Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-12-29
MAY SUE THE ST, PAUL
The Protests Against Stock
Sale Plan Unheeded.
PLEA OF EXCHANGE VAIN
There is Talk of Throwing st. Paul
Stock Off.
AFFAIRS ARE BADLY MUDDLED
proco,f D1op Sold m "o,L fo tho
LFFAIRS ARE BADLY MUDDLED
Present Plan Said to Work to the
Detriment of the Small
Stockholders.

individual stockholders and those by the
stock exchange authorities against the re-
fusal of the Chicago, Milwaukee and st.
Paul management to issue warrants for
fractional shares of the new stock being put
out by that road went undecided by the
officials of the road again yesterday.
Announcement was made late in the day
that the stock exchange house of White
& Blackwell had decided to call for CO.
operation among the holders of st. Paul
stock to enforce their right to obtain from
the road the full amount of the new stock
to which they may be entitled. similar
call was issued by Throckmorton, Read
& Co. 1t is expected that If the st. Paul
officials continue in their refusal to give
each holder of the stock the actual amount
of stock to which he may be entitled test
suit will be brought to force change in
the plan of issuing the stock.
The officials of the stock exchange We're
in conference with the officers of the St.
Paul yesterday trying to induce the rail-
road to do as other corporations have been
in the habit Of doing in the matter of allot-
ting new stock to their stockholders, but
the requests of the stock exchange were
refused point blank No little dissatisfaction
is felt in the financial district over the arbi-
trary manner In which the st. Paul man
agement has been treating the protests 1t
is thought in many quarters that the action
of the St. Paul management in the matter
OF thlS new STOCK issue WOulQ JUSTIFY
the stock exchange in throwing the stock
of the road off the exchange. Many of
those aggreved by the course that the st.
Paul has pursued would be glad of such an
outcome.
The Exchanges Action.
In face of the refusal of the st. Paul
road to do anything to meet the demands
of the holders of odd lots of the stock, the
stock exchange did what it could to pre-
vent the course of the st. Paul management
working an injustice to those who might
buy rights to subscribe to the new stock.
With this object the following ruling was
made by the exchange:
The basis of settlement of contracts in
odd lots of St. Paul warrants of rights to
subscribe to stock shall be the basis
established by the company.
The buyer shall pay only for such sub
scription privilege as is designated in each
odd lot warrant
Differences shall be adjusted on the basis
Of $50 for the preferred stock and 40 for
the common stock.
This was supplemented by the following
explanation of the working of the arrange
ment:
The rights on 100 shares of stock at 30
would be worth $500. The rights on ten
shares should be worth one-tenth Of s., 800
or $3.50.
But on account of loss of privilege to
get half a share new common stock on a
ten-share right, such ten-share right is
worth $3.50 less the difference between the
subscription price of par and 40 per cent
at which the half share might be sold.
If you could subscribe for half a share
new common at par it would cost you $50.
And you would get for the same If sold at
$40, $70-a difference of $40.
AS this $40 is lost by reason Of not be-
ing able to subscribe for half a share, the
price of the right on a ten-share lot at 30
is $3.50 less $50.
The loss of the privilege to get half a
share of new preferred requires reduc-
ton of $25. Loss of one-quarter or other
fractions to be figured proportionately.
Police at ST. Paul Offices.
The ST. Paul offices were crowded yes
terday with messengers and representa-
tives of banking and brokerage houses act
ing for stockholders of the road Owing
to the lack of dispatch in issuing the war
rants for the new stock the crowd so
large during a portion of the day that a
policeman was called in to keep the wait
ing messengers in line.
1t was said late in the day by one Of
those who participated in the conferences
between the st. Paul people and the stock
exchange authorities that the St. Paul,
in trying to save work by refusing to issue
warrants for fractional shares, had SO mud
died matters that 1t was difficult to see
just how the matter would ever be cleared
up. What the stock exchange wanted the
road to do was to buy or sell, as the case
might be, the fractional lots of stock to
which stakeholder might be entitled
This is the manner in which this very
question of equal apportionment of stock
among holders of odd lots has been ad-
justed for years. and the street is at loss
to understand the attitude of the st. Paul
road in neglecting to make such provision
in the first place and then in refusing to
change its plan though repeatedly urged
by the stock exchange to do so
How the Holder Loses.
Just how the companys plan works to
the detriment of a small stakeholder can
be made clear by this illustration: The
offer of new stock amounted to one-half
of the present stock in new preferred and
one-quarter in new common. A holder Of
say, shares is entitled therefore to 31h
shares of new preferred and IA shares Of
new common. On this 7-share lot the
company will only issue shares of pre-
ferred and share of common. The holder
of shares loses half share of pre-
ferred, worth in the market about $50
and three-quarters of share of COM
mon, worth s112, a total loss of 1892 on a
7-share lot of st. Paul.
AS there are many small holders, the
total lost by the shareholders through the
attitude of the st. Paul management
reaches large sum.