The Providence news. (Providence [R.I.]) 1891-1906, 1900-10-31
VOTING TRUSTS
ARE ILLEGAL.
Chancellor Magls's Decision in
DistlIIeries Co. Case.
FIVE HAD POWER TO CONTROL.
Stockholders Made Absloute Surrender OF
Stock TO Them for Period Of Five Years.
Proxies Not Considered Illegal.
FIVE HAD POWER TO CONTROL.

Trenton. Oct 3l-"Voting trusts with
In the big Industrial trusts were declared
illegal in an opinion handed down by
Chancellor Magic.
The Chancellor sets aside an agree
ment made by stockholders representing
SS 900 Of the s75,O0o,00O OF stock OF the
Distilleries Company OF America py
which agreement the affairs of the whis-
key trust were 10 be managed Tor hFe
years from June / last by August Bel
mont, II. jefferson Coolidge, president OF
the old Colony Trust Company, OF Bos-
ton; John l.. Cadwalader. Alvin w.
I<rech, vice president of the Mercantile
Trust Company, and William +. Harrity,
v:,e president of the Equitable Trust
Company OF Philadelphia.
Chancellor Magic has issued an injunc-
tioi, esiisining these trustees from to;-
ir., rthe immense block Of stock, on the
RroGnu that IL is against public policy 10
have the stockholders surrender their
voice i'm the management of the affairs
OF the Whiskey Trust for period of five
years and that IL would operate 10 the
disadvantage Of the other stockholders
I'm the trust
The agreement set aside was the result
OF an investigation into the affairs OF the
trust by committee comprising VIII
liam l.. Bull. William +. Harrity. Rudolph
Kcpler. Alvin w. Krech and Edward Su-
tro. which committee reported plan 10
have five men control the business of the
concern for a period Of FIVE years.
PLAN TO MAKE THE TRUST PAY.
From the various suits that have been
brought against the Disulleries Com
pany in the New Jersey courts IL would
appear that it has not been a success
financially and that this projected plan
was for the purpose of endeavoring to
make the trust GO.
The committee of inquiry recommended
that the stockholders deposit their hold
ings with the Mercantile Trust Company
OF New York for the purpose Of transfer
ring the same to the five trustees named,
the trustees 10 have full legal title 10
the same and power to vote IL for period
OF five years.
Under the agreement stockholders who
lid not turn over their stock should not
participate In any of the benefits TO be
derived from the proposed management
by the trustees. except upon such condi-
tions and penalties as the committee and
trustees should determine.
EXCLUDED STOCKHOLDER SUED.
Fiipp Krelssl, one OF the stockholders
in the old Standard Distiling Company.
OF Chicago, which was absorbed by the
trust brought the suit 10 enjoin the en-
forcement OF this agreement.
lie was not one OF the stockholders
that turned over the stock 10 the trus-
tees. His charge was that the trustees
were about 10 proceed with the election
OF officers To the exclusion Of those who
had not joined in the voting trust.
The chancellor says that Il is sufficient
10 state that the agreement discoses an
intent TO exclude the stockholders who
did not enter into the agreement from
all benefits. which he declares 10 be con-
trary IN their rights and TO public policy.
The chancellor distinguishes between a
proxy and the turning over Of stock ire
vocably for a fixed period. the former
plan being permissible.