Wilmington daily commercial., 1872-01-06
The j. Il ID. RnilrOnd Co. - The Extra Issul
of stock Explained.

To A,e Eiiitor ofH,e Commercial:
The true story Of the stock issue il this The
Junction and Breakwater Co. had been pay
ing for hired equipment to another Railroad
Company, about twelve thousand dollars a year
which was near fifty per cent interest on its cost.
At the Directors meeting of February 1st, 1871,
a committee was appointed to get new equip
ment, in view of the approaching peach season,
and invested with full discretion to raise the
money for that purpose. No limitation whatever
was put upon that committee. IL was composed
Of FIVE PERSONS il usual in such cases. 10 that
there would be casting vote to prevent its being
blocked, two against two The committee was
composed Of the President and Messrs Baum
gardner, Meserole, Sheaff and Prettyman, and
these five constituted a ajority of the Board OF
Directors AT their first meeting, on May 3rd,
they unanimously authorized the President to
contract with the Jackson & Sharp Co. for twen-
ty-three cars, but said nothing about the pay,
excepting that they agreed to meet on the 18th
of June to talk over the matter.
But the Jackson & Sharp Co. are shrewd fell
lows. and didn't altogether like that loose way
Of doing business, and 80 the building of the
cars did not go on with such promptness as to
insure their being ready for the peach business.
The President called another meeting of the
Committee, on the 23rd Of May, and the major
ity authorized him to issue four thousand shares
of stock, to be used as collateral security, which
was done. Mr.. Gibbons, not wishing to have
one-half direct to the Jackson & Sharp Co., and
the other half 10 Mr.. MeserOle, as trustee, know
ing that he was responsible, and incapable Of
putting them to any improper use. This latter
half was intended to cover the personal indorse-
ments for the Company, of Mr. Meserole, Mr..
Gibbons, and Mr. Sinclair, and the cost of new
engine, altogether amounting to something like
thirty thousand dollars. Without that indorse-
ment the equipment OF the road could not have
been obtained. Those three gentlemen took it
upon themselves and not man in Sussex Co.
put in helping hand. Mr.. Baumgardner had
raised ten thousand dollars for the Company,
but he got as security judgment with warrant
Of attorney, on the whole property Of the Com
pany.
The equipment was got in that way, the stock
being used only as collateral securty-a very
customary way with corporate companies. 1t
saved the Company from the necessity of rails
ing large amount of money Immediately, and
threw the payments forward into the active
freighting season, when the receipts of the
business, il was supposed, would discharge the
debt. But those receipts being unwisely man
aged by Ba1mgardner and his men, not one-half
of that debt has been discharged. And they
have made it condition of paying a personal
loan to the Company, by Mr.. Meserole, that he
should return fifteen hundred shares of the col
lateral stock, which he did, five hundred shares
having been transferred to Baird d Co., as col
lateral security for new engine, costing eleven
thousand dollars. And there stands the matter
to-day. Two thousand shares of the stock,
sworn by Baumgardner and his men, to have
been fraudulently issued, are in the hands Of
Jackson Il Sharp Co., five hundred in the hands
OF Baird a. Co., and the other fifteen hundred
have been returned to the Treasurer Not one
share OF that stock was ever in the hands Of
Gibbons and not one share OF it was ever used
for any other purpose than to serve the uses Of
the Railroad Company.
And now, Meserole and Gibbons are indorsers
on the paper Of the Company, and are RESPONSE
BILE for the debtssomething like twelve Thousand
dollars without any security whatever. The
most beautiful part of this whole affair is the
manner in which Stockley, Burton & Kitchens,
three noble men ~ have managed to throw ON
others the entire burden Of getting money and
being responsible for the debts of the Company,
without raising one cent themselves. y.