Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-05-13
RUSHED THE REPORT.
Charters Valley Gas Stockholders
Place Little Value On

Suoh olOlo i"hOy Ve@o OoVOhHoluCl
Place Little Value On
THEIR COMMITTEES INQUIRIES
Three Members Out of Seven Composing tn
Body Signed 1t.
1T CONTAINS INTERESTING READING
The special meeting of the stockholders O
the CHARTERS Valley Gas Company held yes
terday, at the companys offices, resulted il
an unqualified victory for the Board of Di
rectors over the investigators, and ended
in the Investigating Committee being dis
charged from its function by nearly unan
imous vote of the meeting, which
was well attended. The stockholders who
still believe that the Board of Directors is not
conducting the business of the company as il
should, have remedy in court, but, SO far as
could be learned, there is snot much probabil
ity of the matter being carried further, and
possibly the last has been heard of it. The
chief point raised in the committees report
was with regard to the legality of company
purchasing stock of its own from O pool and
paying for it with the monies of the com
pany. The meeting was called to hear the
report of committee of seven stockholders
appointed under resolutions of the stock
holders meeting of January 20, 1891, who
were empowered, if they deemed it advisable,
to proceed legally or otherwise, for the re-
storation of the SIS, 600 paid to WE. Schmertz,
of Nf 1,n
"as a gratuity for alleged services, with
out warrant of law or precedent" and,
further, to obtain information regarding the
legality of the expenditure of $751; in pur-
chase of stock, as being complicated and
difficult of explanation. The committee was
empowered, if it should find warrant suf1i-
cient for the possibility of annulling the
transaction, to bring suit in equity against
the directors who were a party to this ex-
penditure, for the restoration of the amount
of the difference between the then market
value and what was paid. The committee
has to proceed without expense to the COM
pany and report back to a meeting of the
shareholders.
Report of the Investigating Committee.
James II. Chambers presided. The read
ing of the last meetings proceedings were
dispensed with, on motion, and r. M. Snod-
grass read the report of the committed The
first matter dealt with in the report is the
payment of $4,000 to Mr.. Schmertz. The
committee found, from an examination of
the minute book of the Directory that res
olution had been passed on May 10, 1889, au-
thorizing the treasurer to pay William e.
Schmertz $4,000 for his services rem
dered the company. In pursuance of this
resolution, registered bonds of the company
Al - orixv tn
Schmertz, and he has drawn interest on them
regularly. The committee was advised that
this resolution was illegal and void, a fraud
on the stockholders and creditors, and that
Mr.. Schmertz could be compelled by the
courts to refund the bonds and interest.
Regarding the transaction by which $50, ,735
of the company's funds were paid out in 1889
for 1016 shares of its stock said to have been
purchased in 1888, the committee found that
by resolution of June 80, 1887, the directors
were authorized to increase the capital stock
81, 900 900 to raise money to pay off debts of
the company amounting to over 81, ,000, 900.
But small part having been subscribed up
to November, the Board of Directors passed
a resolution. on the 18th of that
month authorizing the Treasurer to
sell and negotiate for the sale of the
balance at par, paying what commissions he
5uOulu uttm pIOptls VII Op1 3fg 1000
the Treasurer, John 81. Dalzell, entered into
IN agreement with E. W. Clark, E. W. Clark
& Co., George B. Hill & Co., and others repre-
senting syndicate, to sell them $500 shares
Of Treasury stock at par, allowing them $15
4 share commission if taken within go days
from that date, and $500 more If taken and
paid for in six months at S. per share COM
mission.
Some of the Work of the Pool.
Subsequently a committee composed of
q. Sellers Mckee, Dan c. RIPLEY and James
Laughlin, Jr., appointed to inquire into this
sale, reported that when forming a pool to
sustain the market and make sales of stock
t was necessary to buy 2, 154' shares to secure
ong options on upwards of 5000 shares, and
hat .. w; Clark & co. secured the options
Utmost 400 shares, and when it dissolved
t had on hand ,la shares of unsold
'tock which the company was responsible
nittee also found that the $500 shares pur-
chased by G. s. Hill & Co.. as agents, was not
uch a sale as should be consummated, and
hould be cancelled. The Board of Directors
ldopted this report. E. ". Clark 4 Co
write from Philadelphia to George B. Hill s.
70. that they had bought 2,14 shares of
tock for the new pool at So.
In January, 1880, the authority given the
treasurer in October, 1885, to settle the ac-
,ount between E. w. Clark & Co. and George |
3. Hill & Co.-acting for the company-on |
he basis of 1,026 shares, was approved by |
of the Board. The books of the |
company show that of these l,O26 shares, LOIS |
we're paid for in cash with the funds of the |
One hundred shares were paid to |
george B. Hill & Co. in stock for selling the |
rev Easton, r. NJ. Snodgrass and John r. |
Iregg to Secretary j. F. Tener for permis- |
ion to see the stock subscription books was |
efused, on the grounds that it could shed |
tnd
o investigate. The report charges the di- |
ectors and officers Of the company with |
eing unwilling to have the matter thor |
ughly examined.
Speculation With the Stock.
1t is charged by the investigating COM
nittee that a pool was formed for the pur-
ose of speculating in the stock of |
he company, and 2,14 shares pur-
hased by it, at ss5, before any stock
he deal having turned out unfortu-
te, leaving the pool with 2, 154 shares on its
andS, the funds of the company were used
the pggd IT,
Tas much higher than the market price, and /
hat the stock so taken by the directors was
ot the same which the pool had purchased
rom the company, but that which they had
ought from other persons; that it was not
art of the increased stock authorized by |
he resolution of June 80, 1887, but part of
he STOCK issued before that time. IL also
ppears, according to the report, that on
anuary !, 1889, the gross debt of the COM
any was 81, POI 56S S. less SIG, 1l6 20 available
ssets, making asset debt of 81, ,l9l, ,451 sS over
nd above its available assets. Thus, at
ime when 100000 additional capital had
cen authorized to pay off this indebt-
dness, the directors allowed stock.
olders holding stock to the amount of
0l6 shares to withdraw from the company,
lking with them their supposed proper
onate share of its capital, amounting to
8, 735, and paid this sum out of the proceeds
f the sale of the stock which was issued and
DID for the purpose of raising money to pay