The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1860-09-14

nave Deen enarged-ltS floating debt paid
oh-its working capabilities extended and eff
ficient and its dealings are conducted in cash.
The sum standing to the credit of profit and loss by the
Annual Report of 1855 So 49 05 by that of 1856
it S. 1888 75 in of 1857 was 81 3d.
in that of 1885, $5052 27507 and in that of 1859 So 92
81 by the last Report of the following half year it
appears to have increased to SO 527 sos. 49,
At the time this dividend declared the surplus pro
fits stated in the Annual Report to be s., ,529
The subsequent Reports show that this surplus has
increased to more than s6000,000.
few extracts from the report of Mr. latrobe, the en-
gneer of the Road taken from the record in the case of
the City Of Baltimore as. Baltimore and Ohio Railroad
Company, will show that these investments of the net
earnings in the construction of the road have increased
its intrisic value very greatly, and that nominal
capital Road does not represent its real value
IN 1855 he says the aggregate profits of the company
up to that time will appear to have been S35S9S5, of
winch 81 has been paid in dividends and 50 500
O6 expended in the work. whose value has been ncreas
ca fully to that amount, that the nominal capital
067. VI S'''O''
In 1919 the balance cf net profits had increased to
So O9663S and this balance increases up to 1852 to
O99 54l 80
These statements show regular increase in the value
of the property of the Company beyond its nominal cap
tai, and would seem fully to justify this extra div-
dend which about half the amount of this increased
capital
After as full an examination of this branch of the sub
ject as we have been able to besow upon it, agree
with the counsel for the City of Baltimore and of the
private stakeholder complanants, that the ability of the
company to comply with its proposition in reference to
this dividend, without difficulty, must be regarded as
satisfactorily shown.
Is,
Railroad Company, at the time this dividend de-
cared had, in point of fact made these surplus net
profits, and applied them to the construction of the
Road.
In opinion, the testimony and exhibits filed in the
case Of the City of Baltimore the Railroad Company
clearly show that for than twenty years separate
and distinct accounts have been kept by the Railroad
Company these net profits expended in construction
and that their aggregate amonnt as stated in the Th
teth Annual Report the stockholders in the year 1856
was So 529 S07 75that this had been accumula
ting in each year, with few exceptions since 1882
progressive ratio that the fund.- the time test
mony of Mr. Atkinson, the Secretary, given, ex-
ceeded Sc 100000.
In view of this evidence unnecessary to RELY upon
the report made by Committee of the Directors before
the dividend declared, which stated the Of
these profits at that time to exceed 100000 Nor upon
the argument that these various sums thus temporarily
withheld from the stockholders, and which, under the de-
been borrowed by the Railroad Company would bear in
erest for many years. and that this principal and inter
est would greatly exceed the aggregate amount estab
ished by the proof.
In opinion this regular reports of the Di
rectors of the Company furnish full proof to establish the
fact that these net surplus earnings actually
and applied to the purposes of construction at least
the amount claimed and that after leaving large
gin to meet the amount of the DISPUTED items which
those opposed the dividend insist improperly
credited to construction there yet has been effected su
cient increase of capital to justify the declaration of
dividend to the amount proposed In fact, the bill filed
by the city of baltimore charges that surplus net profits
amounting in the whole to very large of money,
have been earned by the Company from the year 1880
the time of filing the BILL and that portion of these
plus net profits making in the three millions of
dollars, had been consumed in construction"
The next question for consideration is did the Railroad
Company, from time to time, when applying these net
surplus profits to construction declare with sufficient dis
tinctneSs their intention to make division of these
pr oits so applied at subsequent time among the
stockholders whether these have been alb
sorbed in the construction of the Road without any such
declaration of purpose to divide them hereafter that
there was really no surplus in existence which could
rightfully be divided by the Company?
In opinion the proofs the Record before referred
to- clearly show that such an Intention had been ayowed
by the Company for long series years with more
less prominence, in their official communications to the
stockholders
ass36 when the subscriptions to the stock
the Main Stem had not been all paid up the directors
commended that the shares of the stockholders in the
then net earnings should be credited upon their respective
subscriptions as so much cash paid thereon and that the
stockholders of the Washington Branch Road who had
entirely paid up their subscriptions should receive their
shares of these net earnings in stock to be issued to
them.
In the twentieth report of the President and Directors
to the stockh olders made in s47 they say 1.-THE
time has now arrived when the Board should make some
definite arrangement for the reimbursement to the stock
holders of the money taken from the annual revenue and
applied to the purchase of power and machinery
count Of the transfer of coal, &c"
In the twenty third report lin S49) it is stated to hi
the policy of the Company that the net earnings should
be applied to the extension Of the road and the increase
of the capital and for this increase stock should b
delivered to the stockholders.
In the twentysixth report CS52) they say that they
entertained the idea of using the dividends
full representation il the stock of the Company, which
in the future, more valuable than money and
refer the report for 1850 in which is said that
the period approaching to distribute among the
stockholders extra dividend to the full extent of the
net earnings which from time to time had been appro
priated to construction.
We need not follow up this by further extracts
from the testimony, manifestng the same intention upon
the the company to the present time expressed
by all the different administrations which in turn have
controlled It's affairs.
1he CGurt OF Appeals IN isl IN their opinion in the
Railroad Company, Gill, 377 say:
me Poaro @l directors temporarily applied the re,
Venues OIL tne company towards me cGnsummatlon OF
.i I'M. o'SeGr Iaie Vi 'e hoau ntSi9nhs at me
lint, oSeEer, Nv M 70 te sLocknoders Tor suci
asrtnson h ,a iia e. 1 "b Vi ~ 'e company as n5u
tba Gecassor nH 1 No company 10 prov
cnr,rnence and 90 a,r,t on tbe coo rods - " ~ ~ |"
On nae 3S1 oF the same volume thrv cav.
.,Jf ds;,,n,r ~ ,naia diIr;JomI oS a. an. ,et
ST., - US W - MN an a ~ VI suelu S. t'c he' Po'ts
tu nav % useu @ mem & iU | W p oes 81 ol tie ~
ors as - of,,n,Ic,n, ,J a;,,,i - In 1, ,,s ~ @ ~ III @ u
report which is in evidence before the Court va tii
there ;s nottin,, T., ~ ,ho.t. ~ - II 49, a,
n3tnng IN me charter when would prohibit the
~ tbr So % j nm, VIC ouis mus u>eu ny lGn
taniro5 h go .t: ma "''e Vi ''e 'c1 ouG 10 De
fnTna1 th" ,ro M ynrs oG h. A. e,,. ,,,
a, y. 80 VIZ ls eo 5 guy, ,e9 Dy the otate oil Maryland IN
iad te net re,a1ras n yrrnoSas ~ nau , 5P
sisted that the Comnanv had no riebt to mali sc an,i
cation bnt was bonnd to nav the entire net revenna 70
| the stock boIdnrs in tha form Of 6ivi5pnds -
The onnion in tbn case shows thot the Court tbip b
intention to reimburse the sockboder for this
at;on nF La at nrnfts tLo and Lorotrora oioJ 70
ao oi te nes pros' teh anu e'esGott ~; appeu 10
. 3 a, W. va" >. ~ -. @ i. ~ - sI , y" t
a tpV ~ anu , Ina, ~ !" q; oa F &c a. "s Ia" ovI s ~
stantn b acc"Ilnared viii serarate Trde or ]
~ h w. W y. .i .iI, ,t w" a 'eP"'''e P''"so Vi t'A
T. 49,, a;n;o ~ ,a,rai r a. IN f,,,,,or,,
~ ti Ia oI oio PM III e sG g I a. 's 1917 ~ | iiy Py
I'sn - - 5 tfo; 80 - =, - h,rsa ~ ~ ay ~, r ~
tbn P tS m ~ a,IIiioations I 10 Of ~ oat @ ,st. - @ %
sboid ad ,b fettIaJ ns seiiat @ iEstoti % F
lou'G tesu ms u. .e'eu S me o1
I " o 80 81 ~ a. u NOV i 80
pS ppSiu w S ~ o @ VI ~ isH appearing III '"ei' Pi0
e IIe 80 y. -, 80 ~ a., 81. Al, =: ,,.,,.o.: e ......:.,
t IL moHiI seem 'a inns F is o,
Sid rs oS S h 81 nv i' a toVi r 49, W JGstS @ 90 %
m 0ot H. et S ~ % ~; " = % - o as -. W , S !, ~ 49, AZ a.
h'tion ~ tboroa s1or - ~ tLa So, ~ " q J;,;dand NH
The fact that the Comnany nnon civ nreviors occa
sion htan 1sts and is5S dcIarsd tsnart;ai aTtpa
Jvi5snJs;, ort of tbe at roGis arnIeJ 70 cnst,ctior
and hat oil tbe inc,,din tbo Stoto an6
~ az =, . a." ''e ~ ',, y, oi
" " anoe, t0eisu mn P'Iis Vi tlese vi "
IN 9hey so'P vi stooh, as tney "eIe e1fealy ue-
this sattIad o,ic or th a. S,ion &c aid p t bt he
ragarded Inv the nirector on annrovoI of tbs noIicv
and an encouragement to declare the present extra
dividend, IN the absence OF any act dlsappfoHg her
course ..- -,
Assuming then, that tne surplus net pEohts 10 tle
amount cIaineG nave pGen inaue oy tne COMPANY anu
tat they nave Deen wlthheu from te tockhoders ana
expended in the extension Oh the Road &c &C. with the
intention on the part OF e company 70 reimburse thesc
amounts 10 the stockosdefs the queson remains 10 De
considered whether the Company under its charter have
the power TO make such an extra dividend as tat de
clared oy the resolution OF the ilth DECEMBER 1900
In the case oil the CITY OF Baltimore Us; baltimore anu
oho ltaroad company, Gll, page Z9o, the court oil
Is matter OF pooriety ana history Ihat IN cha
gIng sne baitihVIe ore anu Hio aI1au "oPas t @
Legislature anu the People vi lahu he
completion OF the work as great Slate oJect, tenulhS
emnenty 10 promote the 1nture Wealh ana prosperity o
anu paLtlcuiIIy o the Nly ol pdlt!oie a ~
70 contribute 10 inc PeIlnaiehce ol Tue Clloh Vi o
States Ihey also were duly senslDe that thlS gguG
and patriotic undertaking. could not be accomplished
put at seat eA anu iu VI PeoitSy "a ioss W Us
ertaheIs: ZAs i m ~ :, @ @ ~ e i:
they were Wiling 10 coier on ~ every immunity, Pfvl
iese anu exemption Woh coulo IeaSohapIy De Iequleu
ana tehd 10 lts compGtloh: ,
I'm eXpounding, therefore, those provisions Of the