Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1872-10-11
yeruout Central and Vermont and Canada Rail-
roads.


of corrnpt practices preferred against them
in The nnblic pres. further than a simple
statement of facts and truthful history of
the administration of their trust may, in
themselves. afford denial Of the truth OF
these charges.
The duties of the trustees and managers
are of A higher character than simple 'ln-
dication Of themselves. The charges which
have been made SO publicly OF maiadmlnis
tration strike fearful blow at parties ana
interests beyond and of higher Importance
than the personal status Of the individuals
who compose the board OF management;
They affect the values Of all the securities oil
the road held by innocent parties. They
strike at the vital energies of a great publlc
s,terprise. valuable 10 the State and com
munitv through which it runs, and OF I'M
mense Importance to all the commercial re-
lations and interests of great city. Wan
ton assaults upon it, therefore, and in such
a nublic manner. even if the grounds Tor
such charges were true. cannot be justified
upon any principle of sound policy, ana
when. as in this case. these sweeping char
yes of corruption and personal aggrandize-
ment are without real foundation, 1T becomes
only the more reprehensible and inexcusable.
If wrong existed in the management II was
easy to reach and correct il without running
the enterprise it was easy to reach ana
punish the wrOng-dOers without utterly
Frustrating all the securities held by limo
cent parties. Ii Is a source Of regret. there
fore. 10 the managers that any public jour
nal claiming a position of responsibility
should lend it, columns and its influence 10
asSail in - violent a manner the standing
and credit Of a road like this, until AT least
il was well assured from proper examina
ton Of all the facts that it, charges could he
sustained and Were, IN fact. true.
A brief reference 10 the history of the road
from the date of the first connection oil
portion of the present managers with II Is
necessary t. a proper understanding oil the
true position of the road and IT, relations u
its security holders.
At the date of their entering upon the
management of the property the road was
deaply involved in litigation. The rent of
the Vermont and Canada road was largely
in arrears. and a bill in Chancery was pend
Ing to establish the right of that company,
undsr the lease to the possession of ITS own
and Of the Vermont Central railroad.
The first and second mortgage bondhold-
ers. parties defendant to this bill, denied the
validity of the Vermont and Canada lease
and their right To- the possession OF the YER
mont Central for the recovery OF their over
due rents.
The first mortgage bondholder- also had a
bill in Chanccry pending to torecioSe their
mortgage and various other suits growing
out OF and incidental to these were pending.
In addition To- this the Legislature of the
State of Vermont had at its previous session
Iassed an act imposing upon the Vermont
and Canada Company. a condition o. the
preservation Of il, charter, the necessity OF
constructing branch into Burlington 60
connect with the Rutland and Burlington
road by circuitouS and expensive rpuie.
which, according To the estimate made,
would involve the the Vermont and tanada
Company in the expenditure Of over g NIL
hon Of dollars. in this condition oil the
affairs Of the company the road had become
greatly impoverished, It's road bed and track
were in sadly deprecated condition, the
iron hardly safe 10 run over, nearly two
thirds of the Vermont Central between
Windsor and Burlington at sub-grade and
nearly all the Vermont and Canada without
ballast. and a portion of it ON tre~tlcS. the
equipment largely deprecated. the bridges
badly decayed and many of them requiring
immediate reconstruction. The attention Of
the managers was absorbed and distracted
in attending To the lawsuits which were
prosecuted with great bitterness. and no
time left them to look after the bu~inc-- of
the road nor 20 develop IT. Resources and
traffic.
At this iuncture of il affairs an effort was
made to compromise and settle on a sati-iac-
tory basis all the then pending litigation.
After pr0tracted negotiation a settlement
was effected establishing the validity OF the
Vermont Canada lease and providing for
the payment of lis accruing rents and al~'
To- the rents overdue which had accumulat-
ed during the period of litigation. Prov
sion was also made for the construction OF
the branch into Burlington on an improved
line and at q reduced cost The change 10
the route reduced the cost to less than : 100
600. To accomplish this change IN the
route. however. the sanction of the leEi~a-
ture was necessary and the consent of the
Rutland a Burlington road was required.
These were obtained in the fall of lsj9 but
on condition that the branch should De COM
pleted within a brief period.
Subsequently new compromise between
the bondh0lders of the first and second mort
cages and the Vermont a Canada was made.
by which the overdue rents of the Vermont
x Canada railroad We're capitalized in part
and the capital of that company increased
from one million three hundred and forty
tlIIA lIDN~sillA lhf IAAultA ANlAli~ 4N tfhAf
millions of dollars. and the overdue coupons
of the first mortgage bonds. amounting TO
over a million of dollars, were funded and
the first mortgage increased from two mil
lions TO three millions of dollars and extend
ed for twenty years. The trustees and man
ayers were also required pay To the Vermont
Il Canada stockholders the sum Of so 900
balance of overdue rent. in three year, after
date. with interest. The second mortgage
was to surrender its coupons, all of which.
together with the principal of the mortgage.
were overdue, and the same was To be ex-
tended for twenty-five years.
The stock of the Vermont a Canada was
also further increased to the extent of S2j0.-
900, to be distributed among the holders Of
the first mortgage bonds in payment Of their
coupons.
This compromise, effected by negotiation
Of leading representatives of the various
classes of securities, was subsequently en-
bodied in decree of the Court of Chanccry
of the State. The decree of the court. how
ever, being only proleS~edly an aid to the
parties in carrying out the compromise.
could not, of course, become binding upon
all so rs 10 permanently establish the rights
of the parties except in one of two ways.
LIST, by the individual assent of all the hold
tl> 0l ll4t HffuIAAAt~ flnfNIAffl VI tAilIl inc
scope of the decree, or. ID. by the acquieS-
ence of the parties.
In order. therefore to give validity 10
this decree and 70 render it obligatory upon
all the several stockholders and bondhold-
ers as they received the new shares allotted
to them in the Vermont a Canada stock
under the decree. and the new coupons IN
der TIE two mortgages by which the time ON
each was extended, We're invited To execute
their receipt therefor, and assent to the
of the compromise. In this way
the decree became Of binding force upon all.
BY the terms of this compromise it was
prov ided that the road should be held per-
in the hands of the Court of Chan
Gerry, and the earnings, after paying the ex-
penses of operating and maintaining the
should be distributed among the
holders of the several classes of securities ac-
cording to their order Of priority
BY the provisions of this last decree the
status of the parties became fixed and the
relations of the trustees and managers 10
the property and to the security holders |
We're established, while at the same time |
their relations to the public a common car
riers charged with the duties and incidents |
attaching to such position were defined.
From the date of the settlement Of the |
conflicts among the security holders the |
road began 10 develop its business.
The fact that harmony was restored in
-pired confidence, the public were treasured |
md all the material elements of growth and |
prosperity began 10 manifest themselves /
llong the whole line. The stimulus thus
given to the business created new and con-
SANITY increasing demands for enlarged IA
.ilities. and these in their turn created the
necessity for increased expenditure. The
United and deprecated equipment was soon
ound to be inadequate to meet the demands
f the increasing business Additional
rains were required, and as these increased
n number the necessity for improved track
II order to secure an economical working of
he road was rendered more imperative.
These improvements and enlargements re-
luired large outlay of money. and with
Dad under corporate management would
AVE been supplied by an increase of it, cap
tai account and thus the earnings Of the
Dad would have been held legitimately to
'e applied to the payment ofdiyidends. But
lnder tie peculiar mana cement incident to