Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1907-01-04
MILWAUKEE ROAD
BITTERLY SCORED.
Opposition in Stock "Rights" Issue
Claim That Big Blunder Has
Been Made.

HARTFORD, Conn, Dec. 29.-De-
nouncing the action of the directors of
the Chicago, Milwaukee & st. Paul
railway in relation to the plan evolved
for subscription to an increase in the
capital stock of the corporation as ''ar-
bitrary, illegal and unjust to the stock
holders,' resolution to that effect were
adopted unanimously at a meeting of
the stockholders and others at the board
of trade rooms today.
Talk of Common Honesty"
The resolution states that in the opin-
ion of the board of trade common hon
esty on the part of the directors of said
railway company demands that to each
stakeholder shall be restored the right
of which he has been deprived.
1t requests the company to extend the
time in which stockholders may sub
scribe for or sell their right to shares of
new stock. The meeting was attended
by large number of capitalists, many
of whom made speeches condemning the
action OF the railway company
Bitter in New York.
NEW YORK, Dec. 29.-[speciaL.] J.
Dealing in Milwaukee & st. Paul
stock ''rights" have been about 100000
shares.
1t is estimated that 10 per cent. was
sold by small stockholders, and princi-
pal owners will exercise their subscrip-
ton privilege.
Great Indignat ton Expressed.
There seems to be no end to the .ex-
preston of Indignation over the method
adopted by the Milwaukee management
in financing it's stock issue. The follow
irg commentary by a well-known market
authority seems to reflect the Opposltlon
thn sub
AS piece of financing the st. Paul deal
is the most horrible botch ever perpetrated
by supposedly intelligent men. We DO not
believe that they wtllfully tried to cheat
the small shareholder, but that the trouble
was dGE to the hurried way in which the
plan wEs prepared after it was discovered
that Mr.. Hill had brought his request for
$3.50, 900, 900 of new capital to Wall street
bankers.
Stock Exchange Explains.
The following statement issued by the
New York stock exchange gives the I'M
Outstanding of the authorities of that in
stitution as to the rule which must APP
ply to subscriptions for st. Paul war
rants:
The rights on 100 shares Of stock at 30
shares should be worth one-tenth Of $4,000,
or $3.50. But on account of loss of privilege
to get one..haif q share new common stock
on ten-sh&re right, such ten-share right
is worth $3.50 less the difference between
the subscription price of par and 40 per
cent at which one-half share might be sold,
or if you could subscribe for one-half a
share new common at par it would cost You
$50 and you would get for the same, If
sold at 49, $40, a difference Of $40. AS
this $40 is lost by reason of not being able
to subscribe for one-half a share, the price
Of the right on a ten-share lot at So is
$3.50, less $40. The loss Of the privilege to
get one half share Of new preferred re-
quires the reduction of $25, loss Of one
fourth or other fractions to be figured pro-
portionately.
Big Losses to Somebody.
There are 1 100000 shares of st. Paul
stock outstanding. If SO per cent of this,
or 100000 shares, should happen to be
happily held under this financing propo-
sition by men like J. Ogden Armour,
with $4,000 shares, or Mr.. Blank, with
10000 shares, they stand to lose nothing,
but get the full benefit of the subscrip-
ton terms. But if the balance 100000
shares, are held among men each of
whom holds five shares, they lose the
right to subscribe to about 100000 shares
of new stock. The loss of these men
must reach, therefore, several million
dollars.
The excuse given for this alleged con-
fiscation is that dealing with fractional
shares would cause a deal Of extra
clerical work, which would make a diff
ferent plan impracticable.