The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1873-11-27
Another Credit Mobilier Overhauled
and Shown Up.

Another Credit Mobilier Overhauled
and Shown Up.
CHICAGO, Nov. 26-Judge Upton, o.
the Mclean County Circuit Court, rem
dered decision yesterday in q case
brought against the directors oi the Gil
man, Clinton s.. Springfield railroad,
charging them with gross mismanage.
menI Of the company's affairs, and pray
ing for the appointment Of q receiver. II
appears from the evidence as summed up
by the Judge, that the actual cost OF con-
structing and equipping the road was
about one million and q half dollars
while the Morgan Improvement Company
received for rendering this service about
four millions of dollars. The Morgan
Improvement Company was incorporated
In Pennsylvania, May 9, 1870, and, 80 iar
as the evidence in this case discloses, 1t
was organized for these purpose Of con.
structing this road. It had q capital oi
half million, divided into ten shares OF
fifty thousand dollars each. Fourteen
days after its incorporation, 1t entered
into contract with the Gilman, Clin-
ton s. Springfield railroad. The directors
and President tof the road, who had
been principally concerned In letting oul
contracts to the improvement company,
are shown to have been let into its enor.
nous profits for merely nominal consider.
tations., 1t Is also charged against the
railroad officials that they made q ruinous
contract Tor The road with the Barclay
Coal Company, of Michigan, in which
they owned three quarters interest that
they made an unlawful transfer Of the
road to the Pennsylvania Company, and
that ii other respects they were guilty OF
breach oil trust. The court then recapitu.
lates the grievances complained of, and
discusses at length the English and
American law. concerning the circum-
stances under which trust property will
be taken out OF the hands oi trustees who
are mismanaging and iraudulently apply
ing said trust funds. The modern doc.
trine and theory Of the Illinois law Is, that
railroads are public highways, created BY
the sovereign power of the State, and
that the corporation ID authorized,
through It's board Of directors, TO
construct, equip and operate the
same so long as such directory shall re.
main true 10 the interest conferred upon
them by law. That they are so lar apublic
that at the time Of the con.
struclion OF this road, and at the adoption
Of the present Constitution OF Illinois,
my property could by tho vote OF the
county, town or city not only be convert
ed into capital stock Of the railroad COM
psny, but by like vote ] could be COM
PEELED to donate my property to the capi'
tai stock Of railroad company and that
the property Of the corporation Ia trust
fund In the hands OF the Board of Direct
ors. The townships that have become
parties TO this proceeding did not do
nate their bonds voted 10 the company,
but on the contrary, they subscribed 10
its capital stock Tor whichiitf Issued
Its bonds, dollar forldollRr, and no .rea.
son Is shown by this proof why the capi.
tai stock Of this railroad company Is not
worth par value II the cost Of
constructing and equipping the road did
not cost TO exceed one and half millions,
and the road has paid the running ex-
penses and interest on two millions since
Its completion. With the bonds voted
along the line and loan Of one million
upon the road, which Is right and would
have constructed and equipped the road,
the stock should be worth par to-day. l
assume this fact upon the evidence in this
record that the Pennsylvania Company
could operate the road, pay interest on the
two millions Of first mortgage bonds. and
the current expenses Of the road, and
leave q surplus to apply on the one mil:
lion ofincome bonds intended to be Issued
In lieu Of the one million Of second mort.
gage bonds now In the hands oil Thomas
a. Scott. lit Is true that The stock Of
this railroad company ought TO be worth
dollar for dollar, we are led to inquire
whether 1t is proper that the stock
should become substantially worthless
and encountered with three millions debt.
The company's books do not show the
cost Of construction and equipment, nor
do the defendants deny the proof Of the
as to the cost. Another
thing, which Is apparent from proofs, Is
that the board OF directors are controlled
by the Morgan Improvement Company.
The court then proceeded TO discuss the
other points Of law in the case and to cite
authority, which lead to the conclusion
that the relief prayed for. In this case
shouldbe granted, concluding as follows:
1.-THE court is Of the opinion that under
the circumstances Of this case 1t Is proper
10 appoint Q receiver 10 take charge Of
and manage said railroad until 1t can be
who its legitimate s.ockhold.
ers are, or TO whom the custody and man.
agement Of said railroad should be CON-
mitted."