The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-12-20
CENTRAL RAILWAY SHARES.
Nav Yet Vitiate Street Railway
Consolidation.
CONTENTION OF GEO. WHITFIELD
His Statement of the Way the Small
Holders Are Ignored by the
Majority.

1Dere is Al interesting Story IN cOU-
nection with the com bine Of the street
railways. which shows that the Southern
Pacific people do not hesitate TO follow
their own unsavory presidents and to
treat individuals as they have treated the
Government.
George Whittell, president of the Luning
Company. tells the story. 1t is this:
I'VE have some interests in the Central
Railway, which has franchise from the
ferries to beyond First avenue, and an
other franchise for the line beginning at
the foot of Sixth street and running across
town to the POstofflce and beyond. The
Central Railway is one of the oldest CON-
panies in the city. Lately the Southern
Pacific people secured control and began
to wreck it.
"The Central does not owe dollar. It
has no outstanding bonds" continued
MI WhitteIl. Now under the terms of
the consolidation it is required that share
holders of the Central must give up three
shares in that company for one in the
consolidation. Then there is another IN
fair advantage taken. The shares of the
Central Railway, 10000 in number. are
worth 81. GOO, 900. They can be sold to-day
II llh JOIlAl MtI6 tuclcu 1Ol dt Icd0L
$500, 900. The Southern Pacific people own
a majority of the shares, but that does not
make it right for them to impose on the
minority. The Southern Pacific people,
or the Market-street railway, to be more
exact in terms, paid Sl25 share for the
stock of the Central Railway. 10 effeeting
the consolidation the shares are rated at
S14 80 share"
In addition to this. by taking a reduced
number of shares IN the consolidation at a
valuation which the minority shareh olders
believe to be several times less than their
real worth, the holders of Central stock
fad the property received in exchange
must bear its pro rata of indie btedness of
the o her lines entering the consolidation.
Shareholders of the Central, with stock
free from indebtedness, get microscopic
interest in the consolidation, which is bur-
dened with something like S2500O,0O0 in
the way OF a bonded indebtedness.
The Luning Company will contest
the legality of the combination on the
ground that the statutes were not COM
piled with. The statutes provide that
street railways may consolidate, but that
the act of consolidation must be ratified
be three-fourths of the shareholders.
Representatives of the Luning Compan y
state that the promoters of the consoIida-
ton secured the written assent of a num-
Der of the shareholders that the directors
should consolidate the Central with the
other lines entering the com bination; but
they state that this is not in compliance
with the statutes, and that the act of con-
snidatiOn to be legaliZed must be ratified
by the stockholders.
It is also asserted that when the paper
was carried around for signatures emnow-
ering the directors to consolidate the Lun-
ing Company was carefully avoided.
The Importance of this factor in the
consolidation is great. Although the Gen.
trail Railway forms but a small part of the
consolidation, if it was not legally made a
part of the consolidation. as the Luning
Company. through lis representatives, con-
lend, then the whole consolidation fails,
and the bonds are not valid.
Mr.. Whittell added that though the in-
tetests be represented were small, he did
not regard that as a reason that they
should be frozen out.