New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-02-24
TIE CHICAGO And ROCK ISLAND SUIT


Fanshane Ggl The SdmeThese cases, of which the first
mentioned is the parent all brought up before the
Supreme Court AGAIN, and the preliminary motions hay
ing settled got out OF the way, the main ques
lions were presented The charge BY the plaintiffs 10
these suits that without the consent OF the stocSold
crs or tho other directors the Executive Committee
consisting f. Tracy the President, David Dows
David Crawford. IT,, Thomas Durant, and Thomas T.
sturces or rather Sub Committee, consisting Of Tracy
and bows created In September last 1890 shares
Of new stock OF the Company that they kept
this creation secret and meanwhile made short
sales to depress tho stock-in street phrase u
bear operation. for their own beneft-and In
much they hoped. delivered this new stock on their
hat dis Is fraud on them as large owners OF the old
stock, by greatly lessening tho saabe value OF tner
property That In fact the cOnSpatOrs Tor the pahtHs
cali them, sold at nearly par, ana accounted Tor ta
proceeds at price produced by the Dear opert3, anu
have not given to the Company the amount realized by
themselves, but only portion That since s.eh sue
they have lent the proceeds to various firms IN THIS city
call and insufficient security ana Interest Ihat IN
all this the Executive Committee have acted Iauduent
as regards stockholders In OF the secondary suits 10
Il charged that some Of the defcndap have applied TO
the Legislature Of Iowa to pass bull sancuoing tne
issue OF the new stock. poetpoing the annual uSonB1
the Stockholders. and continuing tne Iresent DS.3rS '.
office for one year on the original SUIT the pa,n sO'
an the examination Of various parties Mr IOws
the persons examined. Al the same time an inJunc
aud tine paying out Of 81 the moneys received
and subsequently, IL being alleged that the transfer DOCKS
Tie dtnndants Who took part in sending them for
tempt In dsobeying the order SIN another motion va
made for the appointment Ola receiver Oh the proceeds
81 the sale and these three motions are tue man moto
on the examination Of Mr. ToTs It appeared that ne
knew little Of the transaction. IIe did know that the
stock had been issued aud that some transfer books had
been Ia Chicago and that Mr. Tracy had made INC
sales MIR. Tracy declined 10 answer nearly every gues
to the disposal Of the stock or its proceeds on
piled 20 pay over half million Of the pro
cced bat the person authorized TO receive the money
can only be determined on the main motions thls dl
| recied to award the determination OF the Others
broker declines 10 give any information ON me grGua
that lac obtained oonhdeliaY put Mt irSey Diokeis
do state that short sales were nas on NE beh bet H.u
October and December last IN me sIut an alsVI rs
made that runorcd that transfers are gong on IN
Chicago Mr.. Dunham. the Treasurer states NE receipts
AZ A. 100 600 and the whole received from the
new stock M s7955 David Bows says that $0009J
ing S6OO 10 a solvent arm, s2ooOo0 10 Nermyea Co..
tjoo0oo 10 jay Cooke Co, $500 TO an inl'lun ~
hig credit; $1,000 40 deposited ~ the Union Natloil
Bank Of Chicago and sToG ~ are now on deposit Nlh
ESehapge Bank Of TINS ey ta Tue o1s wy lS
Cooke Co and vernyea Co have repaid their loans
amount loaned TO firm at 81 10000 Tho Fan.hawe case
presented ~ Mr. linrrilI diners "a some pcn,s the
complaint IN this suit after seitng out lbe conSoaa
ton OF the Old companies and the postponement Of an
election TIL June 1861 states that ina the report OF the
| Company Tor 1867, 1t was stated that sl,A5i1To 30
OF authorized bonds had been Issued, HT50o0 having
been issued FOR Iowa poPey that further issue has
sssoooS that sinct April 1867 the Company has earned
ACoOc, with an increasing business and when the new
That Dee 80 1867 the market price OF the stock 8as
ggl defendants unlawful issue of the now stock
depressed II 10 sg. that the resolution TO Issue ae new
stock merely for the speculative purposes OF
tho directors and was Kept secret aid those purposes
that the old aud new certificates made alike In FORM
prevent them being traced; that The directors
have neglected their duties In surrendering the manage
nent 10 tho Executive Committees that the issue, illegal
was sim unjustihabe, the Company had 10 need on
money aud tke sale VI the below utterly
Illegal that tho preissa nm The issue is needed 70
build tho road from Dcs MOincs 10 ,nd r. IL tuc' "o
eacuse for such issue. It Is too grave matter
sultug the directors, o. even for the directors 10
| tnko without consulting tine general body Of
tie stockholders that in fact majority OF the stock
holders opposed TO such action that several OF the
defendants IN the interest ~ the Union Pacific Rail
way Company aud willing 10 sacrifice the interests
OF this Company to the Union Pacific Company Thomas
G. Durant being especially named in this connection
Mr.. Fanshawe charges that tho defendants have
moved the books 10 avoid the hunctons In the other
suits; that they have about e. GoOof the Companys
cash under their control and ARE using the funds Of the
Company in the expenses Of the present litigation that
there danger of the defendants entering into contract
for the building Of road westward from Dies Mones and
issuing further that the defendants trying TO
the present Directors until June 1852 and egalizing tins
These dangers the plaintiff asks the court 10 avert
lie supports It by aidayits partly those made In the
suit OF Fisk Co.. and partly original efdavits more fu
n some respects than those In the other case Among
was calculated with tho peculiarly depres-
sing influence Of the LIST OF January that the defendants
have executed a contract for the building OF new
road, thereby subseryng Dnrants interest that Tracy
and Dunnt owned lands on the proposed extension aud
this was one their interests ia having IL effected and
the moneys have been loaned at small rates TO stock
that as late as the 2sth OF December Bows misrepre
senied 10 them the amount OF stock issued r. L. Cut
December. Benz Nathan says that Tracy told him there
not enough business to warrant tho extension TO
~ George H. Bangs, who professed 70 be Mr. Traeys
agent, the 10Th OF this month with offers OF Us hh ~
$50 per share for his stock 10 induce him 10 sell out that
Tracy would succeed In the suit brought against nm ana
the WSsed states CpaTi cEspe me said Traey on ae
count ~ has tcedlh aud influence 'coh be sure 10 sue
ceed that Tracy and his associates were going 20 teach
IT,
way; that the same evening y Lloyd gter on nter-
rie1 rim hangs, called ON him aud made similar
offers protesting TO be In the Interest Of the other side
that is Of Fanshawe himself but wgng that II Tracy
the United States Court he Is bound Ia DO he
will beat us, for he mas great influence IN that court no
can by mem lie WIZ 90 Win O nSsx ., Int hs a.
using our money" That he showed fanshawe letter
signed by his anshawesl attorneys 10 the putport that
Lloyd should purchase his stock at any reasonable price
but refused 10 give up the letter, and that he assMe
kas suffered from the opportunities Of other agents Oh tue
plaintiffs James Grant that he could not up
TO the 18th lust nd any books Of company either In
We give the ease Of the defendants pretty full;
City aud County Ct hec York, ss-Dayid Bows
aud say That The Union Pacific Railroad companys
road runs from Omaha the Missouri RIVER In wester
terminus That such company Is incorporated by an act
OF Congress with an intended capital OF sOo0o"9 mat
Its road completed and IN operation for distance
OF 800 miles west fm Omaha and that the Work on cOu
pleng The residue ID IN active operation both ut me east
opinion OF these depOnens ana as they are orntu hu
verify believe Il would be highly beneficial 20 b saS
line completed from Chicago to such point on the Missouri
River would connect II with the eastery terminus OF
the sad Union Pacific Company road And that IL would
be advantageous 10 each OF such competing lines II the
other should or be prevent Cd from affecting such CON
necton. Aud that while the said Union Pacine company
would be benefited BY the completion of every rapad
from the connecting with II 10 Omaha, us neru IA
any such connection is less than that of any road
running from tho east aud forming said oonneot0 Nha
there Is ruilrond company entitled the chicago ana
Northwestern Railroad Company; having roaa i,Hm
Chicago Fulton the Mississippi River, holding
leases OF certain railroads. Iowa. which run from n
tom In Iowa, the mississippi opposite FULTON aiors
said TO Council Bluffs. opposite 9omahaon tho Missouri