The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-07-05
LAKE SHORES ONE PER CENT.
DIssI TTSFA CTTON AMONG THE LARGE
HOLDERS or THE STOCK.
An Attempt to Dust the Vanderbilt Manage
ment- Russell snKc'- Purchase What Jny
Gould says aud What keene Doesn't say.


ment-ttusseIi Sngc'a Purchases hat Jny
Gould says and What keene Doesn't say
Ever since it became known in Wall street
that the Lake Shore Railroad would pay divi-
dsnd for the first six months Of 1878 Of only one
per cent. although the net earnings were near
" two per cent. upon the capital stock OF
$4,000 900. there has been vast amount OF un-
favorable criticism OF the management.
The departed Commodore was always in IA
vor Of dividing whatever n road fairly earned.
whether the amount was large or small. and in
that way he built up reputation. which led In
yestors 10 buy stock whenever it had been UNI
duly depressed
while the stockholders were always on a
level in the matter of receiving information in
regard to earnings they were sure Of getting
such "A return upon thoir investment as tho
earnings warranted. II is assorted in Wall
street, however. that Mr. VIM. II. Vanderbilt
gave the Twenty-thrd street bears point upon
Lake Shore. in the spring. worth hundreds OF
thousands Of dollars. and left the bona fde
stockholders out in the cold. This rumor has
created a deal Of dissatisfaction in Wall street.
1t was known last fall thatthe Lake Shore was
increasing largely in earnings and many ofthe
original shareholders increased their lines
and fresh influx OF outside buying was de-
vcoped. Under these large purchases the
stock appreciated thirty per cent
Mr. WIN. II. Vanderbilt was one Of the first 10
Law in an immense quantity Of stock and one OF
the first 10 unload when the price was high
II WIS supposed that his stock. in Wow OF the
bettered condition Of the corporation. was
bought Ms permanent investment 1t tran
spired that this opinion was erroneous; Ter he
made two or three turns In buying and selling.
and Just before he sailed. for Europe last spring
surprised Wall street by knocking the quotation
from 60 to Ga.
left long Of the stock. leading speculators hold
ing large lines and encouraging their friends
e by L. T known ths, the nno ear twa sSI
cent, and the great operators did not care
whether Mr.. Vanderbilt sold out or not. so long
Ms the dividend which the earnings OF the road
warranted was declared. Spectators reasoned
that while the net earnings might be light for
the first six months OF the year. there would be
a large increase during the last half.
II was complete surprise when only one per
cent. was declared. Lake Shore broke nearly
ten per cent. and large and small operators
IL was rumored in tho street or Wednesday
that n movement had been begun by the great
operators who were dissatisfied with the divi-
dend to divert. proxies. from, the Vanderbilt
board. and in that way force the management
10 pay n proper regard to their rights.
Mr.. Russell Sage is one 81 the largest stock
holders in Lake Shore. His purchases were
made rs he says. upon assurances from Mr.
Vanderbilt that the road was doing splendidly
and would pay whaieycr II earned to the stock
OF puts Mt high figures. and as the price Eel
away the stock was delivered 20 him at profit
by the purchasers Of his privileges.
A SUS reporter called upon him, and inquired
whether any move was on foot 20 overthrow the
Vanderbilt management of Lake Shore.
Mr.. Sage said: " | have lost great deal Of
money in the recent decline of Lake Shore by
my confidence in Mr. Nanderbilts assurances,
and | now hold n very large line Of the stock. /
believe in the property, hut do not believe in
the method OF MIR Nanderhllts treatment OF the
stockholders. | shall do all in my power. how
ever. to see that the railroad Is put into the
hands Of gentlemen who will render its owners
n satisfactory account OF their stewardship Mr..
Vanderbilt told me. ms well as ID. L. Morgan and
Henry y. Smith. that Lake Shore was earning
At the rate Of six per cent. per annunl. and that
the stockholders would gct II. | believed THIS
Itatemrnt. and | have been stuck Mr..
Vanderbilt has had too many irons in the
hre. T.. has diverted large amount Of traiiic
over the Canada southern Railroad to keep
New York Central unframed for the recent
guarantee of interest upon its bonds. He has
bought up a small road and charged IN" cost 10
Lake Shore earnings instead OF construction.
He has deceived mo and everybody else. and
propose 10 do all in my power TO force him To a
more satisfactory accounting or to retire from
rights yet. and they can be enforced in the
MIR. Jay Gould was also reported to be party
10 the scheme. When questioned. he was nom
commitial. He said that he thought the stock
holders would have been better pleased to re-
ceive all that the road earned. At the same time
he considered the price Of the stock ought to
stay up better than il there had been question
able charges 10 construction, He did not feel
extraordinarily hullish. but rs long rs the short
interest remained large tho stock would prob
ably be strOng and active.
Mr.. II. y. Smith was out Of town,
Mr.. james r. kerne said; " | am not quito
ready to tell YOU all / know about this stock.
Wait little, and you will be satisfied with the
Developments.