, 1876-04-22
RAILROADS..
Tho Rockford s. llOc1e island
Road Again In Hot Water.
Allegations Of Improper Conduct Made
Against Mr., 0storborg.
The Court Asked to Again Appoint
a Receiver.

a Receiver.
Uncertainty About Eastern Freight Rates
...lIow tho Pool Ended,
THE ROCKFORD, ROCK ISLAND h ST.
LOUIS.
NEW rnArTEn IN THE LONG LITIGATION
Last sumn,or 1t will be remembered, tic
sold under consolidated mortgage Of 90. .000 900,
by tlccreo Of tho unitod s.atos Circuit Court.
Ani purchased by ono uotfnann Ostorborg, on
brilaf OF iargo number OF thb holders OF tho
mortgage bonds who reside In Germany. Tho
ta'e WIS confirmed III Novonsbor following,
md 3 few weoka ago Ostotberg paid
M tho remainder Of tho purchase
money. slncc Novenbor OstcrborR bus
bccn In possession Of tho road, aud glowing rc-
ports havo appeared OF hta management.
bill was filed yesterday. however. by nltsa
Jcsaica II. Hooper, Of Now York Cisy, which
Ssrgs sgs eouduos 3 s sn3 anssonens r5a Iii Il
supplemental In character to tho foreclosure
suit. and the complainant is > ho!dor Of some Of
tuo 1lat-Inortgsgo bonds. She sets. out that tn
ths agg1ogato amount Of 81, ,ooo, ,o0o. and secured
tl1om by mortgages on tho road. Tho
comprised 5000 bonds Tor 81, ,00O each, aud was
socutol by asat trust-dooa on the no1thern
ena Of tho road. Tho hoconl serios, compr'alng
1000 bonds. was issucd In October following.
and secured By q trust.1oed on gil tho road but
subJoct to tlo prior lien Of tho frat trust-dooa
IN Germany. III 1873, or prior thoreto, tho Rail-
road Company became embarrassed, and failed
10 pay tho intarost maturing from tltno to limo.
4 committed was then organized in Frankfort.
Germany. with Tho avowed purpose Of protect
ipg lilo bondhoiaors. ot whon, osterborg WAS
ono. Neither 10 nor any Of tho others, hoWoyer,
wore bondholdcrs. They tnon induced ~ many
q the 5bndholde1s as 'hey could
u 'aGpasr attornoy D to ''s oct with tnen,,
and in 1874 it w.s resolved to forclose tho truat
deeda. OBserbarg was appointed the delegate to
como hore hnu he came md oomneneed lore
closure proceedings. Judge Drummond held,
tho hoIdesb Of tho irss serioa OF bonds were
eutisod to preferences oyor those owning she
second serica, 10 bo first paid. and tloy sub
se1uently wero awarded 81 per ceus OF tho who'o
decree Of foreclosure WIS u,ade. and tho
road sold aug. lG, 1876. BY alr. II. W. Bishop. tho
Muster In ChRucery, to OsterboEg, gu behalf, as
bonaode esea tor o. .he ' s e ot ssae 49, ooS '' To
complainant alleges that this purchase wAs OH
beha1f Of all tho bonalolders, Including horaolt,
who bRd united under tho Committna's dirGc-
tion, and that OHterbbrg in bad faith nugloctol
to mako tim purchase 10 that tho records Of
the Court would show that he held the road for
tho bondlloldets, but took tho titla in his own
nafno. 4 doposit Of S20o,00o WAS given aud
sub equeut payments mado untll recently the
has yet hoen made, nor, US il clAin,od, las tho
| sale been finally conllsmotl.
In the powers Of attorney given BY tho
bondholdora Ia tho COMMITTEES tho latter
were antlorszna to taGo such sssl,s
as wonsu bo> necessary to bring about
the most satisfactory result possible
| Tor tho bontlLuders, to appo1ut nEon,s. or
| traHteeB make compronlihoH+ receive payments,
I etc. Tho expenses VERY to lo borno pro rnt7,
| aud the bonds were to Stand ns security. All
] yorttsemcnts were nade by the Committoo aud
OAterbl,rg during tile foreclosure prncceslugu to
inuuco othcr bondhoidors to jun tho comh1na-
tiont promising Tint thoy Bhould enjoy the same
privileges aa tho original parties to tho agreo-
ment. by tlsiy nleans about 81 600, 600 Of bonds
wero put uudor the control Of tho oomnltteo.
Complainant put In their banda ntne bonda OF
the tirnt series to bu paid toward tho purchase Of
tho road. and gave tho usual power OF attorney,
Osserbcrg promising that she should have
| al oqnal share with tbs sost In case
10 bought the property. 1lo. hawayer, ss she
entitled 70 preference IN payment GU her bonds
to the amouut Of u per cont, and sho only
learned this recently after she had paid ~ a.
sessnleat Of 90 pcr cent it gold. which ho clai III
ed necosbnry for her, together With tho 0tlor
boiuholdern, to pay, III order to raiae sum Huf-
iic'ent to pay for The property md make somo
tepatta,
The amount necessary to be thus raised vas
stated TO DO 3l.0'l0, 900, and complainant alegoa
TINT 0sserberg alao promlBoa that II shc paid
hat assessment slio should receive first lien on
| tho rend for Hnch amount, and now DondR. and
| that It should b. repaid in tan years with por
| cent Interest. Ilo further 1ntimased that any
defcienoy causod by the neelect Of some OF tho
bondholdarh to pay, would l,o made up out Of
l the remainder. 5ha paid her proportion,
| asI.ounting to u Gao.
Tho Committee aud os.erbers. ~ is a11ogoa,
honda, whethes OF the frat Or second Hertcs,
should be placed on 4 common footing, and rad
pro rata. without regard to- any priority. Thus
resolution WAS The tesu!s Of sosna gnnchinht1unH
| Of the holdora Of tho aooond 8orles Of bonds, or
because the Committee were Interested In this
aecond serias. Tho holders Of abous Ga, $40. .9o8
Of tho bonds have. paid their share, but
the sum raisotl is not snflcient Il. to
and loan OF $500. 900 has been Effected BY tho
Committee from tho Austrian German Dank to
make up the deficit, the1 agreeing TO secure tho
amount by b frat mortgage on the road.
Complainant further clIhrges that Osterberg
ls aboat to receive decd Of tho road aud that
lo will then mako the mortgage to tho Austrian
Pank. which, howaynt. had fuli knowtosge OF
her rights when 1t mato tfle !oan. osterberg
REPRESENTS chat te hah bad 40 offer Of sl,5oo,
| no thought lfa contl set moso, but co!'-
plalnant thinks tho reason whA hocanho ha
| IsManded bonus Of 9lG0. GOO for hfmFetf or tho
Committee "a q consideration for making tho
sale. Bhe thiukH their conduct waa gross
fraud cd her E,ghta aud those Of tho otlor bopt'
hodera; TINT tho property should DO sold for
Tho highest price II woa!d fetch h.wl TINT she
should DO repaid her ndvaucoh. OstorborR In
her opinion il intending 10 keep posaossloa ol
the road III long "a possible or compel tho pur-
chAssrn TO pay b largo bonus 10 ges aid OF Asn,
llo has boom il i,0adoesloli slnco NoVonbar last,
aud his manageuant haH boen failure. as, in.
ntead Of making. tho road pa7 running ex'
pst,soh ha Is losng money. About tlo.'
600 Or abO,09o hhs been iust, and hn has
drawn 9,7G7.03 for his five month"; work, AMI
tho further sum OF sl0310 for intbsest, wh,ch
last amount hah been given to 2 rs1alivo Of Lii
In New York. oticr largo liabilities Tor work OF
| materials Aaye bocn incurred which do not ap.
poar On thb Conpanys books.
Finally. #ho charges that oststhesg IL not
posaeaHet Of much property, aud that what hs
haa IL not in THU country that both hs and the
.etaalnler Of The Committee are plicnss aud tha,
II ha IL allowed 10 keep she property no will
allow heavy lions to be csoatud againB
1t. sbo tnsretoso AXIS thai Recc'.e'
| may be appointed; that OdterborH may ba
tD1utrtlt 10 srcornt Tor his fOprH; and that nov