Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1889-04-19
W.P. CANADAY ACCUSED,
SERIOUS CHARGES AGAINST
THE SENATE'S SERGEANT
ALARMS


AND EX.REPREsENTATIVE WEST.
WASHINGTON, April IA
threatened scandal, which will
probably result in the re-organiza-
ton of the present corps of officers
of the United States Senate, has
been brought to light by the filing
on April 8 of a suit in the United
States Circuit Court for the East
ern District of North Carolina at
Raleigh. The complainants are
ex.SenatOrs William Malone and
Warner Miller, Senator John T.
Jones, of Nevada, and e&.Repre'
sentative George West, of New
York. The respondent is the Caro-
lima Oil and CreOsote Company,
of which w. p. Canaday, Sergeant
alarms of the United States, was
recently president. The bill Of
complaint which has been filed
charges fraudulent and corrupt
practices on the part of certain
officers of the company, and prlnci'
pally on the part OF Mr.. Canaday'
The Carolina Oil and CreosOte
Company was organized for the
purpose of manufacturing wood
creosOte oil, and the cOmplainants
subscribed to the capital stock OF
the organization. This capital
stock amounted to $500, 900, divid-
ed into shares at par value OF
800 each, Its headquarters are
at Wilmington, n. q. Senator
Malone, according to tue com
plant, owns S15,4O0 worth OF
stock Warner Miller, GAL, 200
Representative West, $4,000, and
Senator Jones, $4,000. The bust
ness of the company is the creOsOt-
lug of piles so as to prevent their
destruction by worms or insects
With the paid up stock expensive
works were constructed at Will
mington, n. c., and the business
Of the company appeared to be
prosperous, one semiannual divi'
dend of 3 per cent. having been
paid to the stockholders.
CaDaday, the president, in viola
ton of one of the bylaws, resigned
his position, and at an election,
which the complainants allege to
have been the result Of "a con-
spiracy and fraudulent combina.
tion." A. A. Thomas, of Wash
lngton, d. c., was elected presi-
dent. After this election 7Sl
shares of the company's stock were
authorized to be issued, for the
purpose Of arranging a loan OF
$4,000. The meeting at which
the Board of Directors authorized
this issue of stock is charged to
have been at the instance of a
secret and fraudulent understand
Ing between Canaday, Thomas and
others unknown, for the purpose OF
raising money for the private use
of Canaday. 1t is charged that
some OF this stock, which was re-
ported by Canaday to have been
sold by him for $40 per share, was
sold by him in some instances at
$40. $50 and $50 a share, and that
Canaday appropriated the diff
ference between the amounts to his
OVID use, thereby deirauding the
company. A number of irregular
transactions are alleged to have
taken place between Canaday and
two other stockholders named
Hansen and Smith. This consist
ed in the transfer of stock between
the parties, which was prohibited
by one of the bylaws of the Organi-
cation. Canaday is also charged
with having organized another
creOsote company to operate at
Fernandina, Fla, and arranged for
the use OF the patents of the Caro-
lima company, which was an i'm
proper diversion of the rights of
the latter company.
1t appears that not only the
members of the company have suf-
fered IN these transactions, but
that outside persons have been
made victims. According to the
statement of the counsel for the
cOmplainants, Senator Cameron, OF
Pen Dsylvania, invested $4,000 in
the alleged fraudulent stock. If
the result of the suit shows this
stock to have been irregularly
issued, it would seem that the
senior Senator from PennsJ lvania
lg out Just that amount.
The cOmplainants IN their bill
ask the court to eniOin the de.
PENDANTS from managing, admins
tering, or in any manner interfer-
ing with the business affairs of the
company, and from issuing the ISL
shares of stock mentioned therein
that court cause to be held special
meeting of the stockholders, in &C
cordance with the bylaws of the
company, for the purpose of re.
moving Canaday from the office of
president of said company, and
electing a president in his stead
that the defendants be required to
return all records, books, accounts,
etc, affecting the business and
management Of the company which
may be now in their possession ;
that a receiver be appointed to
take possession and custody OF the
property, and for such relief as
may he just and equitable.
To the bill is appended series
of Undergraduates in which it ap.
pears that the cOmplainants ex-
pect to prove that Canaday and
his associates have bypOthecated
the stock of the company that a
part of this stock was deposited
with John G. Calhoun, of New
York, for the purpose of obtaining
a loan for his own personal bene-
fit; that stock has been ISSUED IN
the name of John p. Jones to a
large amount without the knowl-
edge OF Mr.. Jones, but his name
has been indOrsed upon the certlt-
Gates thereof by some other per
son; that as president of the
Fernandina company Canaday dis
posed of some 1000 shares of the
capital stock of that company at
rates much higher than those for
which he accounted to the com
pany.
California Not Soured.