The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1914-10-20
SEWARD WEBB AND
P.W. CLEMENT
R. R. DEALS
BeiEg Aired This Week in U. S.
Court
STOCKHOLDERS THINK THEY LOST
Or. Webb Is Accused Of Manipulating
Sales of Stock To Injury of
Minority Holders

New York, Oct 2O.-Dr w. Sow
ard Webb is accused OF rig
ging the stock market in 1901 in
order to pick up large block OF Rut-
land rights" below their value and
to sell them at big profit, in brief
based on testimony already taken in
a suit by Andrew c. Spring against
Dr. Webb and Others. The trial Of
the suit will begin in the United
States District Court at Rutland, W.T.
today.
DR.. Webb is accused also OF partici
pating actively in the somewhat be-
wldering transactions by which Per
cival w. Clement Of Rutland got con
troll OF the road, greatly extended its
mileage, and made large sums for
himself and associates at the alleged
expense of the minority holders. The
brief was prepared by Guggen-
heimer Untermyer & Marshall and
the suit is said to be the outcome of
a movement OF a body of about 100
stockholders, who own in the aggre-
gate more than 100000 par value of
the stock
Mr.. Clement who had been Presi-
dent some years beforeffl -; xzffi
dent of the Rutland some years be-
fore, obtained in 1898 an option on
the controlling stock interest from the
Delaware & Hudson, which then
owned It. This covered 10000
shares Of preferred stock at
$50 a. share and 10000 shares
OF common, which was to be
thrown In without additional consid-
Grafton.
This option" says the brief, was
the foundation upon which this mast
er builder proceeded to rear a unique
temple of high finance, where he
might gather large profits secretly
withdrawn from the victimized min
ority stockholders.
Having acquired his option. Mr..
Clement, with view 10 raising the
market price OF the stock, conceived
the idea OF taking in some partners
whose social and business pTomin-
ence and whose connection with large
enterprises would have a tendency to
inspire confidence in the minds of the
investing public. His fertile brain
also devised the plan of expanding
the Rutland Road by the acquisition
of other railroads and the construct
ion OF new lines in such manner as
would attract the attention OF invest
ors and raise the market price OF his
stcck-and incidentally would yield
other profits to himself and his as
rociates.
"ln the financial sky OF Vermont an
other brilliant light was rising in an
orbit Of great eccentricity. but. alasl
destined in a few years. after a daz-
cling burst of brilliancy. to become an
extinct meteor DR.. w. Seward Web.
had become allied by marriage with
the Vanderbilts He was believed to
idNt VIII llOAl-
aged people. and was skillful in mark
ct manipulation. To him Mr.. Clement
confided his plans
The result. il is said. was the form
alton VI the Rutland Preferred Synd-
icate comprising DR.. Webb. w X.
Vanderbilt. H. Mex. Twombly. Chaun-
cey NJ. Depew, S. r. Galloway and
others. who became participants in
the purchase of the stock TO the am
cunt of 1925 shares. Clement retain
ing the remainder of the 10000 and
the entire 10000 common. which went
with the preferred as a bonus. The
common he afterward exchanged for
1000 shares Of preferred. valued at
100000
After Mr.. Clement and his assoc
iates had taken control OF the road
began a series OF expansions through
the purchase OF other roads and
steamer lines and the construction
OF the Rutland Canadian Railroad.
The later was accomplished through
thu Champaign Construction Company
organized by the same persons.
Clement and his associates are &C
cused OF various sorts OF manipulate
ion in connection with these purchas
es. one OF them being a purchase by
Clement OF stock Of the Bennington a
Rutland Railroad at a nominal price
OF Ss50.O0e. part Of which was paid by
turning il in at s25O.O00 property in
this city assessed at $4,000. and its
resale TO the Rutland Railroad at the
full price in cash and bonds giving