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

made party, the examination extended to all these
causes. After full consideration of the entire subject,
and free interchange of opinion with associates,
Messrs Price Poe, proceed to lay before your
EScellency condensed statement of the matter in con-
troverSy.
At general meeting of the stockholders of the Bali
more and Ohio Railroad Company, held in October 1856,
the President and Directors submitted their Annual Re
port in which they stated that the profit and loss account
OF the Company exhibited a surplus of $3.833 07175
presenting the undivided profits of the road and that the
amount of these undivided profits after the payment of
the ordinary proposed dividend would be S 59 75
resolution was then passed by the meeting requesting
the President and Directors to made provision refund
ing to the stockholders the of the earnings
the Company, which, from time to time had with
held from distribution and expended in objects of cap
tai. &c.
The Board of Directors accordingly appointed com.
mtee of five of their number take charge of the sub
ject and this Committee the first of December 1856
made full report, suggesting corrections of the profit
and loss account by which the surplus net earnings
enlarged to 50, particularly the
eal sums which had from time to time been applied to
construction, &c, and recommending that the Board
should declare extra dividend of these net profits
AT meeting of the Directors, held afterwards, this Re-
port was made the subject of earnest dscusson and the
resolution declaring an extra dividend of so per cent
WGh mas gwen rise to all this litigation passed by
the Board of Directors in the following form;
" Whereas There has been appropriated by the Balt-
more and ONO Railroad Company, from time to time,
the 900 900 and upwards net earnings Of
the Main Stem of the Road to the purposes consruc
ton with the intention, in conformity with the practice
of The Company of paying the to the Stockholders
of the Company in the shape of dividend, at such
time as they may deem judicious; therefore, be it
"ResolUed, That dividend of thirty per cent
be declared the stock of the Company to paid on
after the 18th day January next to all stockholders
owning stock the 22d day of December 1856 in cert
Gates of Indebtedness bearing interest from the ls day of
June, 1857 Of six per cent per annum, payable half
year, until the first day of june 1862 inclusive, after
which the said certificates of Indebtedness
verted into the stock of the Company par.'
At the meeting which passed this resolution twenty
nine Directors presentony of the Board being
whole Board voted for the resolution OF these two were
Directors the part of the State three the part
the city, and the remaining twelve chosen by the
piivate stockholders
1t is also worthy of remark that Notwithstanding the
changes which have since taken place in the Board of
Directors and the violent and continuous opposition
when TINS resolution has encountercd it remains
lHaled to this time
Four suits have been instituted by Bills of Complaint
10 enn the Railroad Company from proceeding to exc
@ es resoiuton and for general relief in this matter
oi the extra dividend in the following order viz:
lst, BY the Iity of Baltimore in January 1857 in the
circuit Court for the city Of Baltimore.
I'd. by the State of Maryland, in March, 1857 in the
Sd BY William E. Pearse and Charles sennckson, of
New YORK in january 1850 in the Circuit Court of the
4h. BY Geo. F. Eckey of New Jersey in March 1860,
in the Circuit Court for Baltimore citv
lnjunctons granted by the Judge of the Circuit
Court for the City of Baltimore in the three cases pend
ing in that Court and these nunctons still force
Two other suits were instituted in the last named Court
10 compel the specific execution of this resolution by the
railroad Company-one by the City of Wheeling by bill
filed 10th March, 1S57-the other by Andrew A. Gregg
and others private stockholders which the State and
City of Baltimore made parties The former of
these suits was subsequently, dismissed the latter is still
pending.
To the bill filed by the city of Baltimore the Railroad
Company filed their answer in March, 1857 maintaining
that the extra dividend legally decared-the surplus
profits duly earned-tha this declaration of extra
dividend was confOrmabe to the practice of the Com
pany on six previous occasions-that the power of
the Company to make such dividends had been
affirmed by the opinion of the Court of Appeals
and sanctioned by the City, in having received and
sold its previous extra dividends; and denying gene
rally the allegations of the BILL and the legal propo-
stons therein advanced Afterwards change took place
in the Board of Directors of the Company the new
Board mad an amended answer filed in May 1857 oppos
ing, and inconsistent with the original answer denying
the correctness of the facts and law forth in it. and
mitting generally the allegations of the BILL that the eX
ira dividend made without authority that there
were no such surplus earnings out of which it could be
paid, &c.
To the several bills filed by the State of MARYLAND by
the city of Wheeling and by Andrew A. Gregg and Others
the Railroad Company under the direction this new
Board filed their separate answers denying that any
gal dividend had been declared and resisting
generally all those who claim under it-these answers
conforming to the amended answer filed to the bill of the
city of Baltimore.
To the bills of George F Eckey and William A. Pearse
and Others no answers have yet been filed by the Com
In the of the City of Baltimore against the Rail
road Company, in the Circuit Court of the city of Balt
more, John A. Gregg and Others private stockholders
filed petition praying to be allowed to in as de-
PENDANTS in that and insisting upon the execution
of the resolutions declaring the eX ira dividend The
Court refused to grant the prayer this petition an
this decision sustained appeal by the Court of
Appeals On this appeal however the Court EXPRESSED
the opinion that all interested in this extra dividend must
be made parties to these proceedings before final decree
binding upon all such parties be made Ii Maryland
Reports, page SOC
Afterwards, second change made in the Board of
Directors of the Railroad Company and meeting of
the Board thus reorganized held in December last
other resolutions adopted requiring the counsel of
the Company amend all their answers before described
as opposing the extra dividend and to file other amended
answers Tor the company maintaining heriegal authority
to declare the dividend the fully jus
paid the stockholders. These answers however
have not vet been filed.
e;,ta.
of these cases, which need not be particularly noticed
here as they do not at present materially bear upon
main points at issue.
1t will thus be seen that this litigation has been pend
ing in the Courts than three years-tha of the
causes has been taken up to the Court of Appeals
lateral point decided there by divided Court the
cause remanded for further proceedngs-that it has
spread itself over five separate causes with numerous
parties pending in two Courts of distinct jurisdiction
and that three injunctons, prohibiting the further
ton OF the resolution, still pending
Some of these have given rise many doubtful
questions of pleading and practice, which must be set
tied before the questions of law and fact really of mpor
ance as bearing upon the issues between the parties
be brought before the COURTS and each of these questions
of course may be the subject of an appeal.
To show how little progress has been made towards
hna settlement of this litigation, it is sufficient state
hat not one OF the questions flaw and fact originally
at issue in these causes which the abest counsel
in the State have heretofore given different opinions
been decided even by the courts where the suits orgna
ted In view of the present condition OF this controversy
after three years spent in litigation, unable to
predict, with probability of correctness the period
when the final decision of the real points involved may
be expected, when the first bill was filed In
deed it may be fairly stated that the complicated and
conflicting proceedings in these causes, have materially
added to the intrinsic difficulties Of the question orig
nay involved in the causes
Your Excellency has requested present our views
as to the proprety of accepting, behalf of the
State proposition which has been submitted for your
approval by the parties to these suits, viz that you
should unite with them in dismssing these suits, and
allow the extra dividend to be paid
in the manner suggested in the correspondence bew
the President of the Company and the Chairman of the
Committee of Finance Of the City Council of Baltimore
The examination of this subject has lei into an ex
tensVe investigation of the general affairs and condition
of the Railroad Company, and propose to say few
words thispoint before proceeding to the consdera-
We understand that the cities Baltimore and Wheel
ing and the private stockholders who compainants
in the of GreggEet al the Railroad Company have
agreed to unite in this amicabe adjustment but that the
private stockholders in the other opposed
to it and wish to continue the litigation We are not in
formed what is the position of the other stockholders not
parties to these SUITS to the proposed mode of adjust
men but all the Directors of the private stockholders
voted for the declaration Of the extra dividend we are
justified in concluding that majority of these stockhold
would favor the adjustment.
The extent of interest of the respective parties affirming
and opposing this adjustment may be thus stated:
Those represented to be arorabet to the proposed adjust
neRt:
The city of Baltimore owning of stock k.. IS 500 900
The city of Wheeling. ing.................... 5OOO 900
Private Stockholders. ACKNOWLEDGEMENTS. 1851 900
Contributing together..... ............ $526l 900
Being more than half of the stock Except
ing the preferred Stock.).
If to this be added the States Stock. Gs5 600
And the States preferred Stock k........... 100000
The amount held by these parties will then
amount s., ,el7, 500
Making more than two-thrds of all the Stock,
including the preferred Stock.
To this sum should be added the loan of the
Observation-Disclosures. 5000 900
Making the interest of those favoring the ad-
justment ....................... s13 3947 800
Those private stockholders who are known to
oppose the adjustment, own about thirty
shares of stock, amounting to about. So 600
While the value of the stock held by those pri-
vate stockholders who have taken
public position upon the subject, be
fore referred to, represent stock to the
amount of; 100000
Assuming that all these shares should be count
ed as hostile to settlement, those opposed
would hold in stock. 4C03000
Against Sl39I75O
Assuming that these parties all favorable to the
settlement, those opposed would stand S3OO0-tO S17,
947 500 And assuming that they equally divided in
opinion the question, the figures would be $2003,
O0O against SIS 947 500.
1t certainly appears to be unnatural state of affairs
that this great work of internal improv gnating
in Maryland genius and enterprise created and noushed
by Maryland legislation and constructed with its wealth
and the wealth of its people, should be engaged in eXpen
Sve and veXaous litigation with the State and city
which have given existence and relieved it from ap
parently ineXricable difficulties with berality which
has at times sraitened their resources, and i'm
paired their credit; and the other hand,
would suppose that this Gigantic and patriotic"
enterprise, it is termed by the Court of Appeals,
stretching its extended into the richest and
populous regions of other States before inaccessible
Maryland markets. and pouring their valuable produc
.ions to the extent of millions into the commercial
metropolis of the State would always active
operation of those so essentially interested in its
cess; and that nothing less than great overruling
necessity would permit its most efficient faculties ex
tensve commercial enterprise to be impaired by
of its chief corporators and yet find this controversy
in progress which certainly exercising an unfavorabe
efap he cifU of PaIt