The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-06-20
An English Corporation Awarded q
Heavy Verdict Against q Ten
nessee Company.
JAMES BARRETT ON TRUSTS
CAUSE OF AGRICULTURAL DEPREs-
SION IN THE SOUTH.
Industrial Commission Informed that
Railways Are "Both the Daddy
and Nanny Of Trusts"

PHILADELPHIA, June 19.-In Chancery
chambers at Camden. n. j., to-day, at
torneys for Walter r. Kern, of this city,
filed bill with Vice Chancellor Reed,
asking the court to restrain the Federal
Steel Company from paying any dividends
on the common stock at present, and es-
pecially to restrain the company from pay
ing the quarterly dividend OF Ia per cent.
on the common stock that the directors de-
clarcd on June is. payable July 20. Kern
holds $4,000 of preferred stock. The vice
chancellor granted temporary injunction
against the payment of any dividends on
the common stock until the further order
of the court, and ordered the Federal Steel
Company TO show cause in the Court Of
Chancery at Camden, on July 3. why a per-
manent injunction should not be issued re-
straining absolutely the payment OF any
and all dividends on The common stock until
after the close Of the present fiscal year.
In the bill Mr.. Kern states that the char
ter of the company provides that the hold
ers of the preferred stock shall be entitled
to receive noncumulative dividends at the
rate OF, but not exceeding 6 per cent per
annum for the fiscal year beginning Jan. l.,
1899. and that this dividend must be paid in
preference to any dividend on the common
stock during this year. He asserts further
that the charter provides that the common
stock shall be subject to the prior rights Of
the holders of the preferred stock, and that
the dividend on common stock cannot be
paid until after the close Of the fiscal year
ending Dec. 1. 1899, and then out Of the sur
plus profits that then appear to have been
made by the corporation. The bill alleges
that the existence Of surplus of net prof
its cannot be ascertained until the end or
the year and that any declaration or at
tempted payment Of any dividends upon the
common stock before the end Of the year is
manifestly contrary to the terms of the
company's charter and detrimental to the
rights of the preferred stockholders.
Mr.. Kern's counsel stated in court that
efforts had been made to obtain a copy Of
the resolution adopted by the directors or
dering the dividend, but that they had been
unsuccessful, and the information regarding
the text of the resolution was, therefore.
based on newspaper reports. He also as
serted that holders of $3.50 100000 of the pre-
ferred stock join with Mr.. Kern in the
issue. The capital stock Of the Federal
Steel Company is 500. 900. 900. one-half pre-
ferred. the other half common stock.
How the Company Views the Suit.
CHICAGO. June 19.-The injunction asked
on behalf of the preferred stockholders in
the Federal Steel Company to prevent the
payment of the dividend declared on the
common stock is looked upon by the officers
of the company as being of little Importance.
The bill for the injunction has not been re-
ceived in Chicago. but one Of the officers
said he understood the preferred stockhold-
ers objected to the payment of the dividend
on the ground that the company might not
be able to pay the full dividends on the pre-
ferred stock this year. He said the company
had set aside out Of its earnings a sufficient
amount to pay the entire dividend of per
cent. for the year on the preferred stock and
that for this reason the preferred stock
holders had no grounds upon which to osk
for any injunction