New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-07-01
JUDGE SPEER'S DECISION.
THE CASE OF THE GEORGIA CENTRAL.
WHY THE STOCK HELD IN TRUST COULD NOT BE
vorED-THE TRUST A VIOLATION OF THE


Emory specr at Macon, Ga, In the case involving the
right Of the Central Tr.st Company Of NewYork to
vote stock held IN trust by 1t at the last election Oh
the Central Railroad and Banking Company OF Georgia
has not been published here The Tribune herewith
gives the salient points of the decision The frenaS
Of Judge speer say that the criticisms OF him made by
certain pcrsons In New-York are entirely un1ustihe'
In support Of these views they adauce certain passages
l.. his decision His friends say that what the Court
said was absolutely hight and just 1t is also asserted
that his ruling was beneficial the interest Of tho
Central Of Georgia.
Judge Speer in his decision, at the outset lays
stress upon the constitutional provisions OF the State
of Georgia. lie says:
II is also essota to direct attention in the outset to
paragraph Of the Constitution Of the state OF
Georgia This clause OF the Constitution Is as follows;
The General Assembly OF this State shall have no power
corporation to buy shares of stock In any
corporation In this state elsewhere UT 70 make
any contract agreement whatever with any such cor
voratlon which have the effect be Intended to have
effect defeat lessen competition In their respective
busInesss TO encourage monopoly; ana all such COLI
| tracts agreements shall be Illegal and void'
The Constitution ia which this clause is found was
adopted IN the year 1877 II evident at That time
and become plainly evident since Chen that IL
was Indispensable by comprehensive and imperative enact
fundamental law to orest the tendencies OF cor
porlte bodies toward abnormal and destructive aggresa
lions OF powcr-tendenccs which could not have oeeh
foreseen ad which, therefore, had not been restricted
limited BY the legislation Of the past-tendencies
enaneer the sauory purposes for which such cor
poatlons created by che state and which threaten
10 ndct upon the mlttudes Of the people the most
destructive Injustice and lniury-injusce end injury
against which Is obviously the duty OF the Government
to afford them protection IL woud be perhaps UNCUT
b express IN compass restriction OF cor
porate rover conclusive In It's nhbitery erect or
moro difficult 10 e,udc by those who for any motive
would seek 10 avoid les legal force Vile Langdoa vs.
Branch 81 Federal Reporter, 449 Hamilton VS.. the
Savannah Florida and Western Railroad 40 Federal He
porter. Alp.
Tim Court then recies the formation Of the corpora
ton known as the Georgia Company, under the laws
OF North Carolina ind says: "The charter does not
appear TO have any validity. This appears to be both
banking and railroad corporation and such corpora
tons can be created by the Lcgi -atlre only" At"r
rccitlng the various steps which led up to the appoint
ment OF a receiver for the CeOtra OF Georgia ana the
effort % the tedup stock, Judge speer speaks OF
the representation made By the Richmond Terminal
Company surrcndcring It's voting right to the Central
Trust Company ms follows:
The representation OF the Terminal Company purports
only surrender the voting right In 22V0 shares Oh
Both representations restrict transfer OF the
voting right reserved by the Terminal Company to the
election be held MAY TO- 1892. or ~ any adjourn
ment thereof /. Is difficult 70 perceive how this instru
differs in matter Of substance from an ofdinary
proxy The transfer o the Georgia Company OF IT'S right
20 vote the stock IS considered by the Court material
'NN'
which Q cour, Of equity VIII pay any attention. The
Georgia COMPANY been wholly ABSORBED by the Ter.
mlnol COMPANY but the Terminal Company ~nIts 70
any transfer Of the rg TO vote the 10000 shares OF
stok In question aud limits IT. representation TO the
Cour, 10 200 shares which has presumably acquired
from sources other than he Compsnv. IL fol-
lJw, Therefore that 10000 Ires Of this stock the
condition Ia precs the same as when the Court enjoncd
the Central Railroad om re ewing Or counting the votes
thereof for the rca on ths l. had teen purchased and
OF and constitution OF treOrgia
Bat. as we nave sen the transfer Of the Terminal Com
lany relating 1900 shares Is nothing more than proxy
and the Terminal Company being enjonet from voting he
sock directly Z, csno permitted 70 vote 1t by proxy
un.-. indeed u thought proper % set aside The former
Judgement Of the court In this respect
he- appears De consideration whatever for this
transfer The Central Trust Company OF NewYork holds
this merely naked trustee 20 secure certain lonjs
for which pledged cols raj security Now when
those issued the stock thus pledged had ATTACHED
n Il no voting power Of which either the Trust Company
or toudhoders had the right 70 avail Themselves us
voting poser therefore 40 part Of their security
Th transfer II Il cnlcaclous 10 convey the vo
ing !ranchise Of all the stock would be merely an az
temp, 10 engrsft ulon the new feature, which
the b-ncfcae u the trust dd not sock or exp ct AZ tho
time O, it, creation The voting Of The stock was en-
Joined bccap~e deemed b. the Court thot II would
.,rirg about a public the gravity Of which cannot
vol ~ foroold further deemed 10 thrcsten the
continuance perhaps the aggayotton Of the illegal and
lnjurols rcsu- II had already accomplished
The Court then expresses the opinion that the Cen
trail Trust Company not I'm any view ga proper party
10 vote THE stock The judge doubts n its charter
affords any authority for tho exercise OF such powpr
and cns attention the fact that II concerned In
an attempt 10 carry ont reorganization which would
have united roads that aro clnimcd b. competitive
In Georgia The oprlOn quotes from the circular
issued under the called Olco plan, and confines
Can Il he denied that this a,owcd purpose would havo
tho effect b. intended 70 have the effect to defeat or
lesson competition and monopoly and Jet with
The voting power Of his stock 10 IT, control tho frust
com,anv can accomplish this re-utl Not Only Is Uts
true but competent for the Central Trust Company
70 OBJ oilroad system Of which 1t holds secart"s
II few words from tho moreagor transferring he voting
pocor OF stocks lodged vr.h IT, give II control what
Il NAV do with ono road Il do with another II may
yo, the stock Cenra II vote the stock OF the
East tennessee Virginia and Georgia, The Louisville and
Nashville and NIL the others and thus The railroads OF an
entire section may be the payhnSs Of the officers OK
this corporation Surely This tend TO defeat or lessen
comp-titlon and encourage monopoly. But whatever
may BE- the poser. Of the Central Trust Company else
where certainly cannot exercise such powers as We
have described within the State Of Georgia corpora
ton Of this could not do Comfy between the
state, authorizes corporation TO exercise ts charter pow.
cr within another state but IL does not permit the exeess
o, O power whore the policy Of that state distinctly
marked by Legislative enactnents or constitutional pro-
,s'on forhids IT,
As 10 the effect Of tho voting trust the Court says;
II Is perhaps true that there Is precedent precisely
pertinent grave Issues presented by this controversy
They have sprung into existence because of the marve
ous railroad development Of the country and because OF
the case and facility with which trust owning bare
majority Of stock OF corporation can nullify ana
deaden the vote Of all the minority sock however great
the minority or however rlghtful and Intelligent would
be lis exercise The alarming eject Of this power nay DO
illustrated by the facts Of this Forty thousaad
shares az stock have deadened votes OF go 900 shares
and have controlled many millions In values. These
90 900 shares have been deposited and bonds issued
thereon II voting power OF the stock is apportioned
among the bonds 90 100 shares may control the policy
=, tina cntiro block and these 20 100 shares may thus
control oil the millions belonging 70 the Central proler
ties and vet stockholders who have - oCo shares have no
voIce In the management Of the properties In which per-
hans their oil II invested.
IL is insisted ty the petitioners that the Terminal Com
many has no apprcciable interest In the stock OF tho
Crntpl Railroad Tho interest It formerly had was con