The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-11-26

profits after deductinz all expenses Wnlcn
statement shall be made under the bath OF
the officer whose duty IL shall be TO make
the same"
THREE REASONS GIVEN.
The court finds that there are three rea-
sons why the State is entitled TO receive all
profits accrueing above the return or In
vestments to stockholders and the annual
dividend Of Is per cent. These reasons are
as follows: b
'First-The irrevocable right to Is per-
centum. expressly conferred. negatives a
~Second-The faithful account of con-
struction. of expenses and receipts, required
by Sections p and 80. and the mandatory
language employed in dispOsing OF the
surplus IMPLIES the contemplated exis-
tence OF a substantial balance. 1t seems
entirely improbable that the Legislature in
tended the mOckery Of providing for the
payment to the school fund of the fraction
remaining after that body had adjusted the
tariffs OF the company so that the net earn
Bngs should be just 10 per centum OF the
less
''Third-It is clear that the lawmakers
considered that under their liberal grant
the time might come when the corporation
would be receiving larger profits than were
Just. and when that time arrived. II ever,
Pny earnings in excess of fairness should
De ~relinquished by IL. The limitation that
entered into this consideration is stated
as affecting the periods both before and
after full reimbursement Of the builders,
and IL seems incredible that the leglsla-
tors should deem IL expedient TO declare
their sense of What was just and falr 60
the shareholders and State, dispose OF the
then provide. or leave for construction, that
the cOmpany's right TO the unjust excess
should accrue by legislative %inaction on
the subject Of regulating its tolls (
MEANING OF TERMS.
THE fight of the ~ltigants was over the
meaning of the terms in the section Of the
charter of 1S47 quoted, full sum invested
and capital employed" The State insisted
that the terms embrace only such sums as
we're contributed directly by those who
surchased corporation stock to construct
the road and the sum paid for bonds that
were issued and used for construction and
subsequently, converted under their pro-
visions into shares OF stock. The amount
aggregated $l,2l6, go under the construction
the State put upon the matter. The rail-
road maintained that the terms mean the
full cost OF construction and equipment,
whether contributed directly by the stock
holders or taken from the earnings of the
road, amounting to 1885, $50. The amount
in dispute. therefore, was SD, $50, and the
decision of the court was that this should
go TO the State.
The opinion says full sum invested and
capital employed are used synonymous
~, but that fall sum invested" and cost
of the road" were not used by the Legisla-
ture as equivalent terms.
1T was never Ontemplated that earn
tngs. In any form, should become a part Of
the full sum invested in the sense that they
should be returned with 10 per cent. inter-
est, and. therefore. be entitled to IL per
cent. annual dividends. Such reasoning
leads to an absurdity," says the opinion.
viii it be seriously commended" Judge
Hadley asks, that the General Assembly
conferred upon the corporation power ar
bitrarily to settle for itself and for the
State what should constitute the full sum
invested? What operating expenses, and
what a reasonable sum for future cOntin-
gencies? IF IL did. in the doing of il it
must have known that it was sheer folly
10 provide for the payment of a surplus TO
the State. To hold that it was given over
10 the company conclusively 10 resolve as
against the State. after the road was put
In operation. that all betterments, extern
sions and extraordinary improvements paid
Tor from the earnings, and bonded indebt-
edness incurred for construction. but maid
from the profits, and divers other items
tnat represented not a dollar used in the
construction OF the road, may be. at the
pressure OF the company, capitalized,
counted and refunded as a part of the full
sum Invested within the meaning of Sec
ton %, is equivalent TO holding that il was
the legislative intent to place il wholly
within the power of the corporation to de-
1eat the States right, by avoiding the ac-
cumulation of a surplus. The facts of this
case illustrate the absurdities to which
such a construction of the statute will
lead"
-UNDIsPUTED PROFITS.
The court finds that the Vandalia, from
1852 TO 1879. had an undisputed profit over
and above the payments of expenses and
dividends and that the surplus in 1869
amounted to s1.O49. S5. The opinion con-
tinues with the discussion of the surplus
and presents figures showing the finances of
the Vandalia for the time given.
THE surplus referred to was at the time
Chiefly invested in proft-bearing bonds
and stocks, and the company, doubtless