The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1918-01-03

, statement at-such meeting which sci
: forth the situation fairly and fully
, and gave the reasons for the extension
agreement and which disclosed the
, fact that the smelling company al
/ that time was in control Of the Fed
eral company through the ownership
of a majority of the common stock
which. as 1t appears. had been bought
by Daniel .Guggenheim from John ID
Rockefeller, George Gould, Charles
Sweeny and others in March, 1905
The price paid for this stock was $120
and Mr.. Guggenheim bought all the
stock offered to him at that price
Certain Of the plaintiffs herein voted
in favor of the said contract through
their proxies. The contract which
the Bunker Hill & Sullivan Mining
company had made with the smelling
company was in fact, as Mr.. Sweeny
had represented tia contract for the
sale of its entire output for period
of 25 years. upon terms substantially
the same as this agreement in ques-
ton. After this vote of the stock
holders the contract in question was
duly signed by both parties about Oc-
tober 16. 1905. In that month the
Federal company completed the pur-
chase of the Morning mine for 3d.
900, 900 and as the sale of.the stock in
London had fallen through, loan had
been arranged by Mr.. Sweeny Tor
that amount to pay for the mine, the
title to which was pledged as security
for the loan. To pay off this loan the
Federal company In November Offer
ed to its stockholders $4,000 900 par
lof new preferred stock and $1,000
900 part of new common stock, two
thirds of each class being taken by
the Federal company's stockholders
and the balance by a syndicate which
had beens formed to underwrite any
stock untaken by the stockholders. II
was the settled policy of the Federal
company before the smelling company
acquired control of its stock to buy
additional mining properties to ex-
tend it's life and these negotiations
for the purchase of the Morning mine
lasting throughout the summer are not
disputed to have been for the interest
of the Federal company. When the
Federal company desired to list its
new stock it filed with the New York
stock exchanqe 40 an ipducapnapt m
the public to purchase such stock, a
written statement that 1t had con-
tracts with the smelling company
having about 25 years to run, by
which the Federal company could sell
its entire output to the smelter. For
years after this contract was made no
one questioned its good faith or fair
ness. There was no concealment
about the fact that suchs a contract
had been made, and not only did the
statement of the president of the
company when the contract was sub
mitted to the stockholders show the
reasons for its making fully and fair
ly, but everyone seems to have re-
garded It as a desirable contract to
| have been made at the time and to
! have been real asset and advantage
/ to the Federal company instead of a
detriment to it, The contract of 1903
is not attacked even in this suit The
differences between the contract of
1903 and that of 1905 are substantial
ly: First, the extension of the con-
tract did not obligate the Federal
company to mine or deliver any defire
lite quantity of ore, but left it at lib
erty to mine or deliver from time to
time as much or as aittle as it found
profitable; second, there was no pro-
vision for a revision of the price
schedule at the end of a reasonable
time; third, there was an additional
provision giving the smelling COM
pany the right to designate deliveries
to any smelling works wherever To-
Gated and whether they were owned by
the smelling company or by any other
persons. The first modification was
clearly for the benefit of the Federal
company, The second was to ensure
stability of price which appears to
have been one of the great desiderata,
as the price of lead Heretofore had
been uncertain and fluctuating and
virtually fixed by firm of brokers in |
New York city. The price fixed both |
by the contract of 1903 and the renew
al of 1905 was on the basis of selling |
price of $410 per hundred pounds for
lead, which appears to have been fair |
to both periods, and as Mr. Sweeny |
testified, that was high price and |
had not been reached in the ten years
preceding 1908. The third modifca-
ton is explained by the necessity of /
having smelling operations conducted Il
where the requisite proportions of wet /
and dry ore could be present, avail
able for smelling operations, and does
not appear to have been in any way
detrimental to the Federal company |,
Under the contract as extended, bust
less was carried on between the Fed
'ral company and the smelling COM
'any, and the former paid dividends ,
ipon its common stock prior to 1908 I
IT 10 per cent to II per cent but since /
hat time there have been no dividends I
lpon its common stock save divi- ,
lend of " per cent in January. 1899; q