Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1885-06-25
IN IMPORTANT CASE.
A Suit Against Prominent Railroad
Men-The wheels of Monopoly.

New York, June 20.--The suit Of Ralph
w. Bagaley against William X. Vanderbilt
and others to wind up the affairs OF the
South Pennsylvania railroad syndicate and
for distribution of its property came up
for n hearing to-day before Chief Justice
Sedgwick IN the superior court on n motion
for an Injunction and IL receiver.
In 1888 number of gentlemen, including
William H. Vanderbilt, William X. Wander
bit, William g. Whitney, stephen ID. Elkins,
d. o. Mills, Andrew Cnrnagie, John ID.
Rockefeller ana Abram s. Hewett entered
into II written contract whereby they SUD.
scribed Sl5,O00,0 600 for the purpose OF
acuuiring the property of the South Penn
sylvanin Railroud Company, which had out
standing 1860 shares of stock amounting
to 5lAS 900 for the purpose OF construct
ing that railroad from the east bank
of the Susquehanna river to tho west
bank Of the loughiOghcny river. Five OF
the subscribers, William X. Vanderbilt, IL.
Mex, Twombly, Franklin b. Gowen, David
Hostetter, and Henry +. DimOck, wern ap-
pointed a committee, who made four calls
for five per cent each on the amount of the
subscription, being u total Of S3,OO0, ,OOO, OF
which Mr. Bagaley, whose subscription was
81 600 600, paid 1920, 900. last Deaember,
all the members of tho syndicate
except Mr., Bagaley consented 70 = mouih-
cation of their agreements 80 that the sub
scribers were not TO receive their share OF
the 800, ,OUO, 900 and 72O, ,0OO, 600 of bonds
which the railroad company was To ISSUE
until so per cont instead Of ~ per cent OF
their subscription had been paid. The com
mittee made u nth call upon the esubscribers
for 2 per cent of their subscriptions
and nil made payment except MIR. Bagaley
and S27S, 900 more WIS realized. This
committee was to use S5O0,OOO OF these
moneys to secure the then outstanding
property of the South Pennsylvania Rail
rond Company and they then entered into u
contract with the American Construction
Company, New Jersey corporation, 70
construct the road upon II basis OF $40 900 900
of stock and $40, ,O0O0 900 of bonds, The
| committee was to receive Sl,OOO each OF
bonds and stock for every $1,000 OF money
| advanced to the construction company. -,
Mr.. Bagaley claims that the contract with
i the construction company is in eontraVeh-
tion of a promise of the Pennsylvania state
| constitution that "No corporation siill
| issue stocks or bonds except Tor
money. labor done or money or
nroncrty actually received, and all ilc-
| iitinus increase of stock or indebted
ness shall be void" because all OF the
$40 ono 900 received of tho construction
company in excess OF $i5,0O0,OUO, is II llc-
ticious increase Of stock and Indebtedness,
and is unauthorized and VOID;
Counsel for Bayaley in his argument
stated that the American Construction Com,
many with n nominal capital OF Sl0,0Oo and
With $4,000 paid in made onC contract to dd build
iite amount of bonds, total oi
10 a4e, 600 oSa 600, tho entire authorized cap,
ltal q the railroad company company ma%a adt
y contract with a syndicate Of gentle
n men, SU@ Comprising Mr.. Vanderbilt and others
by which they turned over the ,e oen entirt drt
amount subscribed substantially S1O, ,OO1 'OOI
bonds and stocks for $4,000, 900 cash, Sc
that the road was constructed at an expens!
Of $l5OOO,OOO for which S4o, o,GOO, 90,
of securities were issued, TINS a.
alleged in Mr.. Bagaley's bill beint
in violation of the laws of Penn
sylvania, which prohibit stocks and bond
Of corporations being issued for more thal
the amount of money or property actuail'
received.
Counsel on behalf OF the motion presente'
, these facts to the court and asked that a.
Injunction be grante1 restraining. tn
syndicate from further proceedings in tn
. matter.