The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-05-15

securities will vest in a new corporation and
form a part of the security on a new first mort
gage bond" The East Tennessee, Virginia
and Georgia securities will be covered by the
same mortgage, and the two roads will be
under the same control. Can it be denied with
this avowed purpose would have the effect,
or be intended to have the effect, 10
defeat or lessen competition, and 70
encourage monopoyf Not only is
this true, but If it be competent for the Central
I Trust Company to operate one railroad system
/ of which il holds securt les If few words from
the mortgagor transferring the voting power OF
stocks pledged with 1t can give 1t control, what
it may do with one road It may do with
another; If it may vote the stock Of the Central
It may vote the stock Of the East Tennessee,
| Virginia and Georgia and Louisville and Nash
vile and all the others, and thus the railroads
| OF an entire section may be the playthinRs
OF the officers OF this corporation. Surely this
/ may tend to-deteat or lessen competition and
! to encourage monopoly. But whatever may
! be powers Of the Central Trust Company else
| where, it certainly cannot exercise such pow
! ers as we have described within the state of
! Georgia. A corporation of this state could not
/ do so. Comfy between the states authorizes a
| corporation to exercise its charter powers
| within another state, but It does not permit the
! exercise Of a power where the policy Of that
state distinctly marked by legislative enact
ments or constitutional provision forbds it.
1t Is said, however, that by the charter OF the
| Central Railroad and Banking Company other
corporations may own stock in that comp any. 1t
Is quite evident that the language upon which
counsel for the N Ovant rely relates TO CORPORA
tons OF the classes mentioned. The cities of
Macon and Savannah are mentioned, and other
corporations are then authorized; under IA
miliar rule of construction this would seem to
mean other municipal corporations. Be this
It may, If any other corporation had not pur-
chased the stock before the adoption of the
constitution OF 1877, such other corporation
could not buy it or hold 1t upon any contract
agreement whatever which might have the ef-
feet, be intended to have the effect, to defeat
or lessen competition or to encourage monop-
oily. This would be especially true of nom
resident corporation, which, when il enters the
state, does so with submission to the settled
policy OF the state.
The court recognizes the soundness Of the
authorities cited by the learned counsel for the
movant in argument 1t is, however, true that
they do not apply to case like this. 1t is per
hap5 true that there is no precedent precisely
pertinent TO the grave issues presented by this
controversy. They have spraRg into existence
because of the marvellous railroad develop
ments OF the country, and because OF the ease
and facility with which trust owning bare
majority of the stock of corpo-
ration can nullity and deaden
the vote of all the minority stock, however
great the minority or however rightful and in
telltgent would be its exercise. The alarming
effect OF this power may be illustrated by the
facts Of this case. Forty thousand shares of
stock have deadened the votes of 80 900 shares
and have controlled as many millions in values
These 90, 900 shares have been deposited and
bonds issued thereon. If the voting power of
900 shares may control the policy of the
entire block, and these 10000 shares
may thus control all the millions
belonging to the Central properties and vet
stockholders who have 81. 6OO shares have no
voice in the management of the properties in
which perhaps their all is invested.
We believe that transactions of this character
are within the spirit. If not within the letter. OF
the act Of congress, known as the Sherman anti
trust law. 1t certainly is, as we have seen,
obnoxious to the law of Georgia, and it was
certainly as obnoxious to the common law The
baeful effects OF such an unlawful scheme have
been most significantly illustrated by the record
itself. TIE property of one of the oldest and
most renowned railroads in the United States
has been brought to the verge OF ruin These
stocks were once so solvent aud reliable that
the trust estates the property of widows and
orphans OF charitable and leemosynary insti.
buttons were invested in them at the will OF the
trustees without an order of the court TO sane
ton the Investment.
The properties have been impoverished In
every department Skllrul artisans and me
chanics, who from their apprenticeship have
been in the service OF the companies have been
turned away. Vast buildings which were once
musical with the whirr of machinery and the
voices OF prosperous and contented working.
men, earning by their useful and valuable labor
a comfortable livelihood, are now voiceess. The
ashes sleep undisturbed In the forge and the
hammer rusts on the anvil. Merchants aud
tradesuen who havei depended upon the pur-
chasing power of these operatives have been
threatened with ruin; numberless houses ones
occupied by their happy families are now
vacant, and those whose all is invested in the
securities Of this company are haunted with the
expectation that the road may default upon its
obligations ana be sold under the hammer on
foreclosure, and provision made for their
declining years swept from existence
But this, and all of this, is unimportant com
pared with the greater interest of the people in
their riRhtful demand that the corporation Gre
ated by them and granted vast and valuable fran
chlses shall be managed as a railroad upon law
full business principles in the trans portation OF
freight and passengers, and for the deyelou-
ment of the state and that It shall not be the
toy OF the spectators. and that the franchis s
which they granted for nobler purposes shall
not be made the instrument of their ruin and OF
the degradation Of the state. The posses ion of
its stock does not give uncomfortable right in
the management of railroad corporation The
right of the state that the corporation should
conform to the purposes for which the law
created it is wholly paramount to any and all
rights of stockholders.
1t may not be doubted that the values repre-
sented by these AZ t0) shares of stock are emit
tied to the protection OF the court, and they
will be protected. When it is offered to vote
them with the legitimate purpose for which the
majority of the shares ofstock in a corporation
may be lawfully voted at the instance of parties
who have legal authority to hold and vote them,
they will be voted. The court will moreover be
happy to entertain any proposition for voting
them which will result i'd the management OF
this road In such manner that it need not be
wrecked in such manner, that its matchIess
properties may be utilized to pay its obligations
as they mature and to protect its values
1t is well understood by the court the mere
fact that this stock may not be voted in its
of the Central railroad and to the power of the
court and of its receivers to redeem IL for the
benefit of all concerned. The matter should be
speedily adjusted. We have no doubt that
properly managed in accordance with the law,
with the encouragement from those who are
friendly to 10, which its great impor-
lance deserves, the Central Rail
road and Banking Company can
only pay its obligations as they mature, but re-
habilitate its fortunes, imperiled they are by
this illegal voting trust of a majority OF
the stock, the exercise OF which the court has
enjoined.
The court is quite as SOLICITORS to protect the
interests of the creditors as of the stockholders
of this great property, but there is nothing
in this motion which will justify
the court In changing the order which
was mainly. indeed we may say almost wholly,
attributable to the wisdom, experience and
acumen OF the learned circuit Judge an order
intended to preserve the property for the
present, TO gather anew its dissipated assets,
and to restore 1t as speedily as possible to the
lawful charge Of those who may be found
legally entitled to its management and control
Let an order be taken denying the appGca-
tton.