The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-01-17
TIE CHICAGO AND ROCK ISLAND RAILROAD
SUIT.

s~~~~->~~>~~~~-~~>>>>~s
Alleged Charges Against the Directors of
Illegally Issuing Forty-nine Thousand
New shares-yvithalrawnl Of S4,9OO,OOO,
tho Proceeds OF Their Sale, from the Corn
Exchange Misunderstanding the Injunction Of
tho Supreme Court Of THIS State-Testim0ny
OF David Bows. -
In order TO fully understand this most important case
which has excited 30 much interest among brokers'
bankers stockjobbers nancers aud capitalists full
report Of which appeared exclusively the HERALD
few days asol 1t 10 necessary briefly to present the
various issues involved, together with history OF tho
legal measures adopted by tho plaintiffs to obtain rolief
from the alleged fraudulent and unlawful proceedings
Of the directors and other officials connected with the
company.
On the 9th OF January Mcssrs Fisk & Bciden CON-
nenced action against the Chicago. Rock Island and
Pacific Railroad Company, and Its directors, john F.
Tracy, David Dows Francis H. Tows Oliver Charlick
and Others alleging In their complaint that the forty
nnc thousand shares OF the company had been Issued
without any loyal authority by executive committee.
or part OF thsm with the cooperation and connvance
OF tho defcndants On aGidavts sot,ing forth these
iacts, and showing that the issue was an illegal one,
Judge Card0zo granted injunction against any trans
ers Of this illegal stock the books Of the company
Tho plaintiffs having applied to Mcssrs. Tows and Tracy
to testify on the motion for an Injunction and they
having refused, Julius J. Lyons was appointed ref
eroe to take testimony.
On the 9Th OF January, tho tne appointed for Tracy
and lows to attend, they not present. and on
attachment was Issued from the court against them,
under which they arrested and brought before
Judge Cardozo: but they having excused thcir non
attendance, and agreed to be present the next day
before the refcreo tNr Lyons) further proceedings
wore taken under the attachment Inquiries being
mado for the moaoy which received for the sale OF
thn,n
amount with tho exception OF few thousand dollars,
had been taken from the Corn Exchange Bank, where
It was formerly deposited and tho directors OF the
pany declined to give any information TO what they
had done with Il.
lmme diatey after the service Of the Injunction ro-
sraning the transfers OF tho stock tho directors
sent the transfer books to Chicago for the purpose OF
enabling tho transfers to DO mado there where ,hoy
supposed tho Injunction OF tho Supreme Court OF this
State would have effect Upon discovering this tho
plaintiffs obtained order to against tho
defendants why they should not DO punished for con-
tempt, alleging thai this acIion was In fact volat ion
Of the injunction. and also moved that tho defendants
be compelled TO deposit tho money received for the salo
OF the new STOCK IA court or pup the saino over 10
receiver
On ,ho oh and 10Th instant the partics with their
counsel, appeared before the raeree. whom Pfancs H.
Tows aud Johu r. Tracy examined fully IN regard
to the matters relating to this suit, lengthy and yer
bam report OF which appeared exclusively in the
columns OF tho HERALD. Tue then adjourned
to Yesterday when on meeting tho following testimony
TESTIMONY OF DAVID Dows
@ Are you one OF the directors Of the said company7
miueei a. Ye, sir. Q. as director or member Of lie
Executive Committee had yoa anything 10 do With tho
aa for What sa 80 so Re- sT ny
It. Q. When did you vote for this resoutionY
say tho os s Sa a1 nsa i T 10
do with the issue OF tho said stockf A. have no. IN
my own acoa-ihat Is, have dono nothing myself; If
It Is my own action on mean. that Is all. Q Since
September last havo you done any act relation to tho
issue OF the $4,000 sharesof stock OF any part
thereor9 A. have that stork issued or saw i
after issued and placed In the hands Of ITO
Of read Il. w. Durham, for sao keeping.
Q. Whom vas tnasg A. | cannot tell You how s,on
after tho stock issued that done, bat pretty
soon after IL was Issued; have not the daos In ny
mi, mind and cannot tell you Q What do moan W
A. tho execution CT tho certificates,
tho sirningoi them by tho officers; make use Of te
use. O. Az chat tnc the cedcatos issued 10 any
holder, delivered oat OF the officer A. They were
urer, I said before. O. Az that ume dill any body
own thcm2 A.. 4 should suppose that NOBODY but tie
ton 70 ihom psen that time made authorized2
A. Not 10 my knowledge. G, DO yoa know low long
know how Ing they remained in his hand,
but should think quito tnreo months.
was the rt tmo that yon saw them or heart OF them
A. could not give you tho dates without thinking
finding oct some papers Q GIVE the tiino Is near as
you eau A. sh ,uld think that about three months
they IN Dir Drnhain's hands. Qacstion repealed
Some tine IN the Inst half OF nccembu.. @ Were dii
You SIC them thcnS A. ihe nrs. time saw them NJ or
that the trcasurer's hands (r Duntnm y al tho
Corn Exchange Bank O wno showed them to you ?
A. Dir. Durham took them out or tho olest
U Ursrs room there d Wa, any@ody ci.s pres
on.s A. Yes Q. whog A. ~. Johu +. Tracy.
q. Did Mr. Duuham have them al Ia orc ouadia--
altogether a. cond not say whether IN one BANGLE
hn tQr NJ In Nh fn4fy.
nnc thnus nd sharcs tho certificates or tie whaeor
for porioas 4. suppose ihcY were all toSehcr IN
Did be On thas occasion give Them 70 VOC, or TO ir
1racys A. They were flsen 20 hr. Tracy. w.
not tia, about the 2sth Of Dccemoe.2 q. do NOT
rocoect o. DO yor rccolect tho day o. the week! A.
do no. SIR Da yen g1c ynn ona No ,nv S
receive tncm2 a. They were hlaint to Mr Tracy, as
my recollection serves me MI Tracy WIS then sc,-
WIN, capacity you thcrcY A. rs director Of The
company. And ~ ono Of mo Executive C'ninltteey
a. Yea sur Q Did YOU thoa do any tang IN r,gari TO
IL s,ocl or give any directions rro ~ A. No sir;
gave 70 directions to Mr.. Tracy 4 regard or. 9.
lad any directions been given to him b. apyo ny tat
you know A Noae excepting what wcr9 gwen b.
tho Executive Comm iteo under tho fcsciupns Passed.
In tho first rosout'on2 a None that j know o..
Q. Was there snbeommttco OF tbe Lxeculye
Comm appointed to act Ia lcct 70 mis- matter
OBJECTED 70 was there a.suh-comn'itco OF thn TX
ccutive Ccmmrcc IN respect 20 tnss, "a as2 A. There
mittee @ VINO composed tnatg a. MI John y.
Tracy and myself O. d you and he then, after TIC
apponteut that sub-conm toe do all that done
In respect 10 tho isgang Of these shares? 50 far
know about 4, ar Q III Mr. tracy perform my
arts In respect 10 the which not red in
BY you so far you known a. ! DO pot know
that no did, sir O what did hr. Tracy do
WITH tho certificates that no took then ~
tho Office from Mr.. D0uham2 OBJECTED O. J
witness don't know, sir, what no old with III N.
@ For what rpose did hs take themp tOmaced to)
q. 10 you know for what purpose they were taken
(Objccei tol Q Did You let Mr. Tracy ako tnem a.
They werc taken By Mr.. Tracy. Q. With your consent
A. did not object TO II, sir Q Fer what purpose did
you acqnescc IN thatf A For whit purpOse2 q Se',
sir; for what purpose did you acqucsca In his akrg
thenY A. For tho pirpofo cf delivering them. q 20
lyerrng them 70 whom2 A. 10 those whom 10 had sold