Every evening, Wilmington daily commercial., 1918-03-20

cash, and the Anglo. French bonds
not converted into cash, received
by them as aforesaid 1t will not be
necessary for the Company To pay
anything to the defendants, for they
have been repaid in cash more than
the amount paid by them, with in
terest, for said stock purchased from
+. Coleman DUPONT"
The tact was urged prior To the entry
of the interlocutory decree IA "A reason
why decree should be entered for the
complalnants without referring the
question to the stockholders meeting
upon the ground that a question of bust
ness policy no longer existed. IL may
be desirable to rcstate some of the cir
cumstnnces surrounding the purchase OF
the stock in their application TO the
rights of the Company. The Powder
Company was not engaged in buying and
selling its own stock II had under its
charter the right, through it's Board OF
Directors, to purchase its own stock and
1T had at the time when Pierre :. DUPONT
purchased the stock sufficient available
funds to pay for it. so far as the evi-
dence shows, however, the only trans
action involving the purchase of it's own
stock which had ever come before the
committee OF INt bttIu VI III
reetors, with the exception Of small pur-
ehases for bonus purposes, was in rela-
tion to the purchase of the 10000 shares
from +. Coleman DUPONT for the purpose
of distributing il among the employees
at cost. If I. Coleman DUPONT had never
made the offer, or If the offer had been
finally rejected, Pierre s. DUPONT would
have had the right to purchase all of
4 a a. "A n q al. ,.4 -, its.a.a f,f
|, any other stockholder In whatever
amount and at whatever price he saw fit.
and the Company could not have claim
cd the right to take the stock from him.
or TO make him accountable for profits
upon it. The offer of Coleman DUPONT
and the negotiations committed TO Pierre
:. DUPONT had no purpose of profit to the
Company through increase in value and
no other purpose excepting obtaining the
stock iur distribution among the more
important employees Of the Company
The Company had never had under con
sideration the purchase of more than
the 2o,'W shares nor price per share in
cNrcss nt $3.50.
About Foreign Contracts.
"lf Pierre :. DUPONT and his associates
had taken for themselves while acting
as officers and directors Of The company
II contract with e foreign government for
the manufacture and sale Of a large
quantity of explosives, that cont ract, be-
ing of the same character and with the
same parties as the contracts carried on
IN the ordinary business Of the company
without any necessity for action by the
board of directors or the stock holders.
would probably have been held in equity
an asset OF the company and a minor
ity stockholder would have been entitled
TO a decree for the transfer Of the con
tract to the company. or. III case the
contract had been carried out. for an &C
counting of the profits for the benefit of
he company. nlcsS special circunstHn
ccs existed, such a the inability of the
company to carry out such contract be-
cause ot Inadequate capltak inadequacy
of plant. or some such reason, no quc@-
tion Of business policy would have re-
qInrcd Il vote oi the poard Of directors,
or stock holders and 10 vote Of directors
interested in preventing the company
obtaining the cont ract, and no vote Of
the ma jority stockholders would have
been permitted to interfere with the
right ot the minority in that asset of the
company.
The acquisition Of this large block 81
stock, without any definite purpose
to it's disposition. would have been an
innovation in the business policy oi the
Company, and other questions are in
volyed than that OF the immediate en-
richment OF the corporations treasury
and the probable immediate increase in
the value of the holdings Of the indi-
vdual stockholders An individual
stockholder, whose only interest Was
the ultimate value of his stock a Al
dividend paying investment, might Well
have paused 10 consider at the time the
purchase was made in March. 1918.
whether il would be Wise policy for
the Company in the circumstances that
then existed 10 invest its FUNDS in snch
large number of its OWN shares. with
out any definite purpose as to thell III.
ture dlspostion. and IN August. l9lI.
when it had appeared that the Company
could acquire the stock without paving
any money out OF its treasury, he might
reasonably consider various phases ct
that same question. lie might a. a ma, :
ter OF policy reasonably desire that the
control in the management under which
he had during the continuance of the
war seen an immense growth IN the
business vi the Company and large
profits in the shape oi dividends paid to
the stockholders be made more firm by
permitting the stock 10 remain III the
hands OF the defendants. The Court ciln-
not say that the business success OF the
corporation is merely II result OF war
conditions and that the management OF
the Company's affairs by the individual
defendants in their official capacity is a
fortuitous circumstance disaSsociated
Eith the causes of the Company's ste
cess The stockholder NAV we'll have
considered that the management con
tributed TO or caused the Company ;
Success The stakeholder might reason
ibly consider questions OF business pol
icy relating TO the disposition OF the
stock which would arise after its ac.
QUESTION. Should it be held for rise in
value and sold at profit Should il be
distributed at cost to heads of depart
ments and employees under the bonus
plan? Should ii be held in the treasury
and the dividends earned distributed TO
| the remaining stockholders Or should
| il he retired reducing the outstanding
capital Of tho Company The increase
| or decrease of the capitai stock ,of cor
porations Is the subject OF statutory
regulation under the laws uf most Of the
states. aid, under the laws OF Delaware
| and III New Jersey. Is dependent upon
the decision OF the stockholders At
| meeting. duly called for thc pun csc
after favorable action by he board
directors. 1t i essentially Il question
OF corporate business policy. And the
power to purchase its oNn stock Is con.