McGraw-Hill Inc. shareholders were divided today over whether the company's board should have permitted them to decide whether to accept a $40-a-share offer from American Express last February.

But the annual meeting was far from rancorous, and shareholders overwhelmingly re-elected Chairman Harold W. McGraw Jr. and other board members who resisted the American Express bid, although they received fewer votes than last year.

McGraw-Hill directors opposed the American Express offer on a number of grounds, including a claim that the merger would have been declared illegal and that the price was too low.

McGraw disclosed that the company spent $3.4 million (about 6.9 cents a share), to ward off American Express' $40 offer. McGraw-Hill stock is trading in the $26 to $27 range today.

"I am angry indeed," one shareholder told McGraw. "What you're saying is that you spent 6.9 cents a share of my money to lose me another $14."

McGraw said he and his fellow board members felt that the $40-a share offer was too low and that they were fighting, among other things, to protect the company's earning and growth potential.

"I hope we spent that money to get you more than $40 a share," McGraw said.

Guy Wyser-Pratte, executive vice president of Bache Halsey Stuart shields Inc., told McGraw that the objections to the merger raised by the McGraw-Hill board were not "central" and could have been resolved if the board had been willing to negotiate with American Express. "Instead, you hid behind the issues," Wyser-Pratte charges.

Bache bought nearly 50,000 shares of McGraw-Hill stock, gambling that American Expess would buy the stock at a premium.

But Wyser-Pratte, who was criticized by another analyst, said the issue was not Bache's loss, but corporate democracy. "I'm not saying for sure that the company should have taken $40. I'm saying that many small shareholders should have a voice."

Wyser-Pratte was backed by Curtis Banjamin, a former top official of McGraw-Hill who was a member of the board for 33 years. Benjamin noted that McGraw-Hill, which reported record earnings earlier this months has hit on lean times before. "I'd feel comfortable with all that American Express Co. behind us," he said.

But McGraw and the board were applauded by many shareholders.

Oliver Jensen, who described himself as a medium-sized shareholder, said that management has achieved a 400 percent improvement in the stock's price in the last seven years.

Gertrude Slaughter, a widow of a former McGraw-hill official, said that all the time the American Express offer was on the table "I kept my finger crossed" that it would not go through. "This company has got integrity and a management that's done a fantastic job."

She sat down to a round of applause from about half the audience, including Harold McGraw himself at the podium. "God bless you, Gertrude," McGraw said.