Railroads -- United States; Railroads -- United States -- Finance
Other provisions were as follows: The Rock Island common stock might
be increased from time to time according to law, but the amount of the
preferred stock could not be increased except with the assent of the
holders of two-thirds of the entire preferred stock and two-thirds of
the entire common stock at the time outstanding, given at a meeting
called for that purpose. Preferred stock was to be preferred as to
principal as well as to interest; it had the right, as has been said,
to elect a majority of the board of directors, but this right could
be surrendered by the affirmative vote of the holders of two-thirds
in amount of the preferred stock at the time outstanding at a special
meeting of the holders of the preferred stock called for that purpose.
A Finance Committee might be appointed from and by the directors which
should have such powers as the directors and stockholders should choose
to give it, and which should have all the powers of the directors when
the board was not in session. The directors might accumulate working
capital, but no reservation for working capital should be made in
any year out of the surplus or net profits of such year until after
the payments for such year of the dividends on the preferred stock
of the company. The directors might also use the working capital in
purchasing or acquiring the shares of the capital stock of the company
as they might deem expedient, but shares so purchased might be resold
unless retired for the purpose of decreasing the capital stock of the
company.[664] This last provision aroused so much criticism that the
directors gave up the right of dealing in the shares of their own
company by resolution of November 5, 1902.
The important features of this reorganization were, as has been
indicated, those in connection with the inflation of the capitalization
and with the control of the property. In this connection it may be
asked, first, whether the Moores made a profit by the deal; second, how
large an investment they have had to keep in the property in order to
retain control; and third, what cost to them this investment represents.
Public-domain text, read in full here on John Shaqi.
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