The evening star and Newark advertiser., 1907-07-12
VOTE TO
LEASE u. E.
TO P. S.
tcontlnued from First Pneeo

views in objection TO the plan at some
length. He said his clients were of the
opinion that the statement of the company
showed 1t to be capable of earning better
than per cent. itself, without entering
into a plan to give control to a holding
company.
"The opposition of the stockholders
whom l represent" he added, ito the
making of the proposed lease from the
United Electric Company to the Pubic
Service Corporation is due not so much 10
belief on their part that the proposed
lease would actually be injurious to their
interest, but to the failure on the part
of the promoters of the proposed lease
to convince them affirmatively, that the
making of the lease in question would be
to their advantage. Until such PROOF
would be forthcoming they believe 1t to
be the part of wisdom and sound business
iudgmenN NOT to consent to n change OF
their position. The only argument In favor
of said lease seems to be this that the
making of the proposed lease would save
certain operating expenses. This argyll
ment does not appeal to the good sense OF
these stockholders, as they do not believe
that very substantial amount on operat-
ing expenses could be saved.
"On the contrary. however. there seems
to be several good reasons why the pro-
pssed lease should not be consumated.
In the first place the stock of the stock
holders would. for almost every purpose
be converted into an interest bearing GER
tificate They would be without the spe-
cial privileges of stockholders. not reap
ing the full benefits of the profits earned
by the company. and obtaining, instead,
fixed interest charge, the same as any
bond holder. or other creditor of the COM
pany would obtain. Still owning the stock,
however they would not enjoy the ao-
vantages of a bond holder. or creditor IN
having preferred claim in the assess
of the company so that they would pe
under all the disadvantages OF both stock
holder and of creditor. while not enjoying
the benefits
"Tn the next place. 1t appears that the
United Electric Company has been making
substantial earnings for the past TWO
years. last years earnings somewhat ex-
ceeding the earnings of previous years.
No good reason seems to be adVaneeu WHY
the company should not be in positlon
to continue in the increase in It's earnings
In Years to come In the next place, u
must he remembered that the directors Of
the United Electric Company and OF the
public Service Corporation are the same
persons. and the ordinary stockhoder can
not understand why it should be posslpie
for these directors, as Public Service dl-
rectors. to earn per cent. and more on
the par value of this stock, and be unable
to earn this amount as directors OIL the
United Electric Company.
"Of course. the judgment of these STOCK
holders may be erroneous. They are not
in n position to determine just what moneys
the company can make. 1t has not been
the custom of the company to submit
statements of the amount OF business
which the company has been doing. To pe
sure the books of the company have been
open for inspection to the stockholders
but the ordinary stockholder could not,
without the aid of experts, obtain any In
telligent results from an examination OF
these books, and / have serious doubts
whether the directors OF the company
would allow the stockholders to go through
their books. and spend weeks of time on
the same, necessary to obtain the desired
Information. The stockholders desire to
be entirely fair and would be willing, II 1t
could be shown to them conciusiveiy, that
the proposed lease would be distinct
benefit to them. to accept the terms, but.
In the absence of proof to this effect. they
believe their position in the matter to be
well founded.
Assemblyman Philip c. Walsh In op-
posing the resolution coincided with many
of the views expressed by Mr.. Stein. He
said he objected very positively against
the payment of the 81, 900 in dividends,
inasmuch as most of 1t would go to the
200 shares held by the Public Service
Corporation He argued that this great
sum ought to be retained in the treasury
of the company as a surplus, and that the
company could place itself on a dividend
paying basis without assistance He asked
II the stock was not a good proposition
would the present resolution be proposed.
Mr. Carleton explained that during the
eight years the company has been In oper-
alton the cost of extensions and taking
care of the growth OF the business has
cost the company $500 900, and he pointed
out that during that time>the cost of cleo
tricity had been reduced an aggregate Of
40 per cent. He said that until 1902 the
company had been operated at loss,
the reports showing Up to that year
deficit of considerable amount. In 1902
the profits amounted to $56,000. he de-
clared and each year since, under the
better financial conditions made possible
by its affiliation with the Public Service
Corporation. these profits had been great
ly increased.
After the meeting President McCarter
expressed entire satisfaction with the re-
suits of the voting.
"our STOCKHOLDERS have voted for the
lease" he said. THE meeting developed
some opposition, but not as much as we
had been led to expect. Some of the stock
holders first voting In opposition changed
to the affirmative after the statements Of
the conditions and financial history OF the
company was made by the company's
officers"
Mr.. Carleton said:
"The plan accepted by the stockholders
relieves them of all uncertainty for the
future. They get their per cent divi-
dend whether they are carried or not. We
can afford to do this because we only
have to guarantee that rate to the out
equal per cent. on the entire stock the
Public Service will be the loser. The
stockholders outstanding are safe and do
not have to worry about the future. be-
lieve the plan is more than fair to the
outstanding shareholders"
Shortly after the meeting adjourned
Frederick Evans, secretary OF the com
pany gave out the following statement;
"At a meeting of the stockholders Of
the United Electric Company of New Jer-
sey, held in its office in the Prudential
building at ten o'clock this morning, the
lease OF the property and franchises OF
the United Electric Company OF New Jer-
sey to the Public Service Corporation OF
New Jersey for a term of nine hundred
and ninety mine years was approved. On
this proposition out Of 100000 shares of
stock, 1856. 7S1 shares were voted IN favor OF
the lease and SS8 shares were voted
against it.
Outside of the shares of stock held by
the public Service Corporation Of New
Jersey. more stockholders Of the United
Electric Company of New Jersey voted