The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-04-30
serp.ions mado by tho managers for the same general


and the masters set torth that the accounts,
though kept in the Offices ST Adams have
been kept entirely separate ana apart from those OF
the trust roads IN every respect and ali
between the sullivan and trust roads for engine
car SERVICE and all stock service, and transactions
have been Kept accurately upon the basis Of mileage
and ali stock material aud service furnished sup
Piled by The trust roads TO the Sullivan charged
10 ana PAID or bv the latter The managers submitted
this matter to counsel, ana upon their advice
rangements which resulted IN their taxing the lease
An arrangement then made with the Vermont Cen.
trail road I'd run their trans through to Bellows Falls
the terms oi which arrangement were lett entirely
with Dir. Merrill the superintendent OF the Central.
and Of high Integrity, and We're such assured
ample compensation TO the trust In all particulars
Tho masters find that in keeping tho accounts therc
have been accidental errors and OMISSIONS
charge certain items TO tho Sullivan road winch are
properly charseablc to its account and these errors
corrected IN detail in their report The status OF
the lease. &c, well understood by all the officials
OF the trust and the accounts examined and approved
IRON time TO time by the ADVISORY Commltee They
say:-"Ihe trust has received no dctrment in the
operation Of The Sullivan Railroad IA connection with
the trust roads as IL has boon DONE
rHE MONTREAL AND VERMONT JUNCTION.
Win regard 70 the Montreal and Vermont Junction
road, connecting with the Vermont and Canada at the
province line and running TO St. Johns where II con-
meets with the Grand Trunk IL appears that ut tho
time Of It's construction, the builder having tailed ana
abandoned his contract Joseph Clark and j. Gregory
Smith undertook to furnish money ana complete the
condition that tue Vermont ana Canada would
take il OF their hands when finished. This under.
standing not carried out because or
grave doubt as TO whether the Canada beng but
leased road could take IT, and Understood that II
could be transferred 10 The trust An arrange
ment was finally made that the trust should operate
the road and Clark Smith keep u IN repair the gross
earnings 10 be equally divided. THIS basis wasscttled
upon by MIR. herr.lI tho superintendent This
rangemen. continued up TO 1872, when the Bondhold-
profitable TO Clark Smith. Alter consultation
among the parties Interested an arrangement was
made, 10 take effect June /, 1872 ny which Clark Y
road from the Central Vermont Company.
The Board OF Directors Of The Vermont and Canada
Company voted 10 obtain possession OF the Montreal
and Cnampain Railroad Tor the sake oil important
connections, and appointed a committee Tor that pur
pose but the bJccl defeated by the Grand Trunk,
which secured control oil said road II was thcn
deemed advisable to obtain control OF tho Stanstcad,
Shenord ana Chamby Railroad for tho pur-
poses Of important connexions, and 10 pre-
vent the Grand Trunk from getting com
pcling connection by y with the Passumps'c
road, which IL was then trying TO do TINS arrange
ment linally made, as the masters find, senircy
the interest anu for the benefit OF the trust the
the Montreal ana Vermont Juncton road, through
which II was expected II would eventually pass into
the hands oil the trust during tue negotiations Clark
Smith were constantly IN consultation with the Yer
mont and Canada directors aud Bondholders' Com
mttee
The masters find that the arrangement under which
CLARK Smith were TO receive one.haf the gross earn
ines OF the Montreal and Vermont Junction road was
only intended to he temporary and continue until some
permanent arrangement should be made. They nhi
the OF constructing SAID road TO have been over
$7U0 OO0 and that fair rental for the same during the
whole period IT'S operation by the trust is $40 600
per year. and that q settlement should DO made with
| Clark 4 Smith upon that basis
| The masters Ind that all tho benefit and money
arising from the transactions OF Clark Smith. in
relation TO the Stansead, shctord aud Chamby road,
up to tho time purchase by the trust. INJURED
tho benefit OF the trust u beng by all parties UNDER
stood that they acted behalf OF the trust and had
personal interest in the matter. Tho trust roids
being foreign corporations, could not take lease d-
rect OF that roud The trust purchased tho stock Of
the Stanstead Shenord and Chambiy road IN 1868 a
road was constructed from connection with tho
| Stanscad, Shelord and Chamby road at Waterloo to
certain copper Mines concernlns wnch many cna rges
The find that IL was constructed by the trust
was regarded MS judicous investment aud allow The
items OF account representing that expenditure. The
trust had oilers to take the land grant coded
account OF this tram ROAD by the Canadian govern
ment, and pay Tor he road.
CONTRACTS WITH OTHER ROADS
With relation TO the contracts nac oy tne receivers
ana managers with the Rutland Railroad Ogdcnsburg
and Lake Champlain Railroad, Northern Transporta-
ton Company aud Misssquoi Railroad, and tho items
oil account representing such transactions, which arc
carefully ana saccincty presented n tho report, tho
facts stated and found show that said contracts and
| transactions were madc by ana with tho advice and
consent OF the Vermont and Canada Company ana the
| Bondholders Committee and with Wow TO the BEN
eft advantage of the trust property and there
| no findings OF fraud, mismanagement or improper
conduct the part oil tho receivers ana managers
relation thereto.
Company the masters find that, prior 10 the charter
OF that company oy tho Vermont Legislature In 1868,
the gauge OF the Vermont Central Line aud Of the Grand
| Trunk Railway being different 1t was Impossible to
carry through rcshts by rail without breaking bulk,
consequently these roads were unable TO compete
Tor through business with tho other east and west
lines An .adjustable axc'' had Just been invented,
which, II found practical would oDvato this difficulty.
IL was, however regarded as an experiment, and Tho
managers OF the several roads the lac,
ing, had doubt Of Its success and were unwilling to
try the experiment, but were willing 10 pay liberal
vention II any Que would run tho risk
OF building them The price OF the patent
$50, O0O and none OF the ROADS IN the Vermont Cen
trail line had any money to invest IN such an enter
PRISE. The National Car Company was organized Tor
this purpose Outside parties would not buy the stock
unless those having an interest In tAe roads would sub
SCRIBE and managers OF roads all along the limo from
Boston to Chicago, being deeply Interested IN the
cess of the experiment. subscribed personally Tor tho
stock and the company was organlzed purchased tho
patent and built 200 cars. The experiment proved
more sslul than was anticipated The stock was
sold at than par value Of the persha-
bio nature Of the property, the average lilo Of car be-
ing only about seven years. The price paid by tho
several rail- Tor the OF these n; first
three ce1ts per mile, which has from time TO timo
been reduced until II now glands at one and a half
The dividends paid ON stock have been ten per cent per
rho Vermont Iron and Car Company was organized
In ISL It's been built ut tho shops VI tho
Trust, which mas received lar compensation thero-
for II also has Tor repairs upon the cars OF this aad
the National Car Company Tho same car service has
been paid each o those companies by all the roads
in tho Inc, the same dividends have been paid
upon the stock oil each The masters lind that "the
subscr ptions to the stock were made with view 10
help tho roads 10 tho necessary rong stock TO build
UP the ine.n
IL was claimed by counsel for tho bondholdcrs that
the through Western business was not remuneraiivc
and should Dc abandoned by tho trust. Tho masters
find that certain classes oil business II thrown up get
managers tho ierent roads In the line have agreed
In dccmng II the best course to retain Inc traffic.
awaiting rev val oil business The managers have in
all got the highest rates they were able 10 OBJ
tain.
The stock in these car companies necessarily pays
better dividends ut rst than aitor tho cars became
worn. The masters say Ill Is regarded by some as
better poIcy tor road 10 own its care. ana this IS
Doubtless true, provided they have the funds
to SUITABLY their road In this Instance the trust
had funds with which TO purchase cars, and the
managers did cc nj liberty 10 borrow ana thereby
place another equipment loan upon the road"
VERMONT AND CAR COMPANY.
The Vermont Iron aud Car Company was originally
organized to build cars oil an unusu length meet
tho demands OF the lumbcrmcn oil Ottawa, the bond
holders Ucng uawiiiing To place any additional debt
upon the trust Tor that purpose. Alter time these
two car companies became consolidated. The trust
collects of the service these and pays
IL over 10 the company, In some nstances making a
pront as some oi The roads pay them car service on
tonnage basis, wnc Tie trust pays ON mileage basis,
thus ikng uroiil the trust OF $500 70 IL 900