The Republican journal. [volume] (Belfast, Me.) 1829-current, 1882-03-02

When the policy OF nam aiming the sink
ing fund should cease then the interest
and expense of the orgallz ,tjon must
first be provided for before there would
be money that could be used for divi
bends.
The Directors believed that "net earn
iugs" for dividends had no other mean
ing or Interpretation than the sum re
naming after making the provisions
above referred to. Tnis view is con-
firmed by some of the most prominent
railroad men in New England, and is
fully sustained by the legal opinion here
to annexed to which your attention has
already been clllel T1is course, thus
briefly outlined, has been as we supposed
acceptable and satisfactory to the stock
holders. No protests against it have
ever been presented to us no motions
or resolutions proposing change have
ever been made at the meetings of the
stockholders no injunctions have ever
been served upon us. On the contrary,
at the meeting of the stockholders in
1879 the following resolution, approving
our action was unanimously passed =
"ResoIved that il is the opinion of the
stockholders that the action Of the Direct
ors III declaring a dividend of four and
one half per cent to the preferred stock
holders and reservlng the remainder OF
the net income Of the road, as sinking
fund has been wise and for the best in
terests Of the company, and meets with
the approval of the stockholders.
Recently new plans have been sug9es-
ted for the disposal of the rental annually
received. In the first number of The
Tax Payer" two plans were set forth,
slightly differing, but both suggesting
tine division Of the entire rental of S36.-
600, as dividends. giving per cent. to
the preferred and 5. to the nou-preferrtd
stockholders. One plan then suggests,
for meeting the interest of the funded
debt the retention by the corporation, of
s. 20 Of the dividend of each share of
preferred and non preferred stock the
other suggests, fCr meeting said interest
the retention of a larger portion from the
share Of the preferred stockholIer, max
ing the two CLASSES contribute in the RI
ito of their dividends or as 6 to 81. The
parties suggesting these plans have failed,
n n O. w ~ lNu
what authority, they eau, after declaring
the dividend, withhold enough Of that
dividend to meet the interest liability of
the corporation. A dividend once de
clared becomes the property of the stock
holder and if not paid as declared he has
a right of action for its rec very the same
as for any demand due him. There is
no way that the property of a stock
boiler, whether dividend or other prop.
erty can be taken for the liabilities of the
corporation except by assessment, and
assessment on stock paid for, is absolute
ly prohibited by the laws of our State.
Either plan would be void IN law and
neither is ia accordance with the spirit
and letter of the contract as understood
by all the stockl olders. D yiieu1s are
only declared under the 18th bylaw,
quoted in the appended opinion. To
this by law the stockholders have twice
given their Interpretation once at a
meeting held January 18th, 1870, and
again at a meeting held in July 1873. At
the former meeting, held to determine
whether to Issue mortgage bonds, the
stockholders voted to issue $3.50 900 in
first Mortgage Bonds with interest at six
per cent. in gold they also voted to is
sue second mortgage bonds "to every
person or corporation taking or paying
for stock in this c)mpauy," those to
the preferred stockholders should draw
8 per cent. interest, those to the non
preferred to draw the rate per cent. pro-
vided in the 18th by law. This action of
the stocIlh)l ders gave their understand
ing of the bylaw and relative rights of
the different classes of stock as to divi-
dends, at that time which was after the
payment of the interest on the first mort
gage bonds, the preferred stockholder
should then receive per cent. and the
balance go to the n-preferred or to such
other purposes as the same might be
needed. Whether this second mortgage
was valid or not does not affect the inter.
probation Of the bylaw, made at that
meeting. The Interpretation given at
the second m letting, July 1878, was ex.
pressed in words in the form of an amend
ment defining the meaning of "net earn
ings" as used in the 18th by law, for div
idend purposes, and re affirming the in
depreciation of the former meeting. At
both of these meetings the vote for the