New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-03-31
S. P MAY PAY DIVIDENDS
Arguments on Bill of Equity TO BE
Heard Neat Month.

A day early in May has been set. it was learned
yesterday for argument the bill in equity filed
on Friday in the Circuit Court Of Austin, Tex, by
General Thomas H. Hubbard and the Croker
Estate Company asking that the Southern Pacific
Company be restrained from paying dividends and
petitioning for other relief There Is. therefore
no obstacle in the way Of the payment this week OF
the semi annual dividend on the Southern Pacific
common stock. The following statement In reply
TO the allegations Of the compliments the
tion brought in the Texas courts petitioning, as
owners OF second mortgage bonds Of the Galveston,
Harrisburg & San Antonio Railway Company, one
OF the proprietary companies OF the Southern
Pacific system was issued yesterday by the South
ern Pacific Company:
The Galveston. Harrisburg & San Antonio Rail-
way COMPANY, Is a Texas corpora ton. which owns
The Southern Pacific Company owns its stock, but
does not possess operate its railroad as it does
Of one exS prohibit n aqS from mo ops
ating railroads in that state but not from owning
mortgage bonds covering that portion Of the road
issued in 1851 to construction company building
that portion of the line, and through the construc-
the Humnson Crocer Stamford mG a ne opkns
interests then III, IN control OF both companies The
earned and the semi annual defaults and the great
with the marketing Of the s per cent bonds upon
the same line which were held by the owners Of
interest 20 waive the obligatory feature and the
unpaid interest ana . convert 1T them into mere in
of the bonds the following provision viz:
and provisions thereof is TO be due oniy on Jan.
uary l OF each year until the payment OF the
such rate mot exceeding in event per cent
Galveston, Harrisburg San Antonio Railway
Company IN each year, ending on July next
OF the annual interest hereon. shall suffice to
pay upon all the bonds Of this issue outstanding
on January l. After first paying from the
ngs and Income Of said company the expenses
of keeping up and maintaining the same with
their appurtenances. and all improvements addi-
for psoviding and keeping up suitable equipment
bsines s and aaips an3 SG eopang yr
porate organization. and after likewise paying from
from time to time upon the bonds Of this COM
pany known as the first mortgage eastern d.
vision bonds, second mortgage eastern division
bonds and the first mortgage Mexican & Pacific
extension bonds, which may be from time TO time
scribed TO be paid to or toward sinking funds for
And II n any rate the amount as ascertained
ana determined by the board Of directors of said
or such annual interest the bonds OF which this
full payment Of interest at the rate Of per q cent?
thereon the amount OF such deficiency. whether
made up out OF any surplus income OF SUBSEQUENT
years but shall be absolutely waived, relinQushed
There has been absolutely no change in the
bonds parted with their control OF The road More
over. the accounts are kept in strIc: accordance
scrutiny of the Railroad Commission Of Texas
MuGn OF Jne te,rltofy tIaversed by the lire Is
on these bonds. There has been annual deficit.
which. however has been lessening. and the South
ern Pacific Company. TO protect its interest in
the stock has advanced from time to time the
money necessary 10 make the interest on the
first mortgage bonds. which IS obligatory. and
make the improvements necessary the road
for properly handling tho transcontinentai bust
ness. The road has never contributed n dollar to
company. The. Southern Paciac C'ompany has
never guaranteed nor in any way become botnd
70 pay interest these income bonds OF the
Texas company. and Just what obligation. legal
or moral. II is under with respect TO them. par
ticularly In the hands OF those who issued them
and then slammed on them the provision above
Company dividend has with them. We arc unable
10 say