Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-03-29
SOUTHERND|V|DEND
ARGUMENTS ENDED
Decision Expected in May
in $29, 900, 900 Suit Insti-
tuted by Stockholders.
BY the Associated Press,

BY the Associated Press.
RICHMOND, Va, March 2S.--A de-
cision in the 100000 suit brought
by preferred stockholders against the
Southern Railway with the claim that
the sum is due them in back dtvi-
bends, may not be expected before
sometime in May, it was indicated at
the close of the two days hearing
here today, when Law and Equity
Judge Beverly T. CrumD allowed
counsel Is days in which to prepare
briefs and 10 days additional in which
to exchange briefs and prepare
answers.
Attracting countrywide attention
of financiers and business men, many
of whom came here to listen to the
argument, the hearing occupied two
tested every inch of the way, and the
closing argument lasted several
hours.
The preferred stockholders instf-
tuted suit on the railway to collect
back dividends which they said had
not been paid for nine years.
Cites Railroads. Stand. -.
With the plaintiff counsel holding
that preference should be given pre-
ferred stockholders in the declaration
Of dividends, railway attorneys today
insisted that the main point or con-
tention had been brought to hinge
around the discretionary powers of
the Southerns board of directors. To
counter the claim of the stockh olders
that preference was due them under
the contract provisions of the rail-
ways charter Thomas B. Gay. Rich
mond attorney, referred to the term
mon cumulative" in the stock con-
tract as the Hamlet of the play" and
declared that the word used in con-
nection with the preferred stock I'M
der dispute meant that preferred
stockholders were not entitled to
dividends which accrue, because they
are not earned, or II earned, they are
not declared or paid.
THE issue is very clearly drawn
and is whether or not the payment in
1924 out of 1923 earnings of $4,000. 900
dividends on common stock has been
in violation of the preferred stock
holders rights" the attorney said in
answering the charges of preferred
holders that it was derogation of
their rights for the board to declare
dividends on common stock when
they had not yet received their share
of profits earned years ago.
Called s'MeaningIess Bu8aboo,"
Mr. Gay held that the contract did
not specify full per cent dividend
but "at and up to per cent" in each
fiscal year. He referred to the orig
inal plan Of reorganization mentioned
by the compliments as "a meaning
less bugaboo."
THE men who accepted that pre-
ferred stock on reorganization got
exactly what they expected to get.
Nothing to show otherwise has been
stated" he added.
Closing for the plaintiffs, Richard
w. Hale of Boston declared the
Southern's Interpretation of its con-
tracts was arbitrary beyond any
thing known in the construction OF
contracts" and that the question was
whether there had been an annual
postponement of dividends or whether
there had been an annual robbery OF
the preferred stockholders"
He held that the railways case
had consisted of argument in support
of the preference and priority of COM
mon stockholders rather than in rec
ognition of legal preferences for pre-
ferred stock.
All the attorneys for the stockhold-
ers denied that the word "non-cumu-
lative" barred the preferred holders
from back collection.