Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-12-29
THEPANHANDLE ROAD
Stockholders Protest Against the
Scheme of Consolidation
AND HAVE GONE TO LAW ABOUT 1T.
Dividends Earned but Spent in Costly
Improvements.
FRESH NEWS FROM THE THREE STATES

ESPECIAL TELEGRAM TO THE DIsPArcH.i
STEUBENvILLE, Dec. 2S.-Hon. Robert
Sherrard, of Steubenville, O., who is a
stakeholder and director in the Pittsburg,
Cincinnati and st. Louis Railroad Com
pany, is bringing an important test case in
the Ohio courts, arising out OF the recent
consolidation of the companies known as
the southwest system of the Pennsylvania
lines.
A number of stockholders of the Pitts
burg, Cincinnati and st. Louis road took
exception to the proposed consolidation.
But as they were unable to get any satisfac-
ton, Mr.. Sherrard agreed to make test
case and bring proceedings under the Ohio
| statute, which gives a stockholder the right
OF Joining IN new combination or COM
pany or not, as he pleases, and thus provide
Tor the determination of the actual, not the
mar ket, value of the objecting stockholders
stock.
The Stockholders Redress.
Under this statute if he refuses to turn over
his stock for that of the consolidated company,
Objectlng to the combination, he may have a
board of arbitrators appointed to take evil
dence and fix the valuation of his present
stock. When this is determined the CONSOLE
dated company will have to buy such stock
holders out at this figure or else suffer defeat.
and see the Panhandle or other similarly situ-
ated roads pulled out of the pool.
These arbitrators are DR.. d. w. Stanton, Pit.
Lewis and w, 7. Campbell. of Steubenville.
They have been sitting in Steubenville and
Pittsburg, and have secured access to the rail-
road bonds and accounts. In this manner,
some highly significant evidence has been un-
earthed which is very valuable and interesting
as showing how dividends have been kept back
on the common stock of the Panhandle road,
to The detriment of the holders and the benefit
OF other Pennsylvania stock and interests. The
evidence has now all been taken, and as soon as
possible after the notes are printed the argu-
ment will take place. probably within amonth.
The Earnings of the p, c. g. st. L.
1t has just been learned that 1t will appear
that the total earnings of the PIttsburS Gin
cinnati and ST. Louis Railroad for the five
years ending December 81, 1889, was, in round
numbers, nearly S12, 100000. Out of this there
has been taken over S9O00,0OO for expenses,
construction, the leasing of various minor
roads, payments of interest, etc. All of this
properly belonged to the capital account.
Out of this there was in this way paid the
cost OF of 50 miles of double tracking between
Pittsburg and Columbus, and between 100000
and S500,000 for the rebuilding of the Steuben-
vile Panhandle bridge over the Ohio, and also
some extensive tunnel work. 1t was in this
way, it will be alleged. that this Panhandle
common stock of about s., 500 600 has been kept
from paying dividends and its wonderful earn
ings wrongfuly applied to purposes and ex-
penses to which they should not have legiti-
mately been made to defray or contribute.
Dividends Could Have Been Made.
The evidence of the way this has been ac-
complished is obtained from the books them
selves by the examination mado by these arbl-
traitors But even after deducting the s., ,000,-
600, there still remains S2500000 of net earn
ings. 1t is thus evident that dividend of
Is l4-l00 per cent, or Sis 40 per 81 000 could
have been declared upon this common stock.
This being SO, then its,actual value, it will be
contended. instead of being $50 per share, is as
to ]. OF 500 per share. 1t will thus be readily
seen that. if this proves successful, it will be
valuable precedent for other shareholders who
are in position to resort TO the same relief. 1t
points out another travelled path by which
stockholders may get their rights in spite of
stock manipulation most extraordinary. if they
are only awake to their opportunities and don't
sleep upon their rights