SHAREHOLDERS' RIGHTS.
It is really on this question of market price that the main claim of the American shareholders rests. In other words, if the company had made its issue at round about the market price there would have been no special value attaching to them from existing shareholders' point of view, whether American or British. When, however; it comes to issuing a £1 share about 13s. below the Market qtiotation, the issue then begins to partake ..of .a bonus character, 'and it is customary in all such instances -for 'existing- shareholders to- hive' the --first opportunity of - participating, in which case it would presumably have been impossible to. differentiate between American and British shareholders: : Of course, the Chairman of the company_ might urge, and, indeed I - believe did urge, that in :having. the shares offered direct • to the public through an intermediary at the price of 42s. -a share, such price was more in accordance with a 10 per cent. dividend proposition than the high price quoted in the market, a price due, probably, in large measure to American' buying. But while there may be some truth in this _very one point of view, it scarcely affects the :main;:contention that' by reason of the current market ;.quotation of the existing Ordinary shares the new shares • carried.-a potential :value in them, and.-tbat those who had the first claim to that potential value were the .existing shareholders of the company... •
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