The Caucasian. (Clinton, N.C.) 188?-1913, 1897-09-16
FRAUD I'm THE NINETY-NINE YEAR
LEASE.

MARION BUTLER.
FRAUD I'm THE NiNETY-NINE YEAI
LEASE.
The lawyers for the State, in tn,
lease trial before SimontOn's Specia
Master, have shown how the State
money was spent to defeat the State
interest, by the Elias Carr Directors o
the North Carolina railroad. Eigh
out OF twelve of these men were an.
pointed by Governor Carr to repre-.
sent the States interest. They were
trustees for the State which was and
is the owner of three-fOurths of the
stock-that is three million out Of -four
million. These men were also owners
In their own right of very consider
able amount Of private stock. They
knew that at the expiration of the lease
the State might conclude to sell it's
stock. The block of three millions
owned by the State would be wanted
by the Southern Railroad or by the
Seaboard Road or by any purchaser
who might want the control of the
property. The State had the majority
which gave the voting power that
railroad managers always want. This
majority power gives them the ALSO.
Lutte control. 1t enables them to fix
yates, to appoint all the officers, agents,
employees and to fix all salaries. II
gives them the power to wreck the
minority stockholdera-- Il gives them
the chance to use the whole property
interest for the benefit of not all the
stockholders but Of those Who own
the majority Of stock, consequently
1t frequently happens that stockhold-
ers in railroad, seeing that it Is want
ed by some other railroad, get togeth-
er, procure majority of the stock
put into what they call pool and then
sell 1t, all or none to the purchaser
whose object is to get the control. In
this way majority stock frequently
brings a big Price while minority
stock will bring little or nothing.
Take for example the sale of the ma.
jority stock Of the Carolina Central
Railroad. The total stock was twelve
hundred thousand 81, 2OO,OOO) dollars
Certain operators on Wall street pro-
cured just a bare majority and sold it
to the Seab0ard for one hundred and
ten $Ql0,) dollars a share. On the day
after the sale, the minority stock
(Which was just little less than one
half of the totally would not have sold
for ten $4,000 dollars a share.
Jay Gould epitemised the law
and the practice of corpora
ti0n managers when he said that
"there were just fifty-one shares in
every corporation that are good and
just forty-nine that are worthless"
Now these trustees for the State
stock, owning private stock o. their
own, some of them in large amounts,
were fully aware that if the State
should sell its stock to the Southern
Railway at a big price, their own pri-
vate stock would become badly depre-
ciated. Why9 Because these lovely
and heightened allies of theirs would
proceed to manage the road for their
own advantage, to pay themselves hi Oh
salaries and to run the road for the
benefit Of the Southern Railway. In
other words, they were afraid that this
Southern Railway crowd would turn
on them and rob them. Hence the an
xiety Of these private stock holders to
be yoked on to the State and to fix
things SO that the State could not make
aprofitable disposition of it's own stock
without taking care of them. And so
it is apparent that these trustees of
the state-that is, directors, appointed
solely for the purpose of looking after
the interest Of the State and of making
its stock as valuable as possible-had
aprivate interest directly antagonis-
tic to the State. Ifthey acted for the
best interest of the state, they struck
ut their own property; if they acted
ior their own private interests as to
their own private stock, they struck at
the State.
Their conduct in the whole business
shows that most Of them were think
ing about their private stock, that they
were crazy to put long lease on all
the stock, so As to make their own call.
ing and election sure, while at the
same time they were striking a despe-
rate blow ct the Treasury and the tax
payers OF the State. An ordinary trus-
tee would not be permitted, in dealing
with the property of his beneficiary to
have private interest antagonistic to
such beneficiary, and IL he did have
sucA and made . transaction detri.
- TO his beneficiary, the courts
declare it fraudulent, and set i,