The Hillsdale standard. [volume] (Hillsdale, Mich.) 1851-1909, 1878-07-23
THE LAKE Srs0RE RAILROAD
DIVIDEND.


THE LAKE Srs0RE RAILROAD
DIVIDEND.
The action Of the Directors of the
Lake Shore q Michigan Southern rail-
road in declaring but one per cent. div
.jend for the first six months OF 1873,
is being made the subject oi considera-
ole discussion by the New York pa
pers, and Mr.. Vanderbilt is coming in
for a good share 60 ienunciatiop. The
New York Sun Of July 9Th. has the fol-
owing IN regard To this matter:
Every since lt became known in
Wall street that the Lake Shore rail.
road would pay dividend for the first
-ix months of 1873 of only one per
sent, although the net earnings were
nearly two per cent upon the capital
stock of So, ,000,0 900. there has been
vast amount of unfaYorable criticism
Z the management.
The departed Commodore was always
in favor OF dividing whatever the road
iairly earned, whether the amount was
.arge or small, and in that way he
Quilt up a reputation which led inves-
sors to buy stock YheneYer il had been
lndnly depressed.
While the stockholders were always
N level in the matter OF receiving in-
formation in regard 10 earnings, they
we're sure of getting such areturn up
m their investment "a tho earnings
warranted. II is asserted ia Wall street,
however, that Mr.. William III. Wander
oilt gave the 23d street bears point
lpun Lake Shore in the spring worth
hundreds OF thousands of dollars, and
eft the bona-fide stockholders out In
he cold. This rumor has created
leal of dissatisfaction in Wall street.
It was known last fell that the Lake
Shore was increasing largely in earn
ngs, and many Of the original stock
holders increased their lines, and q
'resh influx Of outside buying was de-
veloped. Under these large purchases
inc stock appreciated 80 per cent.
Mr.. William II. Vanderbilt was one
of the first to lay 10 an immense guam
tity Of stock, and one OF the first TO un-
load when the price was high.
IL was suppo ed that his stock, in
view of the bettersd condition Of the
corporation was bonght as permenant
Investment. It transpired that this
opinion was erroneous, Tor he made
.vo or three turns in buying and sell
ing, and Just before he sailed for Eu-
rope last spring surprised Wall street
hy knocking the quotations from
50 TO Ga.
In his various manipulations Wall
street was left long OF tue stock, lead
,ng spectators holding large lines and
encouraging their friends 10 buy. IL
vas we'll known that the earnings ofthe
| irst half of 1878 were close upon 2 per
,ent., and the great operators did not
.are whether Mr.. Vanderbilt sold out
n not, so long as the dividend which
he earnings of the road warranted was
.eclared. Spectators reasoned that.
While the net earnings might be light
| 'or the lirst six months of the year,
here would be q large increase during
he last half.
Il was complete surprise when only
I per cent. w5s declared. Lake Shore
broke nearly 10 per cent. and large
md small operators suffered alike.
II WAS rumored IN the street on We'd
1esday that a movement had been be-
xun bv the great operators who were
| dissatisfied with the dividend 10 divert
| proxies from the Vanderbilt Board and
| a that way force the mana6 ement to
| 1av a proper regard To their rights.
Mr. Russell Sage is one III the lsrg-
sst stockholders IN Lake Shore. HIS
| purchases were made, as b. says, upon
| assurances from Mr.. Vanderbilt that
he road was doing splendidly, aud
would pay whatever it earned the stock
holders. Mr.. Sage sold many thous-
md shares put at high figures, and as
| he price fell away the stock was deliy-
red ~ him by the purchasers of his
| privileges.
| A Sun reporter called upon him aud
INQUIRED whether any move was on foot
| % overthrow the Vanderbilt manage
nent OF the Lake Shore.
/ Mr.. Sage said: If have lost n great
leal Of money in the recent decline Of
Lake Shore by my confidence in Mr..
| Vauderbilt's assurances, and now
lold very large line of stock. be-
ieve in the property, hut do not be-
ieve in the method of Mr.. Vanderbilts
treatment of the stockholders. l shall
10 all in my power, however, to see
hat the railroad is put into the hands
4 gentlemen who will renderits owners
satisfactory account of their steward
,hip. Mr.. Vanderbilt told me, as we'll
" ID. Z. Morgan aud Henry y. Smith,
hat Lake Shore was earning at the
ate OF six per cent. per annum, and
that the stockholders would get it. /
believed this statement, and have been
stuck Mr.. Vanderbilt has had too
many irons in the fire. He has divert
"A large amount of traffic over the
canada Southern railroad to keep New
York Central unharmed for the recent
| xurantee Of interest upon his bonds.
| lie has bought up a small road and
charged the cost to the Lake Shore
.arniugs instead OF construction. He
las deceived me and everybody else,
and propose 10 do all in my power 10
force him TO a more satisfactory ac-
counting, or TO retire from the manage
ment. Stockholders have come rights
yet. aud they can be enforced in the
| courts"
Mr.. jay Gould was also reported TO
Oe party to the scheme. When ques-
toned he was non-commital He said
ne thought the stockholders would be
better pleased TO receive all that the
road earned. At the same time he con-
'idered the price of the stock ought to
stay up better than IL there had deem
Questionable charges to construction.
tie did not feel bullish, bnt as long as
the short interest remained large the
to- would probably be strong and
active
Mr.. y. II. Smith was ont Of town.
Mr.. James r. Keene said: "I am
not ready to tell you all know about
his stock. Wait lit q snd yon will
'e satisfied with tue developments.