The Battle of Bond & Share

The meeting opened and the riot started. Management pounded for order, stockholders jumped up & down. They shouted at management, at each other, at the Government. There were cries of "Where's my money?", threats to call the police, invitations to "settle this outside."

This rowdiest of stockholders' meetings, rowdier than any big corporation had even in mid-Depression, caught giant Electric Bond & Share Co. by surprise last week. There was no particular reason for it except that the company has had trouble aplenty--its affiliate's plants in Shanghai have been seized by the enemy; its earnings have dropped from 1930's $42,000,000 to this year's $6,000,000; SEC threatens to make it part with some of its U.S. operating companies.

So trouble brewed as soon as urbane, grey-haired Chairman Clarence Edward Groesbeck pounded the gavel to open the company's meeting in downtown Manhattan. Up jumped scrappy, leather-lunged Stockholder Samuel Okin, crying: "This whole meeting is invalid . . . the proxies must be checked." Chairman Groesbeck quickly shoved the gavel into the hands of tall, suave Ebasco President Samuel Wilson Murphy, but the rumpus could not be stopped.

The Truth. Stockholder Okin bellowed on: "I'm going to tell the whole truth about the company's officers and directors . . . and don't anybody try to stop me." Paced by the staccato poundings of President Sam Murphy, Okin told how he had bought 9,000 shares of Ebasco stock, was about to lose everything because "the management had tried to sell the company down the river by playing into the hands of the SEC." Up went shouts: "Fight the SEC!" "Save our company!" A peacemaker tried to smooth things over, got so wrought up himself that he threatened to throw Okin out of the room. An aged shareholder yelped that he had paid $4,000 for stock now worth only $12.50. He shook his fist right under President Murphy's twitching nose, demanded: "How do I get my money back?"

Into this tumult barged snappy, tennis-playing Stockholder Norman Charles Norman, a jeweler by trade, a management-watcher by choice. He shouted that all Bond & Share employes should be tossed out; "This is a stockholders' meeting." Another shareholder, threatened to call the police unless everyone was quiet. Finally President Murphy managed to read a 26-page report. It was bad news: profits in the year ended September plopped to a 20-year low; heavy taxes and Government competition were big worries; the Death Sentence Act "is such that perhaps we cannot stay in business."

The Guts. This set stockholders boiling again. Scrapper Norman shouted that they "wanted some directors with guts who would fight the SEC." Another proposed to pitch out the present nine-man board of directors, put in three management men, three preferred stockholders, three common shareholders. President Murphy called this "an excellent idea," but out of order unless names were submitted in advance. Then over-zealous Okin grabbed the floor again, harangued for over an hour. The shareholders listened at first, then heckled him, hooted him, finally shouted him down.

Up to the microphone wobbled President Murphy, frazzled and exhausted from five hours' verbal battle. He banged for order, finally got enough quiet to count proxies voting down a stockholder-proposed $10,000-a-year salary limitation. Before the stockholders went home they adopted a resolution asking the company to fight any SEC orders harmful to shareholders. Bleated one stockholder: "The most disorderly meeting I ever attended " Said Chairman Groesbeck: "A healthy and beneficial affair."

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