CORPORATIONS 977

required authorization for any of the aforesaid purposes, except main-
tenance of service and except replacements, in cases where the applicant
shall have kept its accounts and vouchers of such expenditures in such man-
ner as to enable the Commission to ascertain the amount of moneys so
expended and the purposes for which such expenditure was made, or when
necessary or desirable, in the discretion of the 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 396; provided, and not otherwise, that there shall have been se-
cured from the Commission an order authorizing 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 stock, bonds, notes or other evi-
dences of indebtedness, is reasonably required for the said purposes of the
corporation. For the purpose of enabling it to determine whether or not it
should issue such an order, the Commission shall make such inquiry or
investigation, hold such hearings and examine such witnesses, books,
papers, documents or contracts as it may deem of importance in enabling
it to reach a determination. Such gas corporation or electrical corporation
may issue notes, for proper corporate purposes, and not in violation of any
provision of this sub-title 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 Commission; provided, however, the Commis-
sion shall have no power to authorize the capitalization of any franchise
to be a corporation, or to authorize the capitalization of any franchise or
the 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 any political sub-division thereof as the consideration, for the
grants of such franchise or right. Nor shall the capital stock of a corpora-
tion formed by the merger or consolidation of two or more other corpora-
tions, exceed the sum of the capital stock of the corporations so consolidated,
at par value thereof, or such sum and any additional sum actually paid in
cash, nor shall any contract for consolidation or lease be capitalized in the
stock of any corporation whatever, nor shall any corporation hereafter issue
any bonds against a lien upon any contract for consolidation or merger.

Jurisdiction of commission begins when company starts to use its granted powers and
extends to activities affecting public interest. Commission has no jurisdiction over sub-
stitution of stock of no par value for par stock. Issue of unissued shares, within this
section. This section prospective, but not exclusive, in its application. Pub. Serv.
Commn, v. Consol. Gas Co., 148 Md. 96.

Cited but not construed in Potomac Ed. Co. v. Pub. Serv. Commn., 165 Md. 472.

See notes to see. 345, and to art. 3, sec. 33, of Constitution.

An. Code, 1924, sec. 393. 1912, sec. 448A. 1914, ch. 445, sec. 34 1/2.

404. Subject in every respect to the authority and supervision con-
ferred upon the Commission by the next preceding Section, a gas corpora-
tion or electrical corporation organized or existing or hereafter incorpor-
ated under or by virtue of the laws of the State of Maryland, may issue
stocks, bonds, notes or other evidences of indebtedness, payable at periods
of more than twelve months after the date thereof, when necessary for the
capitalization of its earnings expended prior to the first day of April,
nineteen hundred and fourteen, in the acquisition of property, the con-
struction, completion, extension, maintenance or improvement of its facili-
ties; provided that the applicant shall have kept its accounts and vouch-