The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-12-31
OF THE GAS DEAL.
EAST RIVER AND EQUITABLB IN
TERESTs STILL AT LO0GERHEIDS.

THE Contract Betweeu Then stn EXISTS and
Can ne naoained only By Arbitrntien er
Pretrnoted Litiantisn = The Situation .
Uniaue One Rven in Wall street.
Wall street was very much disturbed ycster-
day over indications that the scheme for con-
sohdating tho East River and the Equitable Gas
Light companies under tho title Of the New
Amsterdam Gas Company may fall through.
The situation Va an unusual one and 1t Ia as In
~tcrestinR as IL IL unfortunate. 1t IL stating IL
rather more strongly than IL warranted by the
facts to say that tho proposed consolidation has
fallen through. There are possibilities Of pro-
tracted and bitter litigation and there are also
possibilities Of q sensible and immediate ter
mination of the differences between the two In
terests. The trouble grows out Of the manner
in which the consolidation was undertaken.
Important interests in the two companies un'
dertook to unite them and took tho initial steps
without comforting with or securing the formal
cooperation Of the officers and directors Of tho
two companies.
1t may be remembered that the first pub
lished announcement regarding the proposed
consolidation elected from tho officers and dlrec-
tors of the Equitable Company an advertised
statement that they knew nothing regarding
tho transaction and advised their stockholders
not to commit themselves to 1t. There was
Jome dissatisfaction In the East River directory,
but 1t was not as pronounced as that In tho
Equitable board, nor did 1t gain as much pub
liciy. Tho management Of the Equitable Com
pany was finally won over to the consolidation
by a modification in the plan that gave the
stockholders Of that company a larger percent
age of securities in the New Amsterdam Com
pany, and, of course, placed q higher cash valu.
alton upon Equitable stock.
In consequence of the compromise, prac-
tically all OF the shares of both companies were
deposited with the.sCentral Trust Company
under on agreement for their consolidation,
and because the requisite proportion OF the
stock of each company had been so deposited, the
Central Trust Company declared the plan Of con.
solidation operative. Since then various things
have been done which for some reason or other
were not done before. Among them ID an ex-
amination Of the books and accounts Of The
statements of those Interested in the East
River Company, have disclosed a less favorable
financial condition and a smaller earning power
than were supposed to exist when the CONSOLE
dation agreement was entered into. The rep
therefore endeavored to bring about a modih.
cation Of the terms Of consolidation. In this
the managers Of the syndicate underwriting
the plan. Representatives Of the three inter.
s est .o SS%s to % an tS Ssr sanisabl ias 6on pTaasy'h s eSs
refused to ratify the action Of their represen-
tatives at Fridays conference, or to recon-.
mend it to their stockholders. The fact that
those repre- entatives agreed to a modification
is naturally regarded as eiroIgmstantlal evi.
some,,of the objections and criticisms made by
the East River people.
The situation to-day is that an important
deal was made between individuals interested
In two corporations, and subsequently. ap.
proved by the dlreGtors 81 do t ! o cSrP Pc ,he M.
Il is said in behalf, Of East River interests
earning power OF the Equitable plant, while
the Equitable people assert that no official or
was furnished as q basis for the proposed con.
solicitation. The fact remains that contracts
ali Of the stockholders Of both companies have
deposited their shares with the Central Trust
Company under those CONTRACTS 2t S. and received M0rs.
over, there has been extensive trading not
only in the Trust Company.s receipts for The
Light Company deliverable when issued, /"
River a'd Equitable stocks in the consolida.
ton agreement. II that. agreement Is to DC
cation a good many people arc going to be put
In an exceedingly, embarrassing position and
Under that agreement the Central Trust
Company IL empowered to vote the shares o.
both ' companies xa,as lies d ss8o 9 ef t nth Ed it; + has com al
pany in favor Of the plan: but OWNS, to the
dissatisfaction and protests of the holders o.
no action in behalf of that company. Various
demands have been made upon the trust CON
pbny "lIuln IL ldoL low uuyo y ~ ahu Ao '
= do certain things.
As the trust company is simply the agent o
those who underworld to make the trade, /
! naturally does not propose to act hastily or dis
: regard the formally expires sed wishes of 1T
clients. The chances arc that the trust com
! pany will request the East River people to sub
NIT evidence that they were seriously mislet
. and deceived in making their trade with tn,
Equitable people. The und crwriting syndi
cate is interested in this inquiry because Il has
It lie understood, paid out over $780, 600 to tn,
I. shareholders of both companies who ~preferret
to take cash for their stock rather thar tn
That plan contemplated the issue Of New
Amsterdam securities early in January. but l
Is obvious that any attempt to carry out tina
, provision would precipitate litigation. which
! would only oomplieate matters stln wore. tn
plan Of consolidation. but of course will no
do SO unless sufficient, eviqence is submitted t
. 1t to warrant such action. 1t would seem, there
fore, that the simplest solution Of the situa
ton would be the submission Of all differences
:. with the evidence bearing upon the same. to tn
OF obtaining a prompt decision.