The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1875-05-25
A FRAUD ON THE PUBLIC.

on in the ranks of the Central Vermont
railroad company, shall serve to enlighten
our future legislators somewhat in refer
ence to their duties and responsibilities, 1t
will not have happened in vain. Perhaps,
too, sore of the stockholders would be
content to march to new lawsuits and
final loss Of their present investment under
either governor, if so be these future legis-
lators could learn such lesson, from this
unpleasantness, that they would, hereafter,
so charter railroad companies that from
reading the act of incorporation some rea-
sonable idea could be formed of the prob
able amount Of the capital stock. Venture
nothing, the adage tells us, and nothing is
gained. The Central Vermont charter IN
forms investors that whether they venture
much or little, they risk, and will prob
ably lose all. We venture TO say that this
same charter is the greatest enormity that
ever disgraced the legislation OF Vermont.
We care not now to inquire which govern
or is legally right whether old stock was
legally issued, or legally sold, or whether
new stock was fraudulently and Illegally
issued and sold--under the charter, it all
amounts to the same thing.
Let us again quote, as We have hereto
fore, portion of tho first section OF the
charter. The capital stock, says the act
of incorporation, shall be divided into
shares of one hundred dollars each, and
shall be Ia an amount sufficient to 'p,o'-
chase and retire" the first and second mort
gage bonds of the Vermont Central, ''sdid
" amount 10 be determined By the directors,
" and SUCH additional amount as may be
authorized" by the stockholders. What
is the am ,uut of capt. / stock? Why, it
is liniitess, IS it MOI : To-day, the direc-
tors may e.: it at one sum tomorrow, at
another: the next day, at still another (;
aaa so on indefinitely. The first and Sec
end mortgage bonds amount, without in
terest. to four millions five hundred thou
sand dollars. A POI ion of the past due
interest has been funded to the amorat Of
halt million lJllars more. Hos much
stock will it require TO purchase and re-
tire" these bonds? That aepends--it de-
pends on the value cx the stock aud the
value of the bonds. Shrewd directors may
appreciate or depreciate the value OF each
at will. Stock of the actual value of q
million dollars might or might not ''pur-
chase and retire" these bonds. Stock of
much less actual value might be sufficient,
or it might require stock of the nominal
value of ten millions of dollars to do it.
The stock might be good investment to-
day, but the directors could SO manipulate
the market, tomorrow, that it would be
absolutely worthless,
Under this charter, such an issue of
st ock as that complained of or one of far
greater amount, taking the worst view OF
it, could be legally made. The act would
he legal, the stock would be valid, ylt il
would be, all the same, fraud on the
public. Under it Governor Smith coult
legally do just that which he is charged
with illegally doing. Such power as il
thus conferred would be used by any maj
in an emergency. The fault, if any there
is, does not seem to be in him but in human
nature and In the legislature of Vermont
We believe that any railroad manager
would act the same way under similar cir
cumstances. We cannot regenerate human
nature, bnt we can reform future legsla-
lures. Let US leave off endeayoring to con
vert this man or that, and apply our eff
forts to making such railroad charters thai
fraud on the public cannot be legally
committed by any man be he an ex-gover
aor or not That which tends to defraut
investors or the public, ought to be frau(
in law as well as in morals-lct us palS'
il so