New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-11-01
WRECKING A RAILROAD.
LA CROSSE AND MILwAUKEEs HISTORY.

JAMES, n. 4. COwDRNY AND TIERS ACCUSED or
CONSTRUCTION ALLEGED CORRUPT cOMBiSA-
TON TO DEPRIVE STOCKHOLDERS or ruEI;
RIGHTS
| complaint will be filed to-day in the United
States Circuit Court behalf Of Walter &. Wooley, OF
this city, and other Stockholders OF the old Ia Crosse ana
Milwaukee RAJ road, against The Chicago, Milwaukee ana
ST. Paul Railroad the 1T Crosse and Milwaukee Railroad
| the Milwaukee aud Minnesota Railroad Russell sage
Nathaniel 4 Cowdrey and Frederick L. james. OF New
| York Alexander Mitchell OF Wisconsin S'iah Cnaul-
be.lan and Ncwcombe Cleveland, OF Ohio, ana Others
The complaint sets forth that the La Crosse and Mwau-
kee Railroad chartered April 2, 1882 to construct
road from Milwaukee To Lii Crosse-2J0 miles The capi-
.al stock was Si,OOOOo0 10000 shafes) In 1856
| the staro Of Wisconsin gave the road 100000
| acres OF land between 1SJ4 ana 1877 various
mortgages were executed for tine alice purpose or Sc
curing bonds agg. esatng SG.66iOOJ, but only small
part disposed OF To genuine buyers at
their intrinsic value IL il charged that scheme was
entered into by Russell &c and Seal Chamberlain TO
the road for their benefit and subsequently,
Mossrs James, Cleveland, Michel, and others
became active members OF the combination. Cham
bel lain procured lease Of the road IL is alleged, and
by q corrupt agreement was given absolute control
without the consent OF the stockholders who, breach
of the part Of the officers and directors de-
priyed of all power and were unable 10 prevent the
credit OF the company from being ruined The agents
and managers, It Is alleged fraudulenty and corrupy
confessed judgment 10 Chamberlain for preteI,- Il
breach of contract, and few days afterward another
judgment obtained by Cleveland In June, 1888, the
directors authorized So 100000 bonds secured by mort
gage to William Barnes small portion Of ,these bonds
used to settle these judgments and others subse-
quenty Obtained including obtained by Edwin G.
Litcnheld III 1850.
portion of bonds under the Barnes mortgage
placed hands OF Russell Sage, with the express
understanding that he would discharge the Litchted
Judgment others. He discharged the Lchfeld judg
ment but failed to discharge the Judgment of record and
took assignment Of ii to himself The complaint as
serts that 1899 the combination strengthened.
with the purpose Of GUSHING tbs stockholders, and the
alleged cons orators agreed tina Chamberlain should
pay any interest tue com anys bonds Sage aud the
other members OF the combination secured large
amount OF the D,nis, aud determined to gain pos
session the Eastern Division OF the road by
foreclosure OF the Barnes mortgage. special act
Of the Legislature secured by watch Barnes became
both seller and purchaser, aud fixed the price.
The foreclosure sale male in January, 1859. and
afterward the combination pretended to form the
Milwaukee and Minnesota Railroad Company, which,
without any chartered ri ,hts, took possession OF the
Eastern division. Subsequently these proceedings
aside by tine United States Supreme Court, and the
title OF the Milwaukee aud Minnesota Company was de-
cared void. Before this, however the nation
deavored 10 secure control OF the Western Division b.
ioreclosng the land grant mortgage Tor s4,00O,0Jo
HOW MIR. CLEVELAND WAS ELECTED.
II determined that Mr.. Cleveland a member OF
the combination, should be elected president OF the La
Crosse Company. Accordingly, he publicly abused Sage.
Chamberlain and others Tor their fraudulent udnsac-
TONS and declared that if the sockEO ders would allow
IA III TO represent them. he would his influence 10
move sage and Chamberlain from the management. He
procured large number Of proxies by alleged false
presentations, and called meeting OF stockholders, 10
be held at the companys office, May %, 1889 between
% IA IN u LtI % ipr,
including many farmers along tIe line OF tic road,
VINO had been dupcd aud swndled by tue combination
were attendance the purpose OF voting, but
election WAS held and no meeting convened al the
time and place named. About 10 p. III. On that day,
however, those stockhuloers who outside of
the ring had gone away, meeting he d ~ u private
house 10y Glove aud and otnes, aud the form of c,
ton gone through by few OF tine stOcknoders
pledged to support CcycLud AMI hc was declared
president of the LI Crosse a. Milwaukee Railroad. 1ne
Board of Directors declared tns eeclion regular,
aud refused 10 recognize Ciey, lands lite 10 oilc".
The combination on December D. 1889, proceeded
forec.Oso Land graut NOR gage. The Lacrosse and
Milwaukee Company made a party to tns suit, but
Subpoena was served on Cleveland a. tue president OF
pauy, and he made no defence 10 he sut, vhcI
prosecuted To- decree aud tr upon the theory
AL Us BOMBS "ad actually Dech NEGOTIATED Tor 10 becht
company, but actually more th4n one-tnri OF them
given 10 Soith Chamberlain Tor his own use aud
benefit No opposition made To tails foreclosure pro-
cccding, and me entire Western vision was purchased
land grant bonds winch the combination ndd pur-
chased at merely nominal sum- namely, about s3JO,0OO
Iuereupuu tine combination fJru-d qi,l corp ration
known q the MlwduHce and st. Pau Railway Company
the Cnicago, Mlwauhee aud -. Paul Railway Com
ptny The complaint next alleges: " The combination,
under the name OF tuis quasi corpo aton, form ant
created By board ~ ram DAD wreckers aforesaid
OF the spUils La Crosse and Milwaukee Railroad al
proceeded 10 take posseSson and control OF the
property and franc ises o the SAID Ia Crosse and
Milwaukee Railroad Company, ana has IN mat date
pre- GUIDED 10 own stld road. Aud has deprived
the tocknoderr oi All tne,r rght..'
splratOrs attempted To obtain decree OF foreclosure
the mJrgI-e To Bronson d sOutner and To annul the
SAFE by the use of thc Judgments against the La
Crosse aud Milwaukee COMPANY, previously mentioned
The Litchiie1 JUDGMENT, wD.ch hd previously ben
pad by sage, was used for THIS purpos, after BENG
transferred, for pretended oOnSId ration of II,
FredcrIca l.. James COwdcy and sage made oath that
James was the owner Of the Judgment,
the complainant cuarges cat tue ownership OF The
Judgment by Sage was faSo ANA fraudulent as on lll j.
1893 sage mad iepo ted by leer ana ern To Barnes
mat mad settled VII" Lilehhcd fhis letter ANA
telegram are Appended TO tne complaint. Tue James
foreclosure sut having been decided adversely The com
sion OF the Eastern DlNso for thIs puiOsc le 'icFe-
land Judgment alleged to belong To james. IN whose
name Il filed. III April, 1866, and sworn to by
Cowdrey. The La Crosse a1d Milwaukee Company was
made party to this SUIT The only .uDpUnd served
appeared in d.iecne decree rendeled III favor Of
james Tue Eastern Ds sion was sold March =. 1867,
under this decree, and was purchased b. tue WrS, IN
DIVISION unuer the 81 tIr Nj waIkcc and ST. Paul
Company which has since owned and controlled It,
Tnc earnings Of tie La trOssc Railroad, II 10 stated,
been tan sufficient 10 pay the WnOle OF the
lawful ndeD,, ducss Of the company, but the cOmbnd-
ton has managed 10 keep The earnings cOnreaed ANA mas
10 ~ " ,,, IN, - ,t v, tc han H. and ,,
legations after They due and assumed power
reissue for ten years the overdue bonds OF the LA
Crosse Company. In addition, tnc Chicago, Milwaukee
and S Pau Company has recently executed 10 the Farm
ers Loan ana Trust Company, ol TINS ciy mortgage
securing DOGus TO the amount Of S3J,OOO,OOO. III
when mort gage IL include the property Oi tuo l..
Company. Ins 931,OOO,OOO ls nOt Issued or rcqair Il
for me benefit OF the la Crosse Company any tcsucct
whatever, but is l,>uc Is irregular aud should
strained W s court so ar as II relates " the La Crosse
Company
Inc complaint prays for an injunction TO restrain the
issuing OF the go 900 bOnds portion them
Tor TIC appoint 81 Il Receiver 10 take charge
property curing the p Idcncy these proceedings, aud
for accounting OF the earnings OF tue Cncago, Mil
Waukee, st. Paul Com auy. and the stock