.” 
It provides: "That hereafter no bonds or other indebtedness shall be 
increased or issned or executed by any authority whatsoever, and secured 
by lien or mortgage on any railroad or part of railroad, or the franchises 
or property appurtenant or belonging thereto, over or above the reasona- 
ble value of said railroad property ; provided, that in case of emergency, 
on conclusive proof shown by the company to the Railroad Commission 
that public interests or the preservation of the property demand it, the 
said Commission may. permit said bonds, together with the stock in the 
aggregate, to be executed to an amount not more than 50 per cent over 
the value of said property.” 
The execution of the provisions of the Stock and Bond law was placed 
under the jurisdiction of the Railroad Commission. The basis for valua- 
tion, to be adopted, was the actual physical value of the property or 
practically the cost of its reproduction at the time of its valuation, 
allowing current prices for labor, material and real estate. This basis 
was laid down by the statute in the following language, Article 4584f: 
"Should any company or corporation authorized to construct, own or 
operate a railroad in this State desire to issue bonds or other indebted- 
ness, to be secured by lien or other mortgage on its franchises and prop- 
erty, in advance of the completion of the said railroad, it shall make 
application to and first procure the consent of the Railroad Commission 
thereto. In said application it shall exhibit to the Commission its con- 
tract with the construction company, if it have any; the profile of its 
completed road or part of road, the evidence of its right of way, depot 
grounds, terminal facilities; the extent and value of work done or in 
process of completion; the amount of property received; the amount of 
stock subscribed and the amount paid in; and all other necessary facts 
showing the value of the franchises and property proposed as security 
for said contemplated debts. If, on investigation, the Commission is 
satisfied that the company is acting in good faith, and that the contract 
with the construction company is reasonable and fair to the public, then 
it shall authorize the execution of said indebtedness and lien to the 
extent necessary for the demands of the work, at no time to be more than 
50 per cent over the value of the whole property and franchises.” 
In pursuance of the law, the Commission has issued rules and regula- 
tions controlling it in the matter of issuance and registration of railroad 
stocks and bonds which, among other things, requires that there must 
be filed with an application for issuance of stocks or bonds, the maps 
and profiles of the road, the estimate of its cost, the deeds, contracts and 
other evidence of right of way, depot and terminal grounds, all contracts 
for construction, and all plans and specifications for construction and 
