New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-09-17
RIGHTS OF STOCKHOLDERS.

| NOT HAVE BEEN MADE.
Acknowledgement Russell has written an
opinion in reference the application OF Sylvester H.
Kncelind and others that the AtorneyGeneral should
bring an action I'm the name Of the people for the
poya Of certain directors Of metropolitan Elevated
Railway Company. He holds that the action may be be-
gun An application had already been made
to the Attorney-Gene for leave to begin
an action to have the charter OF the Man
haitian Company declared forfeited, but IL was
denied on the ground that action could longer
be maintained after the judgment-n the Supreme
Court-by which the company was held u be legal ana
valid corporation The application for leave TO bring
suit to remove the directors OF the Metropolitan Com
panv the Acknowledgement declares, presents
trely different ease. The Attorney General I'm the be-
ginning Of this opinion reviews the management and
the complicated litigation tho Manhattan, Metro
pOan and New-YOrk Companies prior to their cOnsoli-
daon The Manhattan Company prior to May a. 1872
d" had paper charter with nominal capital OF
So 100000. and actual cash capital OF only
100000" Since that time by skful com
binations without the payment Of any additional
capital its nominal stock has been increased TO
S26.OOOOO0." Its preferred stock. amounting 10
S13,OOOoO0 valued ut nearly par, and its
common stock, also amounting to Sl3OOOOOD, was sold
at than 30 cents the dollar The cash value OF
its property had risen from 100000 TO more than
So 100000 This Increase in yalne was undoubtedly
lawful and proper, II effected by the managers OF the
company without unlawful derOgatiOn OF tho rights OF
the stockholders Of the other companies The Attorney
General then reccs the lease OF May 90 1879 by when
the Manhattan Company agreed to pay besides n nOm
rental OF $4,000 year 10 per cent dividend upon
So 500 600 of the stock Of each OF the other two
companies, and also to pay S950OOOO Of
mortgage bonds OF the New-Y0rk Com
pany, aud Sl2,sIs.OOO OF bonds of the metropolitan
Company, with interest principal and interest should
become due BY the same lease the Manhattan Com
pany issued to each Of the other companies SG5o0ooo
of It's bonds. which bonds immediately converted
into stock Of the Manhattan Company.
Under this lease the Manhattan Company constructed
about eght miles OF additional railway out OF It's eirn-
mgs and made no default In meeting its obig atoms,
except In the payment Of taxes until July l. 1881 when
1t refused pay the quarters rent then due. On July
10, 1881, John L. Dillon and Amos l.. Hopkins
were appointed receivers OF the company IN
suit begun by AttorneyGeneral Ward for a
dissolution OF the company on the ground
If It's insolvency. The New-York Company made aTun-
successful attempt possession Of its road ON
the ground that the Manhattan Company had not kept
the covenants Of the lease. on October D. 1851, the
directors companies without consulting the
stockholders, made new agreement or lease, by Whlch
the rent payable TO the New-York and Metropolitan
Companies was reduced from 10 per cent dividends on
the stock of those companies to per cent dividends.
and by which the rent due the NewYort Company was
preferred At that time william T. Garrison, Jose r.
de Navarro and Horace rOrer directors OF both
the Manhattan and Metropolitan Companies Between
the date or TINS now lease ana NOFtmDcI -, looAJ
a supplemental answer served In the suit before
Justice Wc-tDrook for the dissolution OF the Manhattan
Company In this it was set mp hat the company
had obtained possession Of the roads from the receivers
and that it then solvent "This answer" the opn-
ion SAYS seems have been accepted ny the peoples
representative true the reduction of the rent being
considered making the company solvent" The d-
rectors Of the three companies November H. ISL
without consulting the stockholders made further
agreement by which all three companies were con,ol
dated the Manhattan The Stockholders OF the New
York Company were to receive Per cent
preferred stock the stockholders OF tho Metropolitan
company were receive per cent second preferred
stock the S13OOJOOO capital stock o. the Manhat-
tan Company was to be common stock Of the new con
solidated company. At that time Jay Could, Cyrus W.
Field Russell Sage, Samuel sloan Sidney Dillon, VIII
inn r. Garrison and W. T.. Conner were alike directors
of the Manhattan aud Metropolitan companies and all
or nearly all Of them far more largely interested n
the Manhattan the New-York Company or IN both
than in the Mctr0poIan."
On November Il, ISL, the supreme Court At
Special Terra in Albany male decision TO
which it il assumed that the representative Of
the people asseutcd," by which the Manhattan
Company was held 10 b. q valid corporation, and the
agreement Of October 22 Just and equitable settlement
rcquirur ratification by the stockholders of either
company 1t was also held that the Manhattan Company
wa, solvent The directors of the Manhattan Company
on March !, lS~2, declared II quarterly dividend Of y
per cent The first and second prefcrre stock, or 10
such of the Stockholders Of the NcwIork and MetropO
ifau Companies should render their stock before
March j. Only about 1000 shares Of TIE metropolitan
Company were surrendered that 6lO10 shares Of his
STOCK we're LEFT without any provision dividend.
am satisfied" the Atome} General says that most IL
not all holders ~ these $1,000 shares refuse 10
consent 10 the consolidation" The dircctosa Of the
three companies March f. 1852, voted to modify the
agreement Of November IT, 1881. TO make the div
idends the second preferred Manhattan stock cumu-
layc thus furnishing an 0ddtonn! incentive 10 We.
tropoltan shareholders to assent 10 the osoldauon
The Attorney General next refers To IA" trt lhN
under the laws Of this state uo suit can be brought to
the directors Of corporation ioTall god '7con
the directors Of the metropolitan Company the annual
ecton OF dliGcloII Mn' Po,lioI," ',y 10 80
mdna-r their own property mti that Time hor can they
Stockholders thirty dny, corc the clco on and IN order
10 become registered stockholders they must surrender
ccriiioaic, which donot contain the 10
per cent smlaniSe- -HoliGird 3 9 na i
stockholders must assent To the agreement Of Octo er
possibility" the Attorney General goes on. " that the
manner and the method, hy which tie
Manhattan Company has grcuy increased rs value
at the expense OF the Mctropohtnn COMPANY and by
which hc o"ncs Of The metropolitan nave lost the control
and the power of distribution over their own property
have been adopted 10y ir trustees oi the metropolitan
Company IN entire good ihth ana IN sincere t4oI1h
very short sighted Innocence; but II Such ends had
been desired IN the beginning anu So4'pl,ioh Mns |
consent TO the ,wallowne mp ot the N"itan 10y the
Manhattan fumiuiA. u~iule anu ''~i-ill| iu'il' !
familiar with stock market and cons lou, of their
own financial power and Of tine Likelihood of their !
succc-. IN legal well financial battles. could not
have adopted "a moro sIlul policy. The agreement of
October - ISL. il claimed by the directors 20 be |
within their power md Justified by the inability OF
the Manhattan Company 10 pay the ten per cent rental
II NAV however. bc urged that II the Manhattan |
COMPANY could not pay the Metropolitan Company !
could eci back the road aud enjoy the emoumcnis itself.
The elevated railway being an experiment II would |
have been ~ sagacious business management tor mo
Atlantic Gable Company. within two years after tho
copl, tion of its cable. to have contracted never 10
ask within thousand years more than SIX per cent
rental on its line and have suhOninatcd even that 10
the same um0unt to be paid to rival company Tor tho