, 1874-03-26
How Shippers Manage to Get Cheap
Freight Rates.. j..
Expoilicnts Of General Freight Agents
10 Eyado their Agreements.
How Patent Rights Affect
Transportation.
Convention Of The American Railway
Master Mechanics Association.
Earnings Of the Kankakee Line.


GILMAN, CLINTON & SPRINGFIELD.
Special Dispaeh to 1he Chicago Tribune
BLOOMINGTON, ILL.,, A1aroh 25:-1n tho Mclean
County Circnit Court, on Wednesday, tho casc
Of Joseph ]. Kelly and others against the Gil
man, Clinton l. Springfield Railroad Company
took new departure. It wilt bo remembered
that a week or 80 ago, Col. Tom. Scott and Hugh
J, Jowctt Trustees for the f1rst-mortgage bond.
holders Of the road, applied to tie Court to have
.io road taken away from tho Receiver. md
given to them. Now, new parties are coming
forward in tile cnae, and want finger IN the pie.
Morton, Bliss, L Co., the Now York bankers aud
brokers who negotiated tho first mortgage
bonds. haro filed motion asking that they and
n long list of English and Dutch flrst-mortgase
bondtollcss be allowed to become
PARTIES DEFENDANT IN THE CASE,
and TO flc cross-pill in order that their rights
may be protected.
Thoir csons-bll, which is n long statement OF
about fifty pageB Of foolscap, recises the whole
history Of tho railroad and Of its contract With
tho Morgan Improvement Company, by which
s.,e road was built. It. then goea on to say
lint In part payment for their work tho Railroad
Company gave to the Morgan improvement
Company 52,eOo,0 900 Of bonds secured by
flrst-mortgago on the road, In
which Col. Tom Scott mud Hugh
J, Jewott are uanled na tho Trustees
of the holders Of tito bonds: Shortly after this
issue Of bonds tllo Morgan improvement Conf
pany offered tllon1 for sale in Now York and
London. There Was doubt about the fact
whether tho mortgage would cover the rolling
Btook, or other porsoual property Of tue road
and thero was doubt III to whether, undor
!loir constitution contract, tho Morgan
Improvement Company wore obliged to
squip the road with engines, cars, tools,
etc., and, with these doubts, the bonds
were found to bo unsuitable at reasonable prices
for such securities. In order to obFiate thoso
difficulties and make tho bonds sa1ahle, tho Nor
gan Improvement Company induced the nnliroaa
Uon,pany to mako alid deliver to Scott and
Jowett ...
SUPPLEMENTAL TRUST DEED,
dated Jan. Is, 1879, by which it WAS provided
that the bonds should be lion on all real and
tho Morgan Improvement Company entered
into writton engagement by which they agreed
to equip tho road. rlon these bondholde,s paid
% cents on tho dollar in gold for the bonds.
sion Of tho bonds till Jan. +. 1872. The bond
holders wero paid ali thor interest coupons a
they fell duo, till the sa'ni-a,n!l% coupon that
an. fol- due S,ocdSas srsh this ona s4 hess as bp2
holders have Just ascortaiued. were not
paid out Of the surplus earnings OF to rnslfoad,
but were paid by the Company throuEli'tlie Nor
Ean Improvement Company, The Morgan I'm
proyement Company was by Its written gnafan.
tco above mentlorod bound to pay the same, II
tho Morgan improvement Company have any
claim for the Same it is either d simple debt
against the railroad or at leaat Is junior and bub-
jcct to tho lien Of tic trust deeds given to Scott
and Jowott, tho bondholders.
IL ntcuf fl1nf in 1a
bonds vero issued for tho 81. 000, QUO md placed
on sale, but, by reason Of the doubt montioueu
lboye, before thoy could 30 sole, two Of tho
COUPONS, AMOUNTING 70 Sl4o,Qoo,
Ind fallou due, yheraupon new bUnus wero llth-
nyraphed the enme III the first, with tho OK
ceptjon that these two coupons wera left off, tho
understanding being that the old bonds and cos-
pons should be destroyed. But tie bondholdors
aostroy these two last coupons AZ it WAS agreed
;hey should, but on tue contrary they now hold
tho1n, aud claim that they aro secured bv the
lien Of the hrBt-mortgago,; that the Morgan
Improvement COMPANY sod these new rev ,; eo,a
mortgage lobt of tho Company.
Tie boudholdera then say that
SCOTT AND 1EwErT
arc, or at least one OF thom III, g. heavy stock'
holder in the Morgan 1mprovement Company
and, ip tho interests Of that Company, aro at
tenp.ing by violating tho trust aud confidence
roposcd III them as Trustees, to iu1nre and de
fraud the bondholders, whoHo bonds are Heeuret
by the trust deoda. to the extent of Sa2o, 900
insolvcnt, and tllat not more than one-half o
the S2000,O00 bonds can be realized under tn
most favorable circumstances.
The bondhollorB further stato thai tho Morgan
Improvement Company aud the Hallroad Com
pany wele. in 1878, negotiating and about chect
tng d lcase of the road aud all it's property tt
tho Pennsylvania Company, BY, tho torns Q
which seconl-snortgago was to DO executed ..
$1,000, 900 in boialls, called construction o
we'll as tho payment of the s20oo00
tlrst-mortgago bonds was to be g.1arantoed =
tile Fonnsylyania Company. The proceed
nrislng out Of tho sale Of This one million oquip
.nent bonds woro to be paid to the Morgan In
provement Company for money claimed to b
duo tllo1n TOR advances mado OIL account OF til
railroad for rolling stock, equipment, etc., all
also for mouoy advanced to pny the above-me,
toned four coupons on the tlrat-mortgago bondt
AZ we'll rs tho two coupons cut o.
from tho old honds that were destroyed, mud th
residue was to ba used in fencing tho road. fur
nshing further eanfpmontH, otc. This leaso wa
about to bo consulnatcd when laat July tho cas-
of J. i. Kelly ind others WIS commenced againt
tho Directors, which resulted iu an in1uctlo
against the making OF tho lease and tho plactn
nf tho road in the hands of Mr. Hinch'ey at III
ceiycr.
Tho bondho'!ers then 60 oil to say that NJ
THE HOAD 1S INBpLYEET,
all tho security they have for their mona
is the property Of The road. which IL not aut!
cent to pay more than half of their debt, mt
aa the interest coupon duo on tho lst Of Mare
this year il not yet paid, tho road should bo az
1niniBtered for their bouetlt. Thoy rocte II
fuct that Scott and Jewett have tlieda petition
lha caso asking tint the road bo taken OF
OF the Reooiyer'a l,ai,ds and turned over
then, MI tho representatives Of tho bondhollol
in consequence Of tho nonrpayment OF tho intel
cst, which thu Trustees allogo not to have boc
paid On tho lust xix coupons, amounting
:i2D,D00 in gold. Now guy tho bonaholder
Scutt ani Jewott vol know that all these coupon
oxcopt thoso overluo March !, have boen ful
mud NJ far an tho bondho!ders arc CO,
cornod. and that they wore IN fact pa
by tho -Tailroal Company through Tho .A1orgl
improvement Company ind other parties vi
advanced the money. Tl1oroforo, mono OF tho
collponh are first lion OH tllo road, e:aopt Il
ono due March /. .--.'
THE noNDHoLDEHH STATE
that, as Scott IL lnrge aoolI,o'acr In tho Mo
gan Improvement Company, he an1 1awett y
frying To- get poAaonHIon OF the road with eha !
tcnt to yloato thoir trust, and to 1aieapp'oIsia
1f