STOCKS WITH PREFERENCES AND LIMITATIONS	129
common and preferred stock were entitled to one vote per share. The
parity of voting power was retained after the common-stock split-up by
reducing its voting power per share.
Some corporations make it possible for the holders of preferred stock to
dominate their policies by conferring upon preferred stock multiple voting
power. The holders of preferred and common stocks of the American
States Utilities Corp. vote as a single class, with each preferred share entitled
to four votes and each common share, one. The number of shares in 1937
was preferred, 168,000; common, 310,000. This gave holders of preferred
stock at least potential control. The preferred stock of the American
Tobacco Co. is entitled to four votes per share: common stock, one; and
common B, none. The preferred by this means has potential control. The
4,716 shares of preferred stock of the New England Foundries, Inc., are
entitled to 10 votes per share. The voting power of the common stock is
restricted to a maximum of 40,000 votes as long as any preferred stock is
outstanding. Paramount Pictures, Inc., had outstanding in 1937: 148,245
shares of 6 per cent cumulative convertible first preferred stock entitled to
20 votes per share, and 571,751 shares of preferred stock and 2,407,505
common shares entitled to one vote per share. Each share of 7 per cent
cumulative preferred stock, par $100, of the American Furniture Co., Inc.,
is entitled to one vote. Each share of common stock, par $1, is entitled to
one-twenty-second vote per share.
Contingent control is frequently conferred upon preferred stock when
the control exercised by common stockholders fails to provide the dividends
expected by the holders of the preferred stock. If dividends have been
passed for two consecutive periods, for instance, the preferred stockholders
may acquire the right to elect a majority of board members or at times even
the whole board. In case of default of eight quarterly dividends, the 6 per
cent convertible preferred stock of the American Insulating Corp. is entitled
to 10 votes per share. The preferred stockholders of the U.S. Plywood
Corp. have no right to vote unless their dividends remain unpaid for a period
of ]% years. They may then elect a majority of the board of directors.
If the Albemarle-Chcsapeake Co., Inc. should be in default in the payment
of eight quarterly dividends on its 5% per cent Class A cumulative preferred
stock, the holders of such stock may, at the option of the holders of 15 per
cent thereof, elect a majority of the board of directors. Holders of the
4 per cent cumulative prior-lien stock of the Wheeling and Lake Erie By. Co.
luive the right to elect a majority of the members of the board of directors
whenever the company fails to pay 4 per cent dividends for 5 consecutive
years. Otherwise this stock has one vote per share. The noncallable 8 per
cent cumulative preferred stock of the Universal Leaf Tobacco Co., Inc., is
entitled to exclusive voting power on default of dividends for 2 years. In
the event such exclusive voting power is exercised and if the company fails