The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1910-05-18
NEW YORK HEARS
DIVIDEND TALK
Wall Street Expected G. & o. to
Put Its Stock on S Per
Cent. Basis.
THEN COME HOOKING VALLEY
Rceeivership Proceeding Will
Not Affect Plans for Great
Trunk System. ].

Reports in Wall street that directors
OF the Chesapeake and Ohio Railway
would Increase the dividend to 5 per
cent. caused the stock to rise as high
as IS on Monday. VI when 1t be-
came known on the New York Stock
exchange that Hooking Valley, one of
the latest acquisitions Of the Chesa-
peakc and ohio. had gon into the
hands OF a receiver, and that receiver.
ship proceedings had been begun
against the Kanawha and Michigan,
which the Chesapeake and Ohio con-
trolls with Lake Shore, the market took
a tumble with Chesapeake and Ohio
leading the decline.
The stock closed at SIS SIS, as COM
pared With a high price of SO for the
lay. Most of the other stock lost all,
or almost all, of the early gains on
Monday. Yesterday chesapeake and
Ohio stock closed at So t-2, the highest
price being sc 81.
Chesapeake and Ohio has about S.
100000 tied up III Hooking Valley
stock. the money having come from the
proceeds of the sale of $780, 900. 900 con-
Nertibles, subscriptions for which
closed last week. Spectators feared
that the directors would not feel jus
tilted In raising the Chesapeake divi-
dend in view of the chance thai the
rceivership might retard all income
from the Hooking Valley investment
for a long period.
Dividends on the Hooking Valley
stock, 1t was supposed, were relied
upon by the Chesapeake anagemcnt
to pay a large part of the interest on
the convertible bonds, that ROAD being
much mere prolific of dividend than
either kanawha and Michigan or Chi
cage. Cincinnati and Louisville, which
were also to be acquired from the
proceeds of the bonds.
1t was admitted that in ordinary
circumstances receivership of an i'm
portant subsidiary would greatly en-
barrass the dominant company. But
the Hooking VALLEY receivership was
extraordinary in hat ii was the re-
ceiverslllp of u company against which
no question of solvency was raised.
Therefore. the dominant company stood
no nance OF losing its investment,
and the most that could be feared was
a temporary Withholding OF dividends.
In the meantime non who profess
to know the plans Of the Hawley party
claim that the Chesapeake management
can pay interest on the convertibles
itplI W aoaAS 'i'u - Ai!'
management When the Hooking Valley
middle is cleared. 1t is not believed
by some Wall Street traders that the
r~eceivership viii block the plan to
increase the dividend.
The court enjoined the Chesapeake
and Ohio Railway Company from vot-
Ing stock in the Hooking Valley, and
! held Illegal the last election of the
Hooking Valley. at which Chesapeake
and Ohio interests asserted their con-
troll BY the election of the Chesapeake
and Ohio men as officers and directors
Of the Hooking Valley.
In the courts Judgment the Chcs-
apeake and Ohio vas within its rights
in buying Hooking Valley stock as
an investment, but not for the purpose
of controlling the COMPANY.
The proposed retirement Of SIS, O0o.-
600 preferred Hooking Valley stock is
also ento!ned b. the court. Judge Z Z.
at Columbus, Ohio. granted the injunc-
tion. The suit was brought by the
three minority stockholders of Column
bus-R. E. Westfall, Fred Schoedinger
and Howard d. Warrington. Mr.. Ian
nington IS secretary of the Ohio Coal
Operators Association.
The following statement has been
issued by the Chesapeake and Ohio
Railway Company, which owns a ma
jority of the Hooking Valley stock:
The plaintiffs in this suit acquired
a. few shares of preferred stock in he
fall of 1903. which holdings We're i'm
mediately made the basis of numerous
demands upon the officers and directors
of the Hooking Valley. 1t has
frequently been charged in open court.
and never denied, that the plaintiffs
purchased their stock for the purpose
OF maintaining this litigation. Tho
plaintiffs claimed thai certain transac
tions We're part OF a combination be-
tween the Lake Shore and the Chesa-
peake and Ohio to restrain competition
between the Toledo and Ohio Central,
tho kanawha and Michigan and the
Hooking Valley. and alleged that they
would be injured thereby.
I'VE need hardly say that the Ches-
.apeake and Ohio and the Lake Shore
are not engaged in any combination
in restraint of trade or otherwise"