Morning journal and courier., 1882-09-28
City Court-Criminal Sfde-Judge Shsi-
The Air Line Suits,

The suit of William J. Hutchinson against the Boston and New York Air Line and the New York, New Haven and Hartford Rail- road companies, to restrain inc execution of the lease of the former road to the latter, was heard before Judge Wallace in the United States Circuit Court at Syracuse Tues day. The brief of s. E. Baldwin, counsel for the Air Line company, argued that the directors of both roads unite in the opinion that the rental under the lease is higher than the earning capacity of the Air Line road
 No fraud or breach of trust on the part of the Air Line roads directors is charged. The court is asked by the plain tiff to give minority of the stock holders a power which the Legislature has expressly denied, by making three-fourths vote conclusive as to the lease. The remedy by injunction is aa extreme one, not to be in
 voked except in elssr case, and to protect established right. Numerous aftidavits support the position of the defendants. B. EIlery Anderson, one of the arbitrators under formerly president of the Air Line, swears that from his knowledge of that road, that if operated in competition with the New Haven road, it would be difficult, if not impossible, for it to earn it's operating expenses and fixed charges. Under the present system. it would certainly be diff
 cult, if not impossible, for the Air Line to
 pay regular per cent. dividends on it's pre-
 ferred stock. The possibilities of ever pay
 ing the large arrearages of dividends on the
 preferred stock already accrued ($1 ,450, ,O00),
 without first d1scharging which no dividends
 can legally be paid on the common, are too
 remote to be worthy of any serious consider
 ation, the common stock practically having
 no real market value. Alphonse Duprat, au-
 ditor of the Air Line, deposes that in 1880, when the arbitrators fixed the Air Lines pool percentage at per cent. the actual earnings of the road for the first six months were more than they were for the same period in 1882. The per cents. received in 1880 was less in gross amount than the per cent. received in 1882, showing great ! danger of reduction in percentage at the next arbitration, and hence decreased l dividend on the Air Lines preferred stock. He also declares that the necessary repairs of the road will absorb for several years to come all it's revenues under the pool agreement. He shows that the same rate of increase in joint earnings as ruled during the last seven years, with no extraordinary expenses and ! with no change in it's percentage in the pool | She Air Line road would, at tho end of the | term of the proposed lease, have accumu1a- ! ted over $5,000,O00 rearages in div ! idends on the preferred, ahead of ] the common stock With the same conditions ] it would take, under the present pooling 1 scheme, $50 years before any dividend could | be paid on the Air Line common stock. He | says that the common stock never had any
 real market value; that it was offered to the deponent at per cent. and that the pres
 ent value fixed by the plaintiff on his stock 1 is largely in excess of what he estimated it in
 & suit in July l9s2 The affidavit of Thom-
 as l.. Watson, secretary of the Air Line,
 shows that the common stock has always
 voted with the preferred stock at the annual
 meetlngs of the company. Affdavits similar l to the above are made by E. D. Worcester, I H. B. Hammond, Daniel R. Hatch, Wilson
 G. Hunt Frederick Billings and others.
 Judge Wallace after hearing the arguments dissolved the injunction.