The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1873-03-31
.Tns s,ates Stock in the DanvilIe r. r.

&
The report of: the special committee OF sn'
Herse OF Delegates appointedto ipFess'sM !,
the faeas concerning the transfer OF the s.c,s
J If tl,o State in the Richmond ana Da's' ~,
railroad Company tothc purchasers '''c'eo
was submitted by its chairman Mi. n n,,, -
Esitsy isss, to the House, and inc D.Sl,a'e, !,
~ saturday contained the brief summary OF
.,,e s conclusions Of the committee from the
I ,os,inr,ny elected by their investigator
Tho committee declare that the transfer OF
moro chan 1900 shares Of stock on that occa'
sion was unlawful.
The. ACT under which the transfer was
made provided for the sale and transfer Oh
10 900 shares OF railroad stock ct their PaE
value of Si00 per share for Sl,2co,ooo III
State bonds at par; but the purchasers claim
to have come into possession of $4,000 shares
of railroad stock, and are represented III
meetings of the company to that amount.
On the 10Th Of December, 1896, the Eic!i-
mond and Dinvil!e Railroad Company, in
annual meeting, declared q dividend in stock
to twice the amount of the aggregate then
held by stockholders; but this act was not
certified to the State, and there was no Official
information in its archives showing that this
dividend bad been declared. The law pre-
yidinc for the sale Of her shares in the COM
pany only contemplated the sale of her ORR
ginal number Of shares, emitting altogether
the additional shares to which She was en-.
titled as q stakeholder by this declared dlri,
dend. And now the sale and transfer Of this
additional stock, under the law, is declared
void.
The committee recommend legal steps FOR
the recovery Of the new shares, and to re-
cover from the purchasers of her stock
sI9i.59I of interest Improperly Withheld from
her ID the transfer.
The committee is most cgrcgious!y mista-
ken, or very grave irrcgularty has been
committed The facts should be thoroughly
sifted before q competent tribunal.
The dividend of stock declared by the
Danyilie Railroad Company in 'G6 was th"
first essay at" watering" railroad stock that
was ever, VIC believe, made IN Virginia. The
ground on which it was done was that tie
road was built largely Oh borrowed capital,
and the stock subscribed represented only II
part of its real capital. 1t was assumed,
therefore, that it was but just that tie num-
Der of shares of stock should be made to ap-
proximate more nearly the capital invested
in the work. But still the precedent was
not good, and the advantage to the stock
holders, If any, must have been exceedingly
trivial. The intrinsic value Of the shares
fell to even less than one-half Of their pre-
yious value in the market. Indeed, it may
be defence of the transfer that the 2l,0Go
shares were intrinsically worth no more than
the 10000. But the fact Of the existence OF
the additional 10000 was not made known.
was not incorporated in the bill. The whole
might, and probably would, have been sold
for the l,200,G00. But this was not done,
and tue omission was unfortunate.
But the principal point in the transaction
is that the Danville Railroad Company is the
nominal purchaser of the States stock in the
road, and that that company failed to inform
the State that it was entitled to double the
amount of its original shares Of stock. Nor
was information conveyed to the Legislature
when the bill authorizing the sale of the
States shares was pending. This was at
least n most unfortunate delinquency on the
part Of the company. 1t not only subjects
the company to j suspicion of cndeavorinS
for an advantage 10 hide from the State the
knowledge Of It's title to double the number
of shares which were to lie sold under the
bill. but cmbarrasseS it now with the claim
of the State to the additional 10000 shares
which the committee assert she is now cnti-
tied to, and upon which they urge the State
to appoint proxies and directors in the com.
pany.
The transaction has been, therefore, badly
managed. There arc loose ends to it, and
openings for damaging suspicious and
charges, which, nevertheless, we hope may
be satisfactorily cleared up.