New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-09-18


and was never paid for in cash or 10 any
ming of value The earnings OF the road anu
oeranh have not been sufficient TO interest ON us
floating debt and its bonds New ties, rails, ana equip
ments will be needed Ia few years Inc lneo"o
bonds OF $4,000 600 mature in September 1915 out no
fund has been provided either for equipments .,
for the payment OF the bonds. Interest on United
sta,es bonds il accumulatng without payment The
is I'm fact nsolvent Tue bonds issued Dy the
Government were than sufficient to prepare INC
road for the rails and equipments and the procecuS
those bonds reasonably expended would have maze al
annie basis for securing such amounts OF FIRST mort
gage bonds authorized by acts OF Congress as wOuu
have completed the road and telegraph.
SEC 1e. formal commencement of the work was
mazda in December 1885, but not much done until
the persons hereinafter named had taken charge OF the
work in their own interest contractors, but In the
name Of the Credit Mobilier OF America. The com
panants charge that IL not the intention or the per-
sons hereinafter named to proceed in the building OF the
road and telegraph accordance with law but to abuse
the trust connded to the corporation.
SEC IT, In October 1868, the stockholders elected 30
directors and declared with only the limitations
required by the the affairs property and bust
ness OF the Company should be conducted managed and
controlled by the Board OF Directors. officers were to
be elected by the directors.
SEC 49, This section treats Of the contract for build
ing 100 miles Of the road with one II. NJ Hoxie, man
known TO be without means or responsibility. and his
name was used merely as q to disguise contract
made by Thomas c. Durant and his associates on the
SIDE with themselves in the name of Hoxe on tho
other The prce stipulated greatly in excess OF
fair price.
SEC 49, The Credit Mobier started under the name Of
the Pennsylvania Fiscal Agency" This name was
aferward changed TO that by which 1t has been so wen
known since-the Credit Mober of America. The char
ter conferred wide and extraordinary powers for deal
NTH road
railroad securities general speculation The rest
of this section contains charges against the officers and
managers OF the Credit MObier OF America Tor fraudu
SEC 90 The intent of Durant was to substitute the
Credit MObiher of America contractor for the salu
Hoxie, himself, and associates. who had undertaken tne
Hoxie contract. Il. c. Durant was elected President
and entire beneficial interest in the ioXe CONTRACT
was transferred TO the Credit MObiier OF America.
SEC 21. II appears from this section that the de-
PENDANTS purchased in tho name OF the Credit M0oer
Of America the stock IN ths GUn oda fa 5y those
who were considered stockholders IN SAID company IN
were transferred to the Credit Mober Of America:
SEC d. The same persons, between March, 1866. ana
January 1867 caused $1,000 shares of Union Pacific
Railroad Company and 100000 worth of certificates OF
indebtedness to be transferred TO- them' elner as lu
viduals or the Credit MoOilier OF America, TOT
merely nominal consideration
SEC 49, In February. 1851 the defendants having
nonnaly increased the capital stock OF the Credit Mo-
ber OF America TO the number Of $4,000 shares pre-
tended to have the number increased 10 SI,9yc ana
caused be issued TO each stakeholder additional
shares equal in number TO Oneha the number SHARES
then held by him. TO be taken at the sum OF 800 per
share. These shares were taken by defendants. Inc
pretended increase was a mere device for making
division among the said defendants stockholders of
the Credit Mobilier of America OF l25o fst mortgIgo
bonds pretense of payment for construction The
persons who took the increase OF STOCK received one
bond for each ten shares Of increase aud PAID no more
SEC a. This section shows that the ownership Of
stock aud management of both corporations were the
same II seems that the c. Nj. of A. obtained from
the original subscribers for stock IN the u T. H. H. Co.
all the original shares outstanding with lew exceptions
and thenceforth the said defendants owners OF $1,000
shares In the c. NJ Of A. became also the holders OF all
the stock issued By the officers OF the u r. Il H. Com
pany. ,, .
the c. NJ Of A. as assignee Of the said Hoxe contract
5000 shares the U. p. r. r. Co. account OF con
strucOn OF SO miles of said road and telegraph which
shares distributed among themselves stockholders
Of o. p r. r. Co.. in their character as STOCKHOLDERS
therefor list of the names of such fraudulent
cIpens of stock all included III the list OF defendants
SEC g. All the defendants we're Jointly interested in
the BOxie contract. The whole work done and set
Co.. who in their double capacity OF representatives Of
the c. NJ Of A. and the u F. T. r. Co.. contracted with
with themselves and divided among themselves az pro-
ceeds amount of property and obligations of the
IT, u. r. r. Co largely in excess OF far price Tor ser
SIC o. The contract with Cakes Ames was similar in
nature and interest the Hoxe contract 1t intended
direct spoliation of the Union Pacific Railroad Com
pany of S00OO without equivalent, under pretext OF
contract TO build and equip portion OF said road and
telegraph which had been already DuiiI, equipped ana
SEC 49, The actual cost of the construction of said
road was 80 much less than the contract Pce, taat
declared Dec H. 1867, of s225O0OO on the first mort
gage bonds and equal amount on the capital stock
On the sd of January 1863 another dividend was de-
eared of $4,000 ON the first mortgage bonds on the
18th OF June dividend OF s60OOOO on the capital stock
and $2,250,0o0 in cash.
had guaranteed the performance Of the Cakes AHes
contract called by said trustees TO whom the
defendants despoiled the Union Pacific Railroad Com
pany Of ITS assets, was no longer used as pretext for
nd asadf ded
guaranty and from the obligation TO make advances
under said contract and assigned TO SAID trustees az us
Three more dividends, amounting in all 10 500
first mortgage bonds, S,l25000 in cash, and 1900
shares in the Union Pacific Railroad Company, were
declared.
SECS 81 and 49, These sections explain pretended
Davis contract OF the same kind For the carrying out
of this the land grants and income bonds here
referred to issued and sold TO Of the
defendants for much less than their actual yalue-n
one at IS per cent of their face in another
70 per cent OF their face and in another at CO per cent
SEC 49, This section declares that the said contracts
were not genuine, but devices under which
road Company the Credit Mobilier of America, the
trustees for the contractor and the contractor could
settle matters exactly they pleased and distribute
bonds and other stocks as their cupdity might die
tate
SEC a. IN addition TO the 2377 shares Of stock in the
Union Pacific Railroad Company subscribed for here
inbefore mentioned, all OF which acquired BY the
Credit Mober OF America, II made other subscriptions
and assumed the subscriptions OF Hoxle & Durant
amounting in al to $1,000 shares, all OF which dis
trDuted among the defendants. In addition, u sub
scribed for 10000 shares OF the capital stock The sub
scrpton still remains the books Of the Company, but
the shares have been issued And said assgnees
under the cakes Ames contract subscribed
took Distributed and promised to pay for at differ
times 1890 shares of Union Pacific Railroad Com
pany stock And said assgnees OF the Davis contract
also subscribed for and bound themselves TO
take and pay for 10000 shares issued TO them
ants. Neither said Credit Mobier of America
nor said trustees have ever paid any OF said
subscriptions nor for any portion OF the shares issued
10 them Said defendants allowed the prices
agreed TO be paid these several contracts 10 be
charged against the Union Pacinc railroad Company
and also credited said Credit Mobiier OF America and
said trustees such excessive charges and thus set
off the contract prices against the subscriptions the
accounts between said parties The tUnion Pacific Rail
neYer settled with the Credlt MObler