Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1868-12-29
wALL STREET.
sharp Practice by Commodore
Vanderbilt.
Outsiders should Keep AIOOf
from wall Street.

From the Baltimore Gazette.i
Commodore Vanderbilt has sigualized
his Presidency Of the New York Central
by an operation which, il what is told
concerning it Dc only partially true, par
takes more of the morals peculiar to
Wall street than of great corporation.
But 2 few weeks ago suit was brought
against the New York Central on the
charge OF making sn over issue Of stock.
It was shown in the New York papers
that the charge was stale one; tha.
the alleged issues, IL there had 6een any
which the terms OF the charter did not
warrant, were Of long standing, and the
opinion was strongly expressed that the
Courts would not sustain the complaint.
The effect, however, OF this suit, fol-
lowed so close upon the Erie imbroglio,
created an alarm among timid holders
large quantities of the stock were thrown
upon the market, and under the pres ure
to realize were sold ct heavy decline.
Just SIS turn for the better wal shout to
take place, and when all the stock that
had been offered at the reduced rates had
been quietly bought up and q heavy
short list created, Commodore Wander
bilt. or rather the Company OF which be
.is not merely the President but the con-
trolling spirit, suddenly sprung trap
upOn the unYary by declaring "a scrip
dividend from net earnings applied to
construction equal to so per cent. upon
q share capital of SIS, ,567, 600. The
amount Of the scrip dividend is SO 829,-
GOO. Upon both stock and scTjp semi
annual cash dividend was also declared
Of four per cent. The total dividend to
be psid consequently equals IS per cent.
on the present share capital. The cash
dividend is four per cent. uEOR share
capital Of S51 .567 500
This scrip divided, be it understood, ts
not to compensate stockholders for the
ndu-psyment Of tie annually aceTuing
dividend at the close OF any one or more
wears since 1853, for since that date, I
whan the consolidation Of the road took |
place, dividends averaging seven per
cent. per Rnnum have been regularly I
paid them. To meet any losses sus- Z
tanned BY the stockholders previous to [
the consolidation Of the road scrip divi- 7
dend OF IS S94 500 was declared in 1858, 4
the interest on which has been duly paid
from that date to the present. The
scrip dividend declared on Saturday last, {
added TO the similar dividend Of 1853, In Z
ereasss the entire amount Of scrip issued I
to SCI, ,724IGQ whilst the entire capital I
stock Of the Company. after eonsolids- 4
ton, only averaged about Sz6. 900, 600.
So mitch We gather from the New 4
Y6rk. .papsTs. The Post furnishes, IN ad- 1
dlfion, statement OF the affairs Of the I
Company from the consolidation OF the |
road to lS87-Ta period of fourteen years
commenting upon which it declares that /
" so sar nom there Being dollar OF net 4
earnings expended in construction, or I
applicable to scrip dividend, there is l
not railroad msnin the United States 4
that would not testify that the earnings /
of the Company have not, SINCE the con-
solidatiOD, honestly met the charges /
uaon them for proper operating expen-
sss, interest and dividends. The exist
euce Of q fund from net earnings, eonse.
quently, is pure myth, having not the
shadow OF existence"
OF course present holders Of stock In
the Company DO not feel aggrieved.
They have indeed good reason 70 exult +
over the sharp practice by which they
have been &c greatly benefited. Many OF
them bought heavily OF the stock during
its temporary decline, and now enjoy the
fruits og their superior Rstuteness, or-as
is far more likely-of their secret knowl-
edge of the dividend about to be declared.
Toe real sufferers are those who, warned
by the experiences of others in Erie, and
sIprehendipg that New YORK Central
was about to become, likewise, the foot
ball Of eontending spectators, sold out
at decline, and were thus frightened
into sustaining, not only loss on the
first eosG Of their stock, but also OF the
scriD dividend which the Vanderbilt
ysrty held back until the trap was ready
% be sprung. The London Times may
well saw. in alluding 10 the Erie quarrel
and it, applicability is equally pertinent
10 the dsings Of those who control the
New York Central" There Is no nnan,
s;si innniry which persons IN command
If money cannot commit In Wall street
With entire impupity 81 regards legal
in the civil courts, and
verv nearly as regards social position"
Fhe moral OF all this, 80 far as outsiders
are concerned, may be couched in few
words. SO long as few wealthy capi-
tslists In New York are engaged In enOr-
NOUS speeulations in railroad stoek-keep
sloof from Wall street.