Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1876-12-20
From the Chicago Inter- ocean.

dlrS Oh the FallrOuu 1FOm september,
1863, hitherto, whereby Winston, as
President; Campbell. as director,
Ind Drury, as general solicitor, i'm
properly, as it is alleged, converted to
heir own private uses large sums of
and other resources of the
company.
The Chicago & Southwestern Rail
way Company of Missouri, of which |
Winston was President, and the Chi
cago & Southwestern Railway Com
pany of Iowa, of which III. M. Aller |
was President, were organized to es-
tablish line of railway from some
undetermined point Of intersection
with the Chicago, Rock Island & Pa
cific Railroad Ia Iowa, to a point on
the Missouri River nearly opposite
Leavenworth, Kan. On Sept. 25th,
1869, the two companies were consol-
idatcd as the Chicago & Southwestern
Railway Company, with capitol
stock of s., 100000 divided into shares
of 500, with leave to increase the
same as well as issue bonds,no to ex-
coed $6,OOO.0 900, secured by mortgage,
in order to carry on their enterprise.
Winston became President, and had
full control of all the money and re-
sources of the company until October,
1872. 1t is charged that Winston
made a secret agreement with the
contractors of the road by which he
participated in their profits, and in
fact became himself the contractor
for the road. Winston, to serve his
purposes, took the larger part of the
stock in his own name. The stock
had no market value, and Winston,
Campbell, and their confederates, paid
no actual value therefor. The bill
says these defendants intended to OBJ
tain large loans abroad and at home,
and pocket the profits.
On Oct. LIST, 1869, says the bill, Win
ston and his confederates made an
agreement with the Chicago, Rock
Island & Pacific Railroad Company
by which, in consideration of that
company guaranteeing the principal
and interest of proposed bonded
debt of the Southwestern Company
for S., 600 600, the latter company was
to make junction with the former
at Muscatine, Iowa. The Southwest
ern was not to build any other road
from said point to Muscatine or DAY.
export, nor allow any other company
to use its road without the written
consent of the Rock Island Company i:
that this was to be a perpetual ar
rangement with the latter company
the proceeds of the sale of the bonds
were to be retained by the Rock
Island Company, and in case of de.
fault in the payment of the bonds the
Rock Island Company was to be SUBJ
rogated to all the rights of the origi-
ginal holders, and be entitled to the
lien and security of said mortgage,
except as against the holders of out
standing bonds; and that the Rock
Island Company should have the
right to foreclose the mortgage; also
that majority Of the shares of the
Southwestern Company to the amount
of SO, sos, 900, should be delivered to
the contractors in part payment OF
the construction Of the road, and
should be assigned to the Rock Island
Company as additional and collateral
security.
The Southwestern Company then,
on Oct. 5, 1869,
EXECUTED MORTGAGE TO DAVID
Dows,
Frederic I'll. Winston, and Calvin T..
Barnes, as trustees, to secure the pay
ment of $5,OOO,O0O. The mortgage
covered the proposed line Of railway
$50 miles in length, and the lien OF
the mortgage was about $4,000 per
mile. The bonds were then sold, and
the proceeds paid over to the Rock
Island Company, but Winston had
the handling of it all.
The bill charges that Winston, on
Sept. Is, 1869, made contract in the
name of the Southwestern Company
with one Milton Cartwright to build
the railroad from Washington, Iowa,
to Cameron, Mo-, for which Court
wright was to be paid $500. 600 of
the capital stock of the road, being
the stock, less 81 100000, also all do
nations of rights of way, and bonds
secured by the mortgage for $4,OSO,-
600. Winston, it is charged, made a
secret agreement with COurtwright,
by which he was to receive half the
profits, and Winston and Campbell
both profited largely by this scheme.
Another contract was made on the
same date with the East Leavenworth
Improvement Association to build
the remainder of the railway from
Cameron, Mo-, to a point opposite
Leavenworth, Kan. The price was to
be the remaining 81, 100000 of stock
and the remaining $920,OOO of bonds.
The bill charg the defendants,
Winston, and Campbell, with being
the real contractors in this last, as
we'll as in the first contract, and thus
getting the whole property of the
Southwestern Company into their
hands. The result has been the con-
struction of an indifferent road, and
large profits reapcd by the defend
ants.
The bill then charges that on June
l, 1871,
ANOTHER SCHEME WAS ENTERED INTO
by the defendants, who issued cir.
cular setting out that the road was
finished and in good working order
that it was leased to the Rock Island
Company, and formed continuation
of their line to the West. They pro.
posed to build a branch from Cam.
eron TO Atchison, of fifty miles in
length, which was to pass through
the best portion of the country. Wher
this road was completed they said
that the Rock Island Company would
also lease it and run it. They pro
posed to raise 81, 600, 600 on the secur
ity of the road, being about $4,000
per mile. On May 81, 1871, con
tract was given for the construction
of the branch to ii. NJ. Allcr, who
then made an assignment of the con
tract to Otis S. Glover, a clerk o.
Winston's and brother-in-law o.
Campbell. Glover then made a dec
laration of trust that he held the con
tract for Winston, Campbell and
Burns. On the same day the brancl
was consolidated with the main line
with capital of $1,000, 600, and will
AUTHORITY to issue 100000 of mort
gage bonds for the construction of tht
branch. The proceeds of the bonds
were to be put into the hands of tht
Rock Island Company. Winston, thu
President of the Southwestern Road
was W Uc dllOWctI w AuluioA Olo Al VI
and spikes, and to be paid by TIM
Rock Island Company. The million
of bonds was then put on the marke
by the aid of the highly colored cir
cul rs issued by Winston, who en-
ployed Messrs. Frank u Cans, bank.
ers of Germany, to negotiate them
and Van Weel, the complainant, rely
| ing on the representations of thu
circular, purchased those now held
by him. The mortgage securing then
was q first lien on the AtchisoI
branch, and second mortgage OF
the main line.
1t is then stated that Winston, hay
ing placed the bonds, proceeded t.
alter the direction of the branch SO al
to shorten it from fifty miles, as pro
posed, to twenty-nine miles, and thus
rendered It only q feeder Of the main
line. He, however, obtained the
whole proceeds of the million OF
bonds, some $8l3,85S.26, appropriated
for the building of the intended fifty