The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-05-29
THE CHICAGO ROCK ISLAND AND PACIFIC
RAILROAD.

the Observation-Disclosures in Three States
Traps and COunter-Traps-Sharp Prnc.
tice-PropOsed Meeting Of the Stockholders
Next Wednesday.
The contest which is familiarity known as the Rock
Island Railroad litigation commenced in our own
Supreme Court, in this city, in the shape of three
actions, all against the Chicago, Rock Island and
Pacific Railroad Company and John +. Tracy,
President, and against his associate directors, by
Rufus Hatch, Fisk & Belden and +. r. Fanshaw.
plaintiffs respectively in the three suits. The COM
plants charged the President and the Executive
Committee Of the road with the Illegal Is
sue OF $4,000 shares, representing s4,9oO,0OO,
with abusing the trust reposed in them and
with the intention of appropriating the proceeds
realized from the sale OF these shares or
stock to wrongful purposes detrimental to The best
interests OF the company. Upon the sworn state
ments OF the plaintiffs supported by corroborating
afiidavits Judge Cardozo granted Injrncons on the
9th day of January 1865 restraining the directors
rom issuing or selling, If issued, any more Of these
shares and nom making any disposition whatever OF
the money received for those already sold These
injunctions were granted behalf of the represen
tatves OF 49, 725 shares the whole number of shares
with the new issue included, amounting only to
lao Ooo or S14,0O0OOo. About the time OF the grant
ing or these injunctions, or, as II Is alleged
by the plaintins, after their being served upon
the defendants and in contempt thereof, the Presi-
dent and Executive Committee removed the transfer
books and the cash in hand, covered by the injunc
lions, to Chicago The plaintiffs Immediately took
steps to counteract this flank movement" and APP
piled to Judge DrummOnd, OF the United States Cir
cult Court at Chicago and obtained from him
injunction similar TO those procured in this city;
but President Tracy and his aids not to he
caught sleeping: for, although an Office of the com
pany was in operation In Chicago with assistant
treasurer, assistant secretary and an assistant
register, neither books funds could BE found,
and after much inquiry it was ascertained that these
vauables had all been again removed to Iowa, and
were somewhere in the city OF Davenport. While
the plaintiffs, on behalf of themselves and
their cestny que trust, were thus active in
suddenly sprung an unexpected mine upon
them by obtaining on the 18th Of February
1868, from the Iowa legislature special act egaliZ
ing the issue Of the 490 900 shares and requiring the
proposed construction OF the Railroad from Daven-
port to the Missouri river One clause of the second
section OF this subjects the company TO the entire
control Of the Iowa Legislature, who may pass such
rules, regulations and rates of. tariff for the trans
pOrtatiOn OF freight and passengers as they may sec
tit. To this the directors objected but finally accep
ted It, after the insertion of another clause extending
their OF ONCE till June, 1862 and pOstpon-
ing the annual meeting OF the stockholders appointed
by the bylaws 10 be held in June, 1885, for the pur
pose Of an election. The act was to take effect only
upon its being accepted by the company within ninety
days after Its passage. The plaintiffs and the stock
holders associated with them took advantage OF this
clause at once and sued out an injunction In the SUI
preme Court in this city prohibiting the directors from
| accepting the act, Judge CardozO deciding that a.
the company owed lis legal existence to the state OF
Illinois and it being an Illinois corporation any act
of the Iowa Legislature assuming to legaiZe the pre-
| imperative. But even this seemed TO fall short OF
its expected effect. The Executive Committee called
| meeting OF the directors ut Chicago, where all tho
| New York members Of the board present and initiated
in the scheme and on whom the last Injunction hat
been served in this city resigned their office, an,
the vacancies were at filed by others from iii
nOis not hampered by the Injunction. But New YOrl
| was not to be OutdOne by this second flank move
| ment An application was again made to Judge
| Drumnond, OF Chicago. and he again granted az
| injunction similar to the one signed by Judge Car
dOzO. On being served with this Injunction, the
Illinois directors also resigned. ana the whole re-
naming board moved once more into Iowa. where
they succeeded in inducing the Legislature TO pass a
,nf,.f .lttfia flnt nf
act signed by the President and Secretary only OF the
| company shall be deemed a valid acceptance by the
corporation. This acceptance was Immediately exc
| cuted and filed. Upon learning this. Judge Drum
mond issued an attachment against the body OF John
| F. Tracy, as for criminal contempt OF an order Of
| him at Davenport Iowa. But on writ of habeas
| corpus Mr.. Tracy was brought before Judge Love,
| OF the Federal District Court, who discharged
| him the ground that the offence, II any,
| had been committed in Iowa, out OF the
| district OF Judge Drunmonds jurisdiction. THUS
matters rest for the present, hut the stockholders
who represent nearly threeours of the entire share
capital OF the company have determined 10 test the
validity OF the act Of the Iowa Legislature and all
subsequent proceedings OF the directors under IL b.,
yers may anord them For this purpose and TO PIE.
pare fer the courts, they will disregard the
clause OF that act continuing the directors in Office
TIL next year. but will meet ut Chicago on Wednes-
day, the ID Of June next, and elect a full set OF new
Ofcers TO whom will he entrusted the charge OF OBJ
| franchises of the company. The stockholders who
favor this represent over 1000 o the 10000 shares,
and they declare that what they insist on draining -
only the just demand to have their property managed
| by persons in whose election they had voice and
who are, In the true sense Of the word, their repre-