Section 129. Approval of securities

A common carrier existing, or hereafter
  incorporated,  under  or by virtue of the laws of the state of New York,
  may issue stocks,  bonds,  notes  or  other  evidences  of  indebtedness
  payable at periods of more than twelve months after the date thereof, or
  a  receiver  of such a corporation, if duly authorized by law, may issue
  receiver's certificates, when necessary for the acquisition of property,
  the  construction,  completion,  extension   or   improvement   of   its
  facilities,  or for the improvement or maintenance of its service or for
  the discharge  or  lawful  refunding  of  its  obligations  or  for  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  evidences  of
  indebtedness of such corporation, within five years next  prior  to  the
  filing  of  an  application  with  the  commissioner  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 expenditure in such manner as  to
  enable  the  commissioner  to ascertain the amount of moneys so expended
  and the purposes for which such expenditure was made; provided  and  not
  otherwise  that  there  shall have been secured from the commissioner an
  order authorizing such issue, and the amount  thereof  and  stating  the
  purposes  to  which the issue or proceeds thereof are to be applied, and
  that, in the opinion of the commissioner, the money, property  or  labor
  to  be  procured or paid for by the issue of such stock, bonds, notes or
  other evidences of indebtedness is or has been reasonably  required  for
  the  purposes  specified  in  the  order,  and  that except as otherwise
  permitted in the order in the case of bonds, notes and  other  evidences
  of  indebtedness,  such purposes are not in whole or in part, reasonably
  chargeable to operating expenses or to income; but this provision  shall
  not  apply  to  any  lawful  issue of stock, to the lawful execution and
  delivery of any mortgage or to the lawful  issue  of  bonds  thereunder,
  which   shall   have  been  duly  approved  by  the  board  of  railroad
  commissioners before July first, nineteen hundred seven.  Stock  may  be
  issued  to  stockholders  as  a stock dividend provided that there shall
  have been secured from the commissioner an order authorizing such  issue
  and  a  transfer  of surplus to capital in an amount equal to the par or
  stated value of the stock so authorized and stating that a sum equal  to
  the amount to be so transferred was expended for the purposes enumerated
  in  this  section.  The  issue  of  stocks,  bonds or other evidences of
  indebtedness, within the meaning of this section, shall include the sale
  by any such corporation of any  such  securities  previously  issued  in
  compliance  with  this  section  and  subsequently  reacquired  by  such
  corporation, provided, however, for good cause  shown  the  commissioner
  may  exempt from the restriction hereof stocks, bonds or other evidences
  of indebtedness. For the purpose of enabling him to determine whether he
  should issue such an order, the commissioner shall make such inquiry  or
  investigation,  hold  such  hearings  and examine such witnesses, books,
  papers, documents or contracts as he may deem of importance in  enabling
  him  to  reach a determination.   Such corporation shall not without the
  consent of the commissioner apply said issue or any proceeds thereof  to
  any  purpose  not specified in such order. Such common carrier may issue
  notes for proper corporate purposes and not in violation of law, 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  evidences  of
  indebtedness  running for more than twelve months without the consent of
  the commissioner. The commissioner shall have  power  to  require  every
  such carrier to file with the commissioner after the issuance of stocks,

  bonds,  notes or other evidences of indebtedness, issued with or without
  the approval of the commissioner as herein provided, a  notice  of  such
  transaction  in  such  form as the commissioner may prescribe. Provided,
  however,  that  the  commissioner  shall  have no power to authorize the
  capitalization of any franchise to be a corporation nor 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  to  a  political
  subdivision thereof as the consideration for the grant of such franchise
  or  right,  nor  to  authorize  the  issuance  of  any  stocks  or other
  securities for any purposes other than those enumerated in this section;
  nor shall the capital stock, bonds and other  evidences  of  debt  of  a
  corporation  formed  by the merger or consolidation of two or more other
  corporations, exceed the sum of  the  capital  stock,  bonds  and  other
  evidences  of debt 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  consolidation  or lease be capitalized in the
  stock of any corporation whatever; nor shall any  corporation  hereafter
  issue any bonds against or as a lien upon any contract for consolidation
  or merger.