The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1860-09-27
THE EXTRA DIVIDEND.

against the Baltimore and Ohio Railroad Company,
seem to render it proper that all the facts connect
ed with that remarkable transaction should be laid
before the public. The interest you have taken in
Calculating the subject induces me to ask you to
publish the following recital
On the 10th of March, 1857, the State of Mary
land at the instance of the Directors the part of
the State, filed bill in the Circuit Court for the
City OF Baltimore TO forbid the delivery of what is
sufficiently described for public apprehension as
the Extra Dividend. The counsel employed by the
Governor were Mr.. Nelson, Mr.. Mcmahon and my
self The bill was carefully prepared, received the
deliberate sanction of all the counsel and Of the
Governor, and Judge krebs ordered the injunc-
ton
On the 18th of Nav, the Railroad Company filed
an answer, under oath, in which it admitted, in
substance, that it had not in fact, earned the divi
dend declared; and that, even if net earnings to
the amount of the dividend had been made, the
Company could not lawfully divide them. they
had been all used in the necessary and lawful out
lays of the Company. No motion was ever made
to dissolve the injunction, nor could the Railroad
Company be induced to take any steps to bring the
cause to trial. On the l4th of December, 1859,
Mr.. Garrett, the President of the Railroad Compa-
ny, called the attention of the Board to this and
the other suits involving the legality of the divi
dend, and made the following remarks
at behoores as, the legal Of the Board by
lChoa that dirdend declared to act straighfor
,card and manly part and to attend in corporate
acty, the acts Of the cOrpo alton achich yc represent
If the dividend declared in 1856 illegal, the State
of Maryland and the city Of Baltimore cannot td1 to o6
ousy we may defend that dividend lift was legal those
to whom this Company has awarded it, have right to
expect that the Company take all which may be
necessary to maintain its award.
In pursuance of this object submit to the Board the
following resr buttons for its adoption:
ReSored That the regular counsel for this Company be
and he is hereby instructed appear for this Company
in the suits against it instituted by the State of Maryland
and by the city of Baltimore which commenced in the
Circuit Court for Baltimore city on the 10th day OF Janu
ary 1857 and the 10th day of March, 1857 and that he
is hereby instructed to take exclusive charge said
for this Company; and that all other appoin of
counsel therein be and the same hereby revoked
And be further reSolced That the said counsel for this
Company, when he has appeared aforesaid in said
shall ask leave of the Court amend the amended
filed In the of the Mayor and City Council of
Baltimore aga the Baltimore and Ohio Railroad Com
pany and shall when such leave obtained, prepare
identical with that filed for this Company in the
said the 2st January 1857. hereabous the
said answer being the original answer which veri
fled by the oath of Chauncy Brooks the late President of
this Company.
Be at further reso1red That the said counsel for this
Company when he has appeared aforesaid in said SUITS
shall ask leave of the Court ameLd the filed in
the of the State Of Maryland the Baltimore and
Ohio Railroad Company, and SHALL when such leave is
obtained prepare such answer shall conform to the an
ordered to be prepared in the last resolution in the
of the City of Baltimore the Baltimore AMI Ohio
| Be 1t further Tesolced That these amended
shall be verified by the cath of the President of this Com
pany."
1t was reasonable to expect that the adoption of
the foregoing resolutions would lead to some ener
getic measure on the part of the Railroad Compa-
NY and did not hesitate to urge the counsel of the
Company, by repeated applications, to file his petit
| ton for leave to amend the bill About the Goth of
January Mr.. Nelson died. The condition of Mr.
McMahon's health had been such, for long time,
that he took active part in his profession, and it
had been understood, at the time of his appoint
| ment, that he was only expected to argue the
| cause in the Court of Appeals. The responsibility
of the case, therefore, devolved upon Finding
| it impossible to induce the Railroad Company, the
nominal defendants, to proceed in the cause, APP
piled to Judge krebs, on the 10Th of May, for leave
amend III, j
| Johns Hopkins, VIM. A. Hack and others, large
holders of the dividend, parties to the suit and
summoned them to appear and answer by the first
Monday of June.
1t was now currently reported that the Governor
would be applied to to dismiss the BILL and felt it
to be my duty to ascertain by personal interview
whether might count upon his operation or not.
| accordingly waited upon him at Annapolis-ap-
prsed him of the rumors that were in circulation,
and received from him the most positive assurance
that he would not interfere. He declared, in the
most unequivocal manner, his approval of the suit
and his determination to have the questions in
volved in it decided by the Courts On the second
of June addressed to him the following communi-
cation:-
Ny Dear Sr:-The Baltimore and Ohio Railroad Com.
pany has shown manfeSty its disposition to avoid the
la or the questions involved IN the suit broughtby
the State to restrain the delivery of the thirty per
cent. dividend declared in December, 1856 that have
felt it to be duty to take all possible steps to bring
to conclusion You are aware that the Court of APP
peaS carried up by of the stockholders,
have decided that, before finally passing upon the vadi
ty of the dividend it would be proper to ma Ike the stock
holders parties to the and acting upon this sugges
ton have caused all the stockholders who parties
appeal to made parties defendants in the case
OF the State and have had them summoned to appear and
defend the suit
This process is made returnabe on Monday next when
we shall have opportunity of testing their willingness
to have the questions involved in the suits fairly
determined by the Courts The delay has attended
might if they had chosen have had the heard and
decided two years ago shall insist now upon the
new defendants getting ready for trial submitting
decree perpetuatng the injunction We may, therefore.
look hope, for speedy settlement of this important
question: and for adjudication of the right of corpora
tons to declare dividends of this character
have considered proper to apprse you of the efforts
hope will meet your approval and avail myself of the
occasion to refer to the renewal here of the of
which spoke to you weeks ago, to the intention
OF the Executive to interfere to prevent the injunction
sued out by the State from being tested by final hear
ing have not hesitated the faith of the views
pressed by you to myself and Mr.. at our late visit,
TO speak Of the rumOrs wholly unfounded
With great respect,
Your obedent servant,
His Excellency, the Governor.
To this letter, received the following prompt
reply:
EXECUTIVE CHAMBER,
ANNAPOLIS June 4th, 1860
NELSON Poe, ESQ,
Dear Sir The Governor directs me to acknowledge
the receipt OF letter of the I'd inst and
the you have adopted with the stockholders
his unqualified approval The rnOrS of Executive inter
ference ochout shadow Of foundation The Govern
has not changed his views since his conversation
with you and Mr. -.
Very respectfully, GEO W. JEFFERSON
As had predicted, the stockholders, although
now made parties the suit and invited to vindi-
cate their rights, failed to appear to reply, and
the counsel of the other defendants, the Company,
did not obey the resolution of the Board directing
him to ask leave to amend the answer. On the 18th
of June, received the following communication
from the Executive.
Nelson Poe Esq: -O'
DEAR SIR am directed by the Governor to inform
you that he has this day forwarded to William Price
ESQ., appointment counsel the part of the State
to assist You in the matter of the Baltimore and Ohio
Railroad Extra Dividend in place of the Hon. John Mel
son, deceased The record here shows that Mr. Mcmahon
consented to act as advisory counsel the part of She
State without fee until the reaches the Court APP
peals, when you will have his full assistance You will
therefore consult with Mr. Price; and the Governor feels
assured that in the past future the interests
of the State will be safe in your hands.
Your obedent servant GEO. W. JEFFERSON
On the 18th forwarded the following reply:
BALTIMORE, June 18th 1860
Dear Sir Il have the honor to acknowledge the re-
cept of communication of the 18th inst apprising
me OF the appointment of VIM. Price ESQ., counsel
the part OF the State assist in the matter of the
Batm ore and Ohio Railroad Company Elk ira Dividend
in place of Hon. John Nelson, deceased
1t viii give me pleasure to operate with Mr. Price in
the adoption of the measures necessary to bring this
to speedy trial. The case involves questions of the
highest interest to the public and nothing the inds
position Of the defendants to submit them the decision
of the Courts has prevented them from being decided
two years ago sincerely hope that the health of Mr.
Mcmahon may be far restored enable the State as
you anticipate to have the benefit of his invaluable
sstance in the argument of the in the
peas whose decision will defntvely settle the right of
corporations in Maryland to exercise power suscepti
Bile of abuse that which the injunction in this has
restrained
With the assistance Of Mr. Price ! persuaded the
cause be got ready for hearing before Court of
Appeals at its next December term. The stockholders
whom have made parties defendants the bill and
summoned to plead to it, have not yet appeared although
the summons was returnable on the 4th inst fear that
they do not intend to plead the bill but are
counting upon its dismissal either or hereafter by
the voluntary nterpositon of the Executive As know
from my interviews with your Excellency as well as
from two last communications that expectation
is unounded, shall consider it my duty all pro-
per means to bring the to early hearing in the
City Circuit Court may add that after the most care
full examination of the grounds upon which the nunc
tion is based am satisfied that Judge will pass
decree pepetuang the nu 1con and that the Court Of
Appeals will sustain the decree.
am, with great respect, your obedient servant,
NELSON Poe.
To his Excellency, the Governor
A few days after the date of this letter | had
another interview with the Governor. l found that
he had already had conference with Mr.. Price,
and, although he avowed his adherence to his
former opinion, it not difficult to perceive that
the representations which had been made to him of
the Importance of allowing the city of Baltimore to
realize the fruits of the dividend had made an i'm
preston upon his mind. When took nv leave of
him he declared his determination to appoint still
another Solicitor for the State and mentioned the
name of distinguished lawyer, of politics opposed
to his own, assigning as reason for the appoint
ment, his wish to avoid the appearance of parizan-
ship in such transactions.
| heartily appauded the spirit of the declara-