National Republican., 1885-04-23

A few years ago the original stock
holders of the Missouri Pacific railroad
woro cut out hy foreclosure sale under
the third mortgage bonds issued by tho
Missouri Pacific company. Pending the
proceedings of foreclosure before Judge
D illon in the United States circuit court
at 81. Louis tho New York stockholders
formed syndicate representing about
$4,OOO,O0O Of the stock at par value to
resist tho sale. Tho city and county Of
st. Louis were creditors OF tho road, and
formed q combination with these stock
holders to protect their mutual interests.
ono morning the New York syndicate
walked into court and coolly abandoned
their engagement, and violated faith with
81. Louis county and united with tho
third mortgage bondholdsrs in favor Of
foroclosure-having made secret treaty
with Commodore Garrison to bid in the
road for $25O00OO above the second
mortgage.
81. Louis county continued tho fight,
aud sustained its claim as lien upon
tho earnings of the road, Judge Dillon
giving an elaborate opinion in favor of the
county, which decision was sustained by
the Supreme Court of the United States
Tho county's lien being established as
| taking priority to tho mortgages upon
/ the earnings of the road, 1t had no inter-
| est in resisting foreclosure under the
third mortgage. Tho bondhoders and the
stockholders having united in asking for
foreclosure IL was granted. Tho sale took
at st. Louis after due notice. Commo-
dore Garrison WAS present and bid
g., 700 OOo which was 100000 moro than
/ he had agreed to bid i'll his arrangement
with the stockholders. The Pierce party,
representing Boston and Now York cap.
italists, bid $3.OoO.OOO, which would make
the third mortgage bring about 10 per
cent, less the cost of sale, and at that
figure the road was sold. And a few
days afterwards the Pierce party
arranged with Commodore Garrison
to take tho road at the price the former bid
it Off at. The Missouri Pacific road was
then put in first class condition and finely
| equipped, and entered into q most profit.
able period, pending which Jay Gould
purchased the road Of Garrison, the COM
modore making profit Of about SO, ,00O, 00t
in the transaction. Then commenced O
system of law suits in various forms
against the road and against Garri.
son, instituted by tho original stock
holders that formed the syndicate referred
to. After an expenditure of larg,
amount of money on both sides com
promise has been effected, by which Jay
Gould pays $500,000 and Comm odore Gar
rison pays $500. 900, making a total o.
sl,000,O0O to be paid to the origina
stockholders represented by the New
York syndicate.
If tho New Workers. had not violated
faith with st. Louis county they woulc
have controlled tho road to-day, ant
their stock of &, 100000 would pay theu
fair dividend on $10,O00,O00.
There has been great deal said in thu
newspapers about the bad faith of Garri
son toward these stockholders. But tn,
! history Of this case when truthful,
written will show that the original ba,
faith which resulted in this great sacri
fee was occasioned by the failure of tn,
New York stockholders to fulfill thei
solemn obligations with the county cour
Of st. Louis county.
Thus ends bitter contest in whicl
some of the ablest legal minds in tn
country were engaged.