The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1886-04-30

THE ST. CLOUD R. R. INQUIRY.
REPORT OF COMMITTEE, SPEECH OF GEN. BAKER
ETC.
| To the board of Trade of the City of Mankato:
Your committee, to whom is referred certain
resolutions of this board touching the transfer
| Of the stock and franchises of the st. Cloud
Mankato & Austin railroad company, and who
were instructed to make inquiry and report as
to all the facts and circumstances connected
with the procuring Of said stock from the orig
inal stock holders, the representations tina,
were made to said stockholders. ard, so far az
may be, what became of said stock, and if sold
to whom sold, and the consideration received
therefor, would respectfully report as follows
That they have examined quite a number of
witnesses, some of whose afiidavits accompany
this report; that th0y have also taken into
consideration the majority ana minority re-
port OF the committee appointed by the legis-
lature of tho year 1885 to investigate certain
phase OF this transfer. Also. statements and
admissions made by several OF said directors in
recent published interviews. Also, a letter
addressed to this committee by Director VIM
NJ. Campbell, which, although dated March rs
/ 1885, was not received by said committee until
April 10th. And from all our sources of infor
nation we find
That VIM. NJ. Campbell, James III. Baker, c.
A. Gilman, VIM. II. Officer, and Harlan W.
Page, five of the directors Of the said ST. Cloud
Austin g. Mankato railroad were directly con.
cerned in obtaining the stock of said railroad
company from said original stock holders; and
IN all of the subsequent transactions leading up
to- and eliminating In the final sale of said
stock and transfer of the franchises of said
railroad company; that there were about sew
en- hundred shares of stock originally issued to
stockholders, upon which $40 per share was
paid; that this so per share was paid for the
purpose of preliminary survey of the route
OF said contemplated railroad, and was consid
| cred as payment In full shares; that said d
| rectors subscribed individually for no greater
number of shares than the other stockholders
| and at the time of said subscriptions never
| claimed that they had any greater pecuniary
interest in said road than the other stock hold
| ers, no stakeholder having over five shares.
That there was no understanding that the
| aforesaid directors were to be paid for their
services as said directors, but they were Sc
prominent individuals in their several local..
ties, and holding as State senators and other
officers of trust under the State railroad pass
es. they could undertake Journeys for meet
ings OF the directors with little expense in the
matter That Director Baker frequently as.
sured the stockholders at Mankato that he had
no greater pecuniary interest in said road than
any of the stockholders; that afterwards said
directors represented to the original stock
holders that they had contracted with the "Con-
struction Company of North America" for the
building of the entire line Of said railroad, and
that one of the conditions of said contract was
that all Of the stock of said St Cloud, Austin s.
Mankato railroad should be turned over to the
said Construction Company of North America
for the sum Of SO per share, with the proviso
that If the contract was not carried out the
stock was to be returned to the stock holders.
Whether this proviso that the stock was to
| be returned in case the construction company
did not build according to agreement was ex-
planned fully by all of the above named direc-
tors to the confidipg stockholders of their re-
spective localities, your committee is not able
| to state fully; but the evidence is conclusive
| that Director Baker made such representations
/ to the several stock holders at Mankato and vi
| cinity, coupled with the further assurance that
| no had no further pecuniary interest in said
| transfer more than any ordinary stakeholder
but your COMMITTEE have no doubt that, as the
aforesaid directors seemed to have acted as
unit in all their transactions, that they OBJ
| tanned said transfers in their respective locali
ties under similar representations which rep.
| reservations, in the judgment of this commit.
tee, were not made in good faith 1t is clear
| that as far as the stockholders at Mankato and
| its vicinity are concerned. they would not have
madesaid transfers had they not been deceived
in regard to said representations. That upon
the representations so made and the further
representation that the road could not be built
unless said stock was SO transferred. all the
original stock holders delivered their stock to
said directors in trust and for the specific pur-
pose of securing the completion Of said road
but that the said directors, in violation of said
trust, have treated said assignment of stock as
their own property; that when said Construc-
ton Company OF North America found itself
unable to carry out this contract, it returned
said stock tn said directors. That said direc-
tors, without informing said original stock.
holders that said construction company had
failed to carry out their contract, and had re.
turned said stock and, without Offering to re.
deliver said stock to said stockholders, did
fraudulently and without any authority from
said stockholders, sell and convey TO another
corporation. to-wit, "The Railway Improve
ment Company" j. w. Bishop. president, all of
said stock so returned by said Construction
Company of North America for large pecu-
MARY consideration-the exact amount your
committee cannot state-but in the neighbur-
hood of $4,000 That said directors have been
charged repeatedly in the public press that
such was the sum received by them and, as far
as your committee knows no one of the afore-
said directors over his own signature has de-
MED 1t. None of this large sum has ever been
returned to the original stockholders, but all
of said directors have been very reticent in re.
gard TO this whole matter. The written con
tract entered into between said directors and
said Railway Improvement Company as to the
terms of said transfer, would throw some ligh
on the matter of good faith in relation to this
transfer; but the aforesaid directors have new
er given the stockholders the benefit of a pc
rusal of its contents, and no report has ever
been made by said directors of their steward
ship to said stock holders, but the whole sub
ject of this transfer has been enveloped in
cloud of mystery. We further find that Di
rectors Campbell, Baker Gilman, Officer ant
| Page received from the Railway Improvement
Company, or from some leading railway mer
interested in existing roads, and whose railroad
interests are more or less hostile to the com
pletion of the whole line of the st. Cloud, Man
kato & Austin railroad. for said transfer o
stock, which belonged to the original stock
holders of the 100 shares, and large pecuniar,
| consideration, probably about $4,000. which
they have retained as directors, although Il
this transfer was in good faith, IL Belongs
solely to tho original stockholders.
We also find that Directors Baker and Officer
| in interviews with prominent citizens of Man
kato. have repeatedly denied that they received
any consideration for said transfer except fol
the money they had actually put in said enter
prise. But their testimony is contradIcted by
that of Directors Campbell and Officer who, ir
their statement presented to the committee OF
| the legislature to investigate this matter as ap
pears ON page e9s of the journal of the House
| for the year 1885 admit that on said transfer
they did receive a partial compensation fol
their services. The testimony Of Directors Ba
ker and Officer is further contradlcted by the
statement Of Director Gilman, who, In an in
terview as reported in the st Cloud Times OF
April 7th, 1886, admits as far as the directors
! were concerned, that on said transfer 1--WE re-
ceived enough to poorly compensate us for our
time and labor" We must therefore charita-
bly, conclude that Directors Baker and Officer
in their interviews had forgotten that their
share of the amount received on said transfer
also included compensation for services as d.
rectors. The evidence before this committee
also shows that Director Baker in interviews
with citizens of Mankato has repeatedly stated
that he expected no compensation unless the
road should be actually built. Directors Camp