832 ARTICLE 23.

Commission, to cause the aggregate capitalization to conform to the fair
value of the property of such corporation as established by the Commission
pursuant to the provisions of Section 385; provided, and not otherwise,
that there shall have been secured from the Commission an order author-
izing such issue, and the amount thereof, and stating that, in the opinion of
the Commission, the use of the capital to be secured by. the issue of such
stocks, bonds or other evidence of indebtedness is reasonably required, for
the said purposes of the common carrier, railroad corporation, street rail-
road corporation, or such corporations, but this provision shall not apply to
any lawful issue of stock, to the lawful execution and delivery of any mort-
gage, or to the lawful issue of bonds thereunder, before the time when this
sub-title becomes a law. For the purpose of enabling it to determine whether
it should issue such an order the Commission shall make inquiry or investi-
gation, hold such hearings, and examine such witnesses, books, papers, docu-
ments or contracts as it may deem of importance in enabling it to reach a
determination. Such common carrier may issue notes for proper corporate
purposes, and not in violation of any provision of this or any other Act,
payable at periods of not more than twelve months, without such consent,
but no such notes shall in whole or in part, directly or indirectly, be
refunded by any issue of stock or bonds, or by any evidence of indebtedness
running for more than twelve months, without the consent of the Commis-
sion; provided, however, that the Commission shall have no power to
authorize the capitalization of any franchise to be a corporation or to author-
ize the capitalization of any franchise or right to own, operate or enjoy any
franchise whatsoever in excess of the amount (exclusive of any tax or
annual charge) actually paid to the State or to a political sub-division
thereof as a consideration for the grant of such franchise or right; nor shall
the capital stock of corporations, formed by the merger or consolidation of
two or more other corporations, exceed the sum of the capital stock of the
corporations so consolidated, at the par value thereof, or such sum and any
additional sum actually paid in cash; nor shall any contract for considera-
tion or lease be capitalized in the stock of any corporation whatever; nor
shall any corporation hereafter issue any bonds, against or as lien upon any
contract for consolidation or merger.

Control of public service commission over a railroad is limited to latter's opera-
tions within this state. Commission may require statements of the facts relating to
issues of stocks, bonds, etc., so that it may be determined whether such issue is
bona fide and for value; where the enterprise is one to be conducted wholly within
the state, commission may sanction or disapprove proposition. While an interstate
carrier may be made subject to control of each state as to matters affecting the
operations of company in such state, beyond that, state legislation is powerless.
The commission has no supervisory powers over expenditures of money in other
states, nor the apportionment of expenditures of a railroad's monies as between dif-
ferent states, nor can it pass upon wisdom of construction work to be performed in
other states; neither may a corps of engineers and inspectors be maintained by
the commission in other states. P. S. C. cannot (in the absence of fraud) override
the officers of the corporation in the management of its affairs or in fixing of prices
of its securities. Police power. Baltimore and Ohio Railroad Company. Laird v.
B. & O. R. R. Co., 121 Md. 181.

As to the issue of stocks, bonds, etc., see secs. 211 and 234. As to the consolida-
tion of corporations, see secs. 33, 218 and 235.