The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-03-13
WREnKIna RAILROADS.

4
the process is not generally understood, or
there might be more people aspiring to be
railroad wreckers. There are enough as it is.
But it is interesting to get an inside view of
| the mode of operating. Such view is given
by the annual report. just published, of John
/ w. Shaw, president of the Hooking Valley g.
| Toledo Railway Company, in which he shows
how certain parties tried to wreck the COM
pany-in fact, did do it, unless their proceed
ings shall be reversed by the courts, for
| which suits are now pending. It is long
and complicated story, but the salient points
can be given. 1t appears that in 1881, before
| the consolidation of the Colurnbus g. Hook
| ing Valley, the Columbus 6 Toledo and
the Ohio g. West Virginia into the Colum
bus, Hooking Valley g. Toledo Railway
| Company, NJ. M. Green was then the presi-
dent of all three companies, and Stevenson
| Burke and others were possessed of about TO-
| 600 acres of coal lands in the Hooking valley,
| which they had bought on speculation, and
| for which they were hopelessly in debt unless
| they could get railroad facilities and thereby
| be enabled to sell out at profit. They had
their coal lands, unpaid for. basis of oper-
| atoms. Their first step was to form
| two coal mining companies, with big names
| on paper, Burke being president of both.
| After the usual amount of preliminary noise
and advertising, all of which did not cost
much, the coal companies organized a scheme
| to get possession of the three railroad COM
| - A. Il
had no money and no assets except coal lands
not paid for, it looked like large undertaking
to attempt to get possession of three railroads,
| completed and equipped. Their first move
was to brighten the stockholders of the Hook
| ing Valley system of railroads by threatening
| to construct rival line. They kept this up
| till the stockholders grew quite pam
| icky. Then they took the presidents of
| the railroads into the scheme. To quote
from President Shaw's report: lit is
manifest from subsequent events that
at this time 1.-THE first part of 1881 Greene,
| the president of the three companies, and
Burke and his associates privately formed
scheme to enable them to raise the money for
the purchase of the stock of the companies
and to pay for their coal lands at an exorbitant
| price by means of bonds of the consolidated
| company, besides obtaining the stock Of that
company, amounting to $4,000, 000." Their
| plan was to borrow money and buy
/ up the stock of the railroad companies,
/ and they actually succeeded in making a loan
| of Sc, 0O0 900 from Drexel. Morgan s. Co., of
- Al.
| that the money was to be used solely for the
/ purchase of the stock of the three railroad
companies; that the stock so purchased was to
be transferred to Greene, trustee, Endorsed
| by him in blank, to be held BIZ Drexel, Nor
| gan & Co. as part security for their loan. It
was further agreed that as soon as possible
| the three companies should be consolidated
| into one, and the old stock was to be exchanged
| and merged into the stock of the new COM
pany, the entire amount of which. SIC, 200, 900,
was to be held by Drexel Morgan & Co. as
| security for their loan. Following this, ac-
cording to the agreement, the new company
was to issue $14, 500, 900 in bonds secured by
mortgage on the coal lands, of which Sc, $780,
900 were to be used in paying off the out
| standing bonds of the old companies and the
Drexel, Morgan & Co. as further security for
| their loan These were the main points of
/ the agreement under which the money was
| borrowed to buy the roads. All this time
/ Greene was president of the three roads and
was ostensibly acting in the interest of the
I i IL. "
| appreciated his services is shown by letter
| to him, published in the report, stating
/ that 1--WE have set aside participation in our
bond syndicate of $500 for you, and trust
that the action will please you by its nature
and its results" The loan was consummated,
the stock of the old companies was bought up,
Greene was made president of the new con-
solidated company, at a salary of $15, 900
year, and Burke vice-president, at SIS, 900.
| But Burke and his associates had not yet
which was their chief aim. AS two of the
land syndicate beside Burke were directors of
the new company. this was not very difficult
to accomplish. The report shows in detail
| how it was done, the syndicate realizing over
| 81. 200, 900 in cash for the lands. The net
| result Of the whole transaction was to wipe
out the old companies, whica were solvent
and doing profitable business, and to divide
81, $50. 900 between the wreckers of which
President Greene got 500, 900, in addition to
his bonus of $3.50. 900 from Drexel, Morgan
s Co., and his salary Of $4,000 year for
five years. If the criminal laws of this
country do not reach such transactions it is
high time they were changed. Greene is
dead, and civil suits are pending against the
surviving wreckers to recover the plundered