The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1912-02-09
The Rutland's Minority Stockholders.

Evidently the minority stockholders
in the Rutland railroad have found a
friend in the New York public SER
vice commission, second district. The
deal between the New York Central
and the New Haven systems. where
By the remainder of the Central's Rut
land stock, carrying control of the
road, was to be bought by the New
Haven, has been held up for the sub
mission of additional evidence justi-
flying the arrangements. The com
mission is DESTROYS of more informa-
ton before sanctioning pact under
which the majority OF control can.
easily and without such violation Of
law as could be prevented by the
courts. Cypress the minority In carry
ing out the plans Of the majority con.
troll as to its entire system" The in
terests OF the Rutland's minority
stockholders are not the sole consi-
deration moving the New York public
service commission, but II is pleasant
to observe that they are not ignored.
The story OF the Rutland's minori-
" stockholders runs back about 10
years. In 1901 and 1902 the Rutlands
preferred cumulative shares. which
had been Issued in large part TO re-
tire the common stock, were selling
as high as $l25 a share and getting
4 per cent dividends. About that time
the New York Central began to get
control of the line through the cleo
ton OF its directorate OF the Rutland.
Very soon the two roads had the
same president vice-president, coun-
sci and general traffic manager In
1905, the Central acquired actual pos
session through the purchase Of 81
per cent of the preferred stock. The
year before, however, dividends had
been entirely suspended, and the Cen
trial got In cheap.
Rutland prferred was selling at
SOS a share when the minority stock
holders organized. hired lawyer and
started out to make the Central pay
up the back dividends due them. II
may be said right here that these
back dividends on the cumulative
shares amount at the present time TO
1873 per cent Suit was brought in
the United States circuit court OF
New York in behalf OF Che minority
and much evidence was submitted
showing how far the Rutland had
been squeezed by the Central for
the exclusive benefit OF the owner OF
the 81 per cent block Of stock. Evi.
/ dence was submitted in $50 cases
proving that In the division OF freight
charges on shipments carried by both
systems, the Central had appropriat.
/ ed inequitably the lions share.
Among those cases are the following:
On a shipment OF marble, hauled by
the Central II miles and the Rutland
l67 miles, the charges OF Sl6.4O were
divided equally between the two
roads. On a shipment OF lime which
the Central hauled ~ miles and the
Rutland 40. the Central got Sl795 and
the Rutland only $3.50. On ship
ment OF -four which the Central haul
ed 10 miles and the Rutland As miles
the Central pooketed SiS12 and the
powerless Rutland Sl2.0S.
The expert who drew these 100
cases from the company's own rec
ords testified that there was every
indication that this unequal and un
fair division Of earnings had gone
on throughout the period Of the Cen
trails control OF the smaller line
stu another pleasant way the Cen
trail had OF preventing the Rutland
from earning dividends for the mi
nority stockholders TO squander was
to divert freight originating on IN,
Rutland to the lines OF the Contra
before TIE Rutland had completed Il,
natural haul. No less than il5 ex
amples OF that practice were put II
b evidence. For instance, certain
carload Of lumber starting on IN,
Rutland would naturally have n hau
, OF 2g2 miles before being deliyerc,
, to the Central but Il would be actual
, ly diverted to the Central after a hau
, OF only u miles. This was process
Of preventing the Rutland from dolnl
the work that belonged TO Il by virtue
OF It's route Because OF these alleg
ed unholy practices the Rutlandi
minority stockholders demanded pc
ouniary satisfaction.
II was not Icing after this suit wat
begun that the New Haven company
bought part Of the Centrals holding
In Rutland preferred: and last au
tumn. In the big deal involving th'
Ontario and Western. the remainde
OF the Centrals shares were sold 4