New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-12-19
GOULD DIRECTORS ACCUSED
CHARGES BROUGHT BY AN ELEVATED
RAILROAD BONDHOLDER.


HE DECLARES THAT OVER si"o.OoO IN rNEARNED
DIVIDENDS HAS nrEN PAID. AND HE ASKS
TIE ATTORNEY GENERAL TO PROSE
CUTE SUIT FOR REsTITU-
TION AND THE REMOVAL
OF THE DIRECTORS
Albany. Dec. 1S.-Whether the Manhattan
Railway Company. of New York City. is paying
part Of its dividends out of hundreds of thou
sands Of dollars Of borrowed money is question
which the Attorney General of the State has
been called upon to determine. He has been
asked to begin action to Gus; the directors or
the Manhattan Company. which owns and oper-
ates the elevated railroad system OF New YORK
An application made to Attorney General
Hancock to-day. requesting him to begin an ac-
tion against the directors for judgment. compel
ling them to pay back to the company the amount
Of money paid to the stockholders In dividends
in excess of surplus profits, removing the direc-
tors from office and restraining them and their
successors In office from declaring and paying
dividends in excess of the profits of the corpora
tOn.
The application is made by Mortimer Hen
bricks Of New-York City. who is a bondhoder In
the company. Mr.. Hendricks was directed 10
serve notice of his application on the directors
and hearing set before the Attorney-ien-
eral for next Wednesday. Mr. Hendricks asserts
that in the year ended June 80. lS''' the
company paid 81 SOO.OoO dividends which was
S211 9J1 in excess of their surplus profits. ana
that in the year ended on June 80. lS". the COM
pany paid the same amount Of dividends. which
was StiS1 9D2 in excess Of the surplus profits lie
saws that since June 80 1896. the directors de-
ting 70 ~
600 although the net income was only Sl4'ooo
He asserts that the earnings of the corpora
tion have not been sufficient in the last TWO
wears to pav the expenses Of operating the
road it's fixed charges ard the DIVIDENDS on
the stock by about 81 1O200o0 and he charges
the fac, to be tha: the excess Of dividends over
the profits has not been paid out OF the sur
plus profits but out of loans made by the cor
poraton and that thus a debt was created
to nav excess dividends amounting to over
81 100000
The directors whom Mr. Hendricks desires
the Court to remove from office are George o.
Gould Edwin Gould. Howard Gould Russe"
Sage Thomas T. Eckert. Samuel Sloan. Robert
NJ Galloway. Donald Mackcy. Joseph Eastman
A. l. Hopkins. c. + Morosn Warren b'
smith and John J. Terry The officers of the
connanv are; President. George J. Gou'i; sec
rotary and treasurer d. w. McWilliams gen
eral manager, ". J. Fransioh. Ihe o"p''''
stock of the company is S30.OOO.oOo.
In his petition to the Attorney-Genera'' MI
Hendricks says that he is the owner oi oo'us
issued by the Manhattan Railway Company "
the face value of $1,000. which are Seco"u
lien upon the elevated tracks. rolling stoch an"
equipment. In support OF his chaise 'n'' -"
dividends for lS9J and 1896 were not paid out oi
surplus profits. he says
I, ,,ears from the reports 1895 and 1896 on the
general balance sheets OF said reports th, MAJ '1 me %
plus profits made 10 appear by dedustnE ,e ,b@y
appear o., the books said company being the sur
plus In each year the cost OF roau n, % ~ ssets
charged against said company; az p,S M as cot Of
The Items cos e e, r9ai' ~ s0nh ss h Items arS
Cost of road :5S 392 iSi Il: cost ot eqHpmshn,;
a. legal eXpenses'" which in the years 1873
and 1856 aggreea,ed over 500 90. dlscounts ana IN
ierest eha1sea 10 orr oc land damae
which during said ysn+ @ssShcSh ~ TShch sad company
has been put in acquiring H. to s rE& ma r-f prT
imc'aed n nS, Your n % petoner alleges that expense
are not and should ~; be included tncLrn; nc1n;
an asset but only lis present value tha me wear
and the equipment Of SAID ROAD ana s %on
the value of said road ana It's ePiip9N' tnat YOU.
petitioner knows the value OF sa'a a1a Wn neti
iisnefs jmdgment such road is worth not TO exceed
Your petitioner further states that the surplus
nrodis reported June 30. 1875. aforesaid were 81
a 9i - and on June 30 1895. $G63Si2 .. hat II the
expense OF obtaining the tie TO said road other than
the cost of tangible property rs deducted from SAID
j,em Of asset the sO-called surplus would entirely
disappear and that If the actual value OF SAID road
and lis egupment empl Dyed rather nan It's cost
The ca pal said company in your petitioners be-
lief would ne impaired -
Your petitioner further states that the sad report
Of lime 30 1896 shows liability Of loans and bills
payab!e $4,000" but no corresponding lteIn aI-
pears in the repor! FOR @ ana Inc ,a amar, W
and bills payable 81 065,Vn an increase oi H'"W"
in three months: and your petitioner accordingly
over the profits has not been PAID out OF surplus;
hlt ont of the loans made by said corporations ana
that said debt created TO pay SAID excess dvl-
Your potitioncr further states that the earnings
Of said corporation have steadily decreased for seN-
cral years last past whle tnr cos Oh IN mnlt''il, u,
o % .nnears bv the reports of 1898 and 1895 OF said
company and that II said directors continue to DC.
said corporation. the debts OF said corporation VIII
Continue 70 Increase aforesaid: that the said cor
noraton maintains sinking fund. that its assets.
exclusive OF cost of road ana equipment. as SHOWN
~ 10 renort of September &c. 1896 amount To but
ts iea 10 a. that your petitioner verify believes that
,hc oct,lai value OF the property OF said corpora
'io1 ~ indeed be adequate to satisfy the
,,nn of The funded debt Of said company which
first lien @Falns1 s Of isd reeor a cosy
threatens and actually nlpafs me security OF yoir
,n,,,oner and other holders OF The bonds OF said
company.
, rrih,ne reporter called at the homes OF several
- ,ha directors OF the Manhattan Company last
,h, hut was unable to see any of them about Mr..
Uendrickss application.
AZ INGENIOUS WAY TO STEAL.