Los Angeles daily herald., 1889-10-10
A CHANGE OF NAME.
A Tive and a Half Million
Dollar Transfer.
THE CAUSES WHICH LED TO IT.
The Los Angeles Cable Company
Stock Exchanged For Pacific
Railway Company.

lished in this issue of the HERALD ap-
pears modest looking item which reads
as follows: "Los Angeles Gable Rail-
way Company to Pacific Railway
Company all real property, fran
chises, rights, interests, privileges, etc.,
$4,000, ,000." The deed bears the names
Of J. W. Robinson, the Vice. President of
the cable company, and J. J. Akin, the
Secretary and Treasurer.
The matter is one which will naturally
excite no little public interest, although
the transfer is rather nominal than =
real affair, and probably involves NO
change either in the personnel Of the
management at this end of the line, Nor
of the policy which will be pursued by
the company. The Pacific Railway Com
pany is an organization which was in
corporated under the State law of Illi-
nois, it's papers being fled at Springfield
during the month of August. Its incor-
porators and directors were the Chicago
stockholders Of the Los Angeles Gable
Railway Company, who, as is well
known, own about 80 per cent. Of ali tine
stock Of the company. The number Of
its shares was placed at Is 900, the same
az that of the original company.
As soon as this company was organized
a circular letter was addressed to the
stockholders in the original company
setting forth the reasons why the trans
fer from one company to the other should
be made. Under the California law re-
lating to stocks and stock companies
every shareholder Of any corporation is
responsible for Q pro rata proportion Of
all indebtedness incurred by the corpora
ton during the time that he is q stock
holder of record therein. This obliga-
tion is not relieved by the sale and trans-
fer of his stock, but he remains during
his lifetime and the life of the corpora
tion personally liable for such propor-
ton of the indebtedness incurred while
he was q shareholder as the amount Of
his stock bears to the entire stock Of the
corporation. This law is peculiar to
California. existing nowhere else in the
Union. The operation of this law was
80 disadvantageous in the case Oh the
Banfhern Pacific that it was found neces-
saryveo transfer the organization and in
corporation of that rosd to some eastern
State, and Kentucky, as is we'll known,
was chosen
Another difficulty which was en-
countered by the original company, and
one which more directly concerns The
citizens of Los Angeles, was that when the
trust deed was Issued by ]. F. Crank and
the other originators of the company to
G. B. Holmes and the newer company,
it was believed that 81, 800, 900, which
was prescribed az the limit of the deed,
would be sufficient to construct the
twenty miles of cable road now almost
finished but the actual cost of such con-
struc.ion will be over $4,000, 900, and it
is EFoeslsle that an extension will b6 re-
quireu in the near future. No provision
was made for this under the trust deed
in question. Under the new organixa-
ton an issuance of bonds to the amount
of 81. 500 900 was provided for properly
secured.
When this plan for transfer was
laid before the stockholders, both those
in California and elsewhere, it was &C.
cepted unanimously, and without hesita-
tion the transfers of stock, share for
share, were made.
The formal entry of the transfer of the
property of the company in this city
from one organization to the other was
made yesterday. The deed includes
this condition: "subject to present
bonded and other Indebtedness of the
company" This carries over the liza
bility of the stockholders in the original
company, under the California law above
quoted, into the new company, and
evades it's dangerous conditions.
A prominent stakeholder in the COM
pany said last evening, when inter-
viewed on the matter: "The change ia
in every way an advantageous one, both
for the stockholders in the company and
the city generally. 1t renders the stock
more valuable property, as it removes
disagreeable contingency which always
hangs over company organized under
this law. 1t also will allow the company
more freedom of action in completing its
present undertakings and entering into
new extensions"