The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1913-02-27
FEDERAL MINORITY INTERESTS FILE
SUIT AGAINST THE SHELTER TRUST

1
Monte Crsto mines.
Under the direction of Standard in
tcrests production from the Federal
mines was maintained for two years
at high pressure and. finally. in 1905.
the Guggenheims secured control by
purchasing something over 5000 shares
Of common stock from the Standard
Oil at reported consideration Of 1920
per share, although the common stock
was originally dealt out as a bonus
ferred. The quotations on common
Immediately commenced sensational
flights and in 1906 reached high level
| IF $199 on the New York stock ex-
change while the preferred ran up to
s112.5O.
| At the present time, with production
maintained at former rates, the quota
| tions stand at SIS and $50, respective
lly, representing loss in value Of no
less than $19,SOO,000 since 1906, upon
the issued capital of $12,000,000 pre-
eerred and 100000 common stock.
! The control OF common stock, which
carries all voting and administrative
power, is vested in the American
Shelters Securities company, which, In
turn is owned entirely, insofar as vot-
ing power is concerned, by the Ameri-
can Smelling and Refining company
Immediately after control had been
secured by the Guggenheims, plans
were laid to retain complete donina-
ton of the output of the Occur
dAlenes, which had then justified the
earlier prophecy that its mines would
become the most productive Of their
kind in the world. In October, 1905,
when the first contract entered into In
1903 had still four years to run Ito
September I, 1907 another contract
was prepared to take effect upon the
expiration Of the first contract and
continuing in effect for period OF Il
years thereafter. or until September
| I. 1880. 1t is this contract that is now
being attacked by the minority inter-
ests upon the grounds that it was
gnu INV IA sA'S 1~"N 'N'N~-
ests of the producing company.
The contract calls for settlement for
lead at 90 per cent of the lead in the
ore at 90 per cent of the New yorF
quotations, so long as that quotation
remains at $40 per 100 pounds or less.
II the quotation be above s4.1o. then
the smelling company and the pro-
aucer divide the difference. Other
contracts in the same district provide
for settlement at flat New York prices,
Since 1905 lead has been $40 in =
months and above that figure in -
months with an average for the whole
Iperiod Of 1857. At the time the second
contract was made in 1905 lead stood
1T 1856 and the agreement therefore
antailed loss TO the Federal of SO
cents per 100 pounds of lead or $6.17
IN every ton of ore of an average tenor
Of AZ per cent. The minority Interests
charge that the sum of $622.o0o was
lost to the company in this way during
the fiscal year ending August 81, 1912,
alone. and that the additional loss in
the four months of 1912. since the re-
port was issued, has amounted TO
1911 900.
1t is also alleged that If the present
contract be allowed to stand the
smelling company, during the entire
life Of the contract, will collect M less
than $12,6O0.OOo in excess Of prices paid
by the same concern to rival produce
ers in the same district, besides the
sum of s19.947,312 in regular treatment
charges at IS per ton. These figures
are based upon production, tenor and
average prices of 1912. The minority
also contends that If Federal enjoyed
n contract as favorable as those grant
ed to other producers the company
could earn good dividends upon COM
mon stock and maintain the per cent
dividends on preferred--a rate that
was reduced to s per cent last year. NO
dividends have been paid on common
stock since the second contract went
into effect in 1909. although as high as
II per cent was previously paid In one
year.