Marshall County Republican. (Plymouth, Ind.) 1856-1878, 1876-12-14

debts should he represented by stock and
bonded Indebtedness, which new stock and new
bonded Indebtedness should be distributed according
to the terms OF the agreement for reorganization by
the trustees, /. e., the purchasing committee. The
agreement made, the road purchased under
the agreement, aud new securities distributed.
"oecond- The laws provided that within six mouths
after the organization of the new company, all
claims which, under the laws of the agreement were
TO be satisfied by the mortgage bonds of the
company, must be put in, and at that time-namely,
upon the expiration OF the six nonths-if such
claims not properly made upon the new COM
pany-f the old bonds and coupons
dered at that time-tney ceased to be claims there
'.In June 1851 the certificate of incorporation of
the new company was filed, and in hat month the
ration, OF the hands of Mr.. Azarah C. Flagg the
Trustee who had been In possession of the
'or consideraoie time by virtue oil the provisions oil
new organization.
."'Third some time in the year 1868, more than six
months after the organization of the new company,
Mr.. Fiagg made and printed a report, showing in
detail the distributor OF the securities of the
corporation, and after including thing that was
claim 10 be satisfied by mortgage bonds of the
new company. and all the expenses of the reorganiza
tion including $4,000 to Mr.. Baysrd, Chairman of
the Purchasing Commitee and $500 to Mr.. Charles
Butler, each tor three years services aud SCI
Mr. Samuel J. Tllden counsel and trustee, these
payments being in cash. he states as follows:
"'lt Is seen by the preceding statements that the
trust mortgages under which the first and cond
bonds are issued horized the creation Of debt
equal to $2s4 us 20 beyond the basis furnished by
forth:
THAT lie saw, issuing the new securities they
had very prudently allowed for a margin and
above what would be properly required which mar
gin alter the accounts all made up, seems TO
have been this sum of scs47is 70'
I'm point of fact, everything which, by the terms
OF the agreement OF reorganization, was constituted
claim upon the new bonds seems be covered in this
account. In point of law, IL within the power
OF the purchasing committee TO create new Liabilities
for which these bonds should become responsible in
asmuch as the time allowed by law for the presena-
ton OF claims on these bonds had expired. And at
this time, when in point of TACT, everything seems to
have been in, and when, In point of law, no new
claims could be created upon the bonds, when
the purchasing committee had been compensated for
their services, the final settlement had been made
with the counsel and tine printed pamphlet
was put out, containing the whole history of
the reorganization aud the full statement In deta OF
the accounts Of the purchasing committee this surplus
oil bonds Is acknow lodged in the hands of the purcha
ing committee These bonds it is apparent should
that time have been cancelled or placed in possession
OF the corporation for their use since the limit
the power of the purchasing commilee to disburse
virtue OF which they existed trustees and every
demand upon the bonds which would arise from the
reorganizng agreement had been actually discharged
The only subsequent mention OF this surplus of
bonds appears in the annual statement made by the
Executive Committee to the stockholders of COM
pany. dated March, 1864, in which the following
| ton of them Is made:
"Tn the final adjustment with the purchasing COM
mittee Of all outstanding liabilities of the old
pany which by the terms Of the bon6hoders' agree
meat for reorganization, be paid in and
second mortgage bonds, II is probable that about
preferred aud SIS 900 of the Income bonds may not
be required aud may be ultimately cance!ledl
Two OF the three members of the Executive Com
| mitee were also members OF the purchasing COM
mittee
'The only other fact we have been able to ascertain
with regard TO them rs that by examining the
account OF the company contained in the annual
ctatemen early 1866, they appear 10 have been
all issued aud be outstanding as liability upon the
company, without any apparent explanation appear
ing Ia The published statements or accounts Of the
company. These facts called the attention OF the
aud requested explaution Of these facts which
might be within their knowledge, and PARTICULAR
from the President, tho familiar with details
of the reorganization. The answer which received
by us from the hands OF the President that this
bonds, and the committee referred Mr.. sam uel
j. 1iden for detailed explanation OF the whole mat
ter
den had sailed for Europe; aud We. therefore, called
upon Mr. Butter for such explanation rs be desired 10
make, either as To what, in fact had become Of the
bonds. what in Law, was the nature of the claim
under which they had been disposed Of distributed
| He informed US shat in Mr.. Tdeus absence ne de-
eliued lake the responsibility OF making any
ment win regard to them. He stated that IL might
be assumed that the purchasing committee claimed
that the bonds lett after the be-
longed TO them personally; but he would make
statement TO what disposition actually made oil
them In this case The claim that the surp bonds
belonged to the purchasing committee Is considered
By sbsnrd. In view Of the iscts to require
commerI"
THE CHARTER VIOLATED.
The facts above recttcd taken tsTtGfum Gferdfnu
from the report oil this COMMITTEES, certainly DAM
aging TO Mr.. Tilden aud his purchasing committee;
but they q, not embrace all the charges which the
Committee had 10 make. Further on In their report
they tell the story Of violation of the charter winch
it Is best TO give In their own words, and which
as follows:
EQUIPMENT BONDS.
"The last matter which ne called the attention Of
the board with reference to the $500 900 10 per
cent equipment mortgage bonds issued IN 1870, and
sold by the Directors In that year 81. reference
TO the charter Of the company shows that this in
direct violation of its specific provisions with regard
TO the issue Of the mortgage BONDS. The pro-
yides:
".And the said corporation may make and issue Its
bonus, OF not less than Sl0C each, pa
BILE ut sucn times aud places and bearing such
| interest," not exceeding seven per cent per annum.
payable sem-apnualy nj such place places ma
be agreed upon, as II may deem expeiient; and may
hypothecate sell such bonds within or without thi
s,sie, whom issued. 10 raise borrow money n
price not less than 80 cents the dollar and al oe,
bonds 10 be Issued shall he sold or erc0ngef at par
| 'rhst is TO say, ali the oonds which the company
could issue under its charter he per cent
bonds. o. must be sold NJ par, one or the other.
''Ihese equipment bonds bearing interest at 10 peI
cent, could not be sold under the charter therefore
al less than par IL would SEEM therefore, 10 be m,
duty OF the Directors OF the company, mad issued
these bonds In violation OF the charter either to see
il that they were reduced 10 per cent. bond, Oh
that the difference between 81 and par, with interes
at 10 per cent. per annum. since 1870 should he 70
turned to the treasury OF the company. This claim
at .hi s u%e 70 aeon, 5000 seemed
Directors Of the company, inasmuch as the
ers were consulted with reference to the issue
that bond. the Directors having themselves
the responsibility OF H."
THE NIGHTS oy THE PREFERRED STOCKHOLDERS
| VIOLATED.
Further In the report of the committee are TO bs
found the following grave charges of violation Of
| rights of the preferred stock holders:
ala that connection called the attention OF tn,
board 10 the improperly aud ilegaty of which the,
were guilty, In recognizing the coupons upon thes,
| bonds a lien upon the earnings Of the company
prior the dividend upon the preferred stock Sine.
1870 when these bonds issued the coupons have
been regularly paid; but no cash dividends nave beer
paid the preferred stock which In direct VIC
ation OF the contract contained 10 the second mort
gage Of this company, which secured the priorities
the second mortgage bonds and Of the stock
"The provision in the mortgage is In these words:
"'Nor shall any deed OF trust mortgage creating
lien upon tue property herein before describec ia
priority the rgbts OF the holder u the said pre-
| ferred capital stock, be made by said st.
Louis, Alton Terre Haute Railroad Company, un-
less a majority Ia the Interest Of the holders Of the
said preferred capital stock shall expressly
sented THERETO by vote at meeting of holders
called rs aforesaid upon notice as Aforesaid
"This meeting has never been held, aud the con-
of the preferred Stockholders of this
mortgage has never been given. To make addition
ally that the preferred stock shonld always
have lien upon the net earnings next alter the
second mortgage bonds, II embodied In the pre-
ferred ST, ok certificate In these words:
"sThis stock is entitled TO dividends at the rate OF
per cent per alnum, payable annually on the LIST day
81 ~