The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1912-01-24
PREFERRED STOCK
Of RUTLAND
GOES UP
Price Rose Eleven Points On
Stock Exchange
70 IS BID AND IS ASKED
Minority Stockholders Contend That
Their Stock Must Be Taken at
Majority Figure

New York, Jan. PA rise of near
ly eleven points in Rutland preferred
yesterday following smaller gains
from time to time in the last few
months, drew attention to the ar
rangements for transfers of interests
including the Rutland, between the
New York Central and the New Ha-
ven road. These transfers have
been denounced by Samuel Inter
myer, counsel for the minority stock
holders Protective committee, as con-
shutting a violation of the antitrust
ision of territory between the two
big systems.
The Rutland preferred stock which
is per cent, cumulative, and OF
which 10000 shares were issued, was
exchanged by the road in 1890 for
its common stock The accumulated
unpaid dividends upon it now amount
to 1879 per cent. 1t had been paying
2, 3 and per cent, when, in 1905, the
New York Central acquired control
of the road from w. Seward Webb
and his associates, the holdings trans
ferred being about $4,000 shares. AT.
ter the New York Central got it, II
paid l or 2 per cent for awhile and
then ceased to pay anything.
In 1906 the Protective committee
was formed by the minority stockhol-
ders. The stock, for which some OF
them had paid par, was then selling
around 2S. An English firm of char
tered accountants was put to work
on the books in accordance with the
privilege OF the stockholders under
the Vermont law Suit was started
against the New York Central for an
of receiver.
It was contended that the New
York Central and the Rutland had
been competing roads, and that the
Central was holding the Rutland in
contravention of the Sherman act,
fright in the teeth" of the decision
in the Northern Securities case. 1t
was also charged mat the Central
was defrauding the Rutland in the
division of joint rates, the Central
taking several times as much as the
Rutland got for a very much shorter
part of the haul. II was charged
that the Central diverted traffic from
the Rutland to its own lines, where
they were parallel 1t was also char
ged that the Central had turned over
TO the Rutland properties which it did
not want, at excessive valuations.
In November last the minority
stockholders learned that in the pre-
ceding February the Central had sold
half its holdings in the Rutland tol
the New Haven road at 104. AT that
time the market price was 30. The
Central also sold the New Haven a
half interest in the Boston and Al
bany. In neither case was the con
sent of the upstate Public Service
commission obtained or even sought
When this was brought out later
President Mellen of the New Haven
said IL was due to an oversight, the
fact having been overlooked that
both the New Haven and the Rut-
land were subject TO the commits
sion's jurisdiction. Last month the
New Haven made application to the
commission for leave to buy the
other half OF the Central's holdings OF
Rutland. On behalf Of the minority
stockholders, Mr.. Untermyer appheu
to the courts for an Injunction 10 pre-
vent this second purchase.
At the same time the New YORK
Central applied to the commission TOT
leave to buy from the New Haven
the control of the New York, ontario
and Western. Mr. Untermyer oppos-
ed these applications on the GROUND
that they were parts of a scheme iol
n division of territory between the
Central and the New Haven, the iat-
tor taking the Ontario a. Western ana
Leeninq a half interest In the Boston
and Albany, while the new ,s'sm
mastered the New England nelu oy
taking the other half OF the boston
and Albany and all of the hutlahu'
He also argued that the New Haven
could not legally acquire the hut'
,and because Il owned the Boston
Maine competing line, and that the
Central could not legally acquire the
Now York. Ontario and Western pc
aa,se a was competitor with its
own lines. an,ar Ia.
L..
gal noint that was n new one III
,hese cases He argued that the
public Service Corporation was ere.
ated to protect the stockholders as
we'll as the public and that since II
had authority to prevent suoh e
amsltIons II had power to NIX inc
eondlt,ons on which II would ap,
nrove them. He, therefore u.esu
Nat IL the commission authorized the
daal IL should insist that the same
terms be made for the acquisition oa
Tho minority stock as were maze ioi
that Of the controlling interest. ,,.a
This basis. with accumulated uisl
dends was 1OS at the time OF sne
nearing before the Public Service I,,e
Commission. two weeks ago, while the
market quotation for Rutland was ~.
MIR untermyer also asked ,n .'s
pros,aent Brown of the Central ana
PRESIDENT Mollen Of the New Raven
he subpoenaed, Offering to snow ny "
their testimony that the wnols nc
sns Sa was to make division OIL
serrltory in violation Of the sherman
act without passing on this reSues'
the commission adjourned the near