, 1873-10-06

grading, bridging, and tiotng tho entire lonRtll
Of tho road, about Ito mtlou; mid - 000 900 Of
tho Iailroad Company's tlrst-morlgage bonds |
woro to 10 paid to iron aud o4up Tho line and
provide 1t with stations, switches, water-tanks,
etc. Tiis woullbo at the rnto Of a2Go0 600 for tho
'sholo work, whilo subsequent oHttmnto Of the
cost Of tho road, which runs through 1ovol
country, placed 1t at $1,000, 900. Tho Morgan
Improvement Company llat1 no soouor secured |
ts consraot than 1t sub-lot tho work Of grading,
ironing, toing. and aurfachlg TO John Warner,
ono Of tho Directors Of tho road, who had boon
instrumental in securing tho original contract
Tho bridging Of Tho road WIS also Bul-lot to
George D. Graham, who IL charged with being
straw-man aud really representing William
Fuller, tho Vico-presidont of tho road who had
likewiao boen activo iii letting tho contract to
tho Morgan Improvement Company. THIS iB
o repetition Of tho Union Pacific nauago-
mont, IN which tho Diroctorg, acting for tho
Company, lot all tho profitable contracts to !
themselves through go-botwoons. Drolvin,
Williams, Black, mud others, arc alleged to bo
stockholders in both tho Gilman noal md tho
Morgan Improvement Company. 1t is also
charged TINT these sa1no gont1cmon aro mctn-
bora Of tho Barclay Coal Company, engaged in
mining coal in sargamon County, which Inns
Ind tho bonoflt Of worry favorable freight con-
tracts at tho expense Of the bona fde ownera Of
tho roal. During tho construction OF tho road,
tho contractors sold their s2,000,000 frst-mort-
gage bonds for q, 100000, md woro charged on
tho books of tho Company with tho lattor
| amount inslcad Of tho face Of tho bonda. Oh por
contract, being an additional profit Of 100000.
The Morgan improvement Company also
brought in o bill Of extras, mud received
credit OH tho books for theso to tho
amount OF a373, 900. If tho actual cost OF con-
ntruction waa only 91,6oo,ooo, ms has boon estt-
| matcd the profits derived from thoHo Credit No
bilicr transactions must havo been about 3d.
779,000. To holp themselves out on this, tho
Directors iasuod $1,000,00o Of new aecuritios,
called '1llcome DondB," in violation Of law, rs
their charter gavo them no authority to increase
the Company's indebtedness. Thoy also issued
to themselves majority Of tho stock In orlor
/ that thoy might control tho management Of tho
road 1laving secured all tho prolta from con"
tracts that were to be mado, and having exhaust
cd tho resources Of tho Company, 1t was then
proposed to leaeo the road to tho Pennsylvania
Company, On condition thnt3this Company wonld
pay tho interest mud principal Of tho bonds that
had beon Issued III oxcoss Of tho legal indebted
| ness. md pay i'll money tho clnim o1
s973, 900. in which tho Directors Ind d personal
interest. This would leave tho zoal builders Of
tho road, the towns and counties that ISSUED
their bonds, cut In tho cold, aud tho construction
ring would secure it's enormous profits at thci
expouse.
The remedy aslscd for by tho complainants il
TINT tho road shall bo roloased from tho heay,
indebtedness charged to have been fraudulontl,
issued, mud placed in tue hands Of tho boHa ttd
stockholders, consisting Of tho counties AMI
towns that subscribed for tho stock md paid TO
it with their bonds. If the factA ahall be provct
to DO what Ia alleged in tho complaint
We should not DO surprised if some sucl
radical roliof would ,bo afforded by tho Court
Wo hayo already pointed out, on several occa.
sions, that the Inv expressly limita corporation
to tho privileges defined in their charters ant
TINT they hayo no right to go outpIdo Of til
domain thus described. We have also oxprcssot
the opinion that, under this principle of Inv, til
Directors and stockholders Of d railroad com
pany have 10 right to lcnso their road, unlos
their chartergrauts them tho privilege. Tho GAM
prohibition would apply to IN oyerissllo Of stoc
OF bonds. With regard to tho Credit Mobile
plan, by which Directors of railroad companies
mako profitable contracts with themselves as in
! diyiduals Congress evidently beloved that
Court Of Equity would adjudgo such contract
to DO fraudulent, Or it would not haye author
, lied tho suit which tho Government Inns brougl
in the United States Circuit Court at Hartford
: Copu. The sumo question appears to be in
olvel in tho caBo brought before Judge Tiptol