The Tipton advertiser. [volume] (Tipton, Cedar Co., Iowa) 1856-1962, 1868-05-14

present, and no doubt has ever hereto
fore been expressed rs to the legality ;
nor can we learn that any complaint in
relation thereto, has ever before been
made by any Stakeholder. Hon. A. C..
Flagg was then Treasurer Of the Com
pany, and from report made by him to
the Board Of Directors, we make the
following extracts:
"The Company had Stock subscrip-
ton, nominally, Of $8OO,OOO, aud a tie
bonds and large portion of the stock to
be issued were pledged to the contract
ors, 1t soon became apparent that the
collections from subscriptions would be
consumed In paying for right Of way,
salaries aud other expenses, not covered
by the contract.
"And after the sl4o, 900 raised on the
Oon.is Of the cities of Peru. Rock Island,
and Davenport were exhausted, the
means for making the cash pay Of
$25 600 could not be obtained from SUBJ
scriptions. In this state OF things there
was no alternative but TO resort to the
stock which the Company could issue,
or to borrow on pledge Of such stock,
1t being the only resource for raising
money. 1t was obvious that the time
when money could be borrowed on the
stock was the best time to make the
necessary sacrifice to get the means by
an absolute sale Of the stock.
1.-THE Treasurer therefore, proposed to
Mr. Sheffield to take the stock ut such a
price as would make II equivalent to
cash. This he concluded to do, more
from necessity than choice. The cash
payments for October, November aud
December, 1852, and January 1853, were
made to the contractors in stock at IS
per 100. From March to July, 1853, at
05 per 100; In August, 1853, at 81 per
100; and in September Of the same year
at S5 per 1WD. The total loss on the
monthly payments was So, ,S6l. The
prices offered by Mr.. Sheffield were gem
orally more liberal to the company than
probably would have been established
had the Treasurer referred the matter
to other persons to decide ~ to the cash
value Uf the stock"
No other or further subscriptions to
the capital stock Of the Chicago 4 II. l.
Il. Il. Co. was ever made upon its sub
scription books; although the capital
stock of said Company at the time or the
consolidation was $9,lOO,OOO. At the
time Of the issue and sale Of stock as
stated by Mr.. Flagg, James Grant, the
leading Attorney for the "New York
Ring was Vice President Of the Com
pany, and member Of the Executive
Committee Of five. He was lawyer OF
reputation, and the only one in practice.
who was u nIeml~r Of the Board of Di-
rectors, and it Is hardly to l-e presumed
that 80 important . step would have
t'ee1l taken without Iris counsel and
advice, certainly not without his knowl-
edge.
In December. 1860, It became apparent
that more rolling stock was required
than the contract with Messrs. Sheffield
and Farnam provided for, and authority
was given to the chief engineer and con-
tractors to procure the same, the aggre-
gate cost of which was $245, 1865. 70.
The same necessity existed for the
money and the resources were only the
same as before, and again the company
resOrted to the same means to raise it.
Speaking of the delivery and payment
for the equipments, Mr.. Flagg in his
report says:
"Those delivered previous to July
were paid for in stock at the rate of s.
per 100, to the amount of 600 shares.
The rate for the residue was ut 80 per 100
to the amount of l,s64 shares. This
was S33, $40 less than par for the stock"
In February, 1854, the company was
required to raise over hundred thous-
and dollars. Mr.. Flagg says: "The
question again arose whether it should
be done by borrowing or by an absolute
sale Of stock. A sale Of 500 shares
was made at s. per 100. This was con-
sidered sacrifice at the period referred
to, the total loss being $22,5OO. But
time and the severe pressure for money
has demonstrated that a much greater
sacrifice must have been made, II the
money had been borrowed by hyothe-
eating the stock.
Thus was the policy of the company
settled by three different transactions,
when the same James Grant who now
CIlcS IH LHc JOuucSJ VOICE outrage ana
illegality," was member Of the Board,
a member Of the Executive Committee,
and for the most Of the time either the
President or Vice President Of the COM
pany.
Is 1t likely that such issues and sales
of stock would have been made by the
Board without his advice, or that il he
had advised that the sale was illegal,
would it have been made?
The idea Is too absurd. As many as
four or five times since the last date
have either the Board or Executive
Committee authorized the issue of capi-
tai stock just as the issue of the $1,000
shares was authorized; have authorized
its sale by committee Of one, or some
times Of two, just as the last sale was
authorized, and 1t has been sold at the
Stock Board without the knowledge of
any one except the committee having it
in charge, just As the sale Of the 1900
shares was made. The sales have been
made as low as IS per 100; and some
times At par or above as the market