New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-05-19
Minority Stockholders Sue
to Enjoin Merger with
New York Central.
uIEGE VIOLATION OF
LEASE AGREEMENT
vm Rockefeller, q. F. Baker,
VIM. X. Vanderbilt and c. NJ.
Depew Are Directors.

u,uiam Rockefeller, George r. Baker.
u-eian X Vanderbilt. Chauncey NJ
o.c,v and other directors OF the New
yoTk Central and the New York & Har-
Ian Railroad we're named as defendants
!. shernan law injunction suit filed yes
.,r5ay IN the federal court by the minor
~ stockholders Of the Harlem road TO
a-.vent its consolidation with the Cen
,-,i They allege that they have been de-
r,yded Of their rights and that consoli-
;.,ion is proposed by the directors OF the
central to avoid paying s. a share semi
annually 70 the stockholders OF the Har-
arm n accordance with the agreement
,sse when the Central leased the road in
81
his also set forth that the Harlem is
,stural competitor OF the Central in In
,srstste Commerce and that the proposed
eonsohdaton is in violation Of the Inter
state Commerce act. The petitioners and
,ser shares Of Harlem stock are:
John Scott Bayd Colorado. 81; Sallie
Howard Gill. Great Britain. 27o0 Samuel
u. Heller. san Francisco, 80; James +,
robertson North Carolina &c; Alexander
r Robertson. Virginia, &C.
7, is alleged that when the Central
leased the Harlem for 4o1 ytars the Har-
lAn road authorized a Sl2.0oo,ooo bond is
SIZE. on which the Central agreed 10 pay
interest and permitted the Harlem the
,isht 70 sue FOR profits. The result was,
thef aver. that Harlem stock became
Kilt odged investment, on which the Gen.
rails payment in .S9S increased per cent.
This IS the way. according TO the plain
uns. the Central asquired control OF the
necessary two-thi,d Of the Harlem stock
i, order 10 get the consent OF the Inter
state Commerce Commission 20 the mer-
ss- william X Vanderbilt, PRIOR 70
aprD 1. 1912, owned 1957S sharse Of Har-
lem stock. William X. Vanderbilt, IT.
IA. Chauncey NJ Depew. 90, and aJmes
s,lu-.sn. 100. William Rockefeller held
tsa7 and r. w. Vanderbilt 100 additional
shares which belonged 20 the Central
sturan and W n. Newman between
them held 130 shares in a similar manner
After April J, 1912. it is alleged al! this
stock was turned over TO the Central and
spDlcation was made 10 the Public Ser
vice Commission for privilege 10 purchase
Harlem stock not in excess Of SO a snare.
The petitioners alege that THIS was q
violation Of the lease agreement and In
fraud of their rights.
After purchase permission was grantee
N December. 1872 the Central held l2Z'so
shares of Harlem stock AZ $3.50. which the
petitioners assert, was the price suggested
bv the Central and not the price fixed oy
the Public Service Commission.
According TO the plaintiffs. the Central
suddenly withdrew its offer OF 1850 there
f, intinating that the stock could no
longer be obtained at that price, which
brought a rush Of buyers with the result
that by the end OF the year the Centrai
acquired !. 500 more shares. With the CO.
o7eration Of stockholders who were ideh-
,qed with the interests Of both roads, the
plaintiffs auege, the Central got the nee
.ssary two-thirds control against the pro-
tests OF the minority stockholders.
"Ttis was a scheme" the petitioners
assert. to perpetuato control over rail-
road which at least is a potential com
netitor in Interstate Commerce by fTaud
and against the right Of the minority
stockholders TO extinguish the lease under
which they secured permanent net IN
come OF 10 per cent and will relegate them
10 the position Of stockholders in com
psnv denuded Of all its properties and
Sgbts and compel them TO take stock IN
consolidated company on terms fxed oy
the directors OF that company and thus
give I'd A fixed income for stock when
can r,a- antee no certain return"