The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1890-10-24
GA Cloud of Huge Proportions.
Almost a Cyclone, Rests on
the Reputation" of
these Men
Is the Opinion of the Committee
of Investigation from the
MankatO Board OfTrade.
How Innocent Directors were
Induced to Resign that ''the
Line Might be Drawn"
What J. A. Willard, a former
Director, had to say Regard
ing the Transaction.
TO THE BOARD OF TRADE OF
THE CITY OF MANKATO:

III IHE BOARD VI TRADE Of
THE CITY OF MANKATO:
Your committee to whom is refer
red certain resolutions of this Board
touching the transfer of the stock and
franchises of the ST. Cloud and Austin
Railroad Company and who were in
structed ''tO make inquiry and report
as to all the facts and circumstances
connected with the procuring of said
stock from the original stockholders,
the representations that were made
to said stockholders, and, so far as may
be, what became of said StOck,-and if
sold, to whom sold, and the consider
alton received therefor" would re-
spectfully report as follows:
That they have examined quite a
number of witnesses, -SOme of whose
affidavitS accompany this report; that
they have also taken into cOnsidera-
tion the majority and minority report
of the committee appointed by the
| Legislature of the year 1885 to inyeSti-
gate a certain phase of this tranfer:
also statements and admissions made
by several of said directors in recent
! published interviews: also a letter adj
dressed to this committee by director
! VIM. nj. Campbell, which although
dated March 25th, 1886, was not re-
ceived by said committee until April
10th, and from all our sources of in
! formation we find
That VIM. M. Campbell, James HI.
Baker, Chas. A. Gilman, VIM. III. Of
ficer, and Harlan w. Page,-ffve of the
Directors of the said st. Cloud, Aus
tin and Mankato railroad were direct
ly concerned in obtaining the stock of
said Railroad Company from said orig
inal stockholders; and, in all of the
subsequent transactions leading up to
and eliminating in the final sale of
said stock, and transfer of the fran
chises of said Railroad Company, that
there were about seven hundred shares
of stock originally issued to stockhold-
ers upon which ten dollars per share
was paid; that this ten dollars per
share was paid for the purpose of a
preliminary survey of the route of said
contemplated railroad, and was con-
Sidered as payment in full for said
shares.
That said directors subscribed in
dividually for no greater number of
shares than the other stockholders
and, at the time of said subscriptions,
hCNOl UICJ dllJ
pecuniary interest in said road than
1.-THE other stockholders. No stock
holder having over five shares.
That there was no understanding
that the aforesaid directors were to be
paid for their services as said direct
ors,-but they were selected as direct
ors, solely because they were prOmi-
nent individuals in their several lOcali-
ties, and holding as State Senators and
other offices of trust under the State,
railroad passes; they could undertake
journeys for meetings of the directors
with little expense in the matter.
That director Baker frequently assur-
ed the stockholders at MankatO, that
he had no greater pecuniary interest
in said road than any of the Stockhold-
ers. That, afterwards, said directors
represented to the original Stockhold-
erS that they had contracted with the
CONSTRUCTION Company of North
America" for the building of the en-
tire line ofrailroad, and that one of the
conditions of said contract was, that
all of the stock of said ST. Cloud, Aus
tin and Mankato railroad should be
turned over to the said Construction
Company of North America, for the
sum of ten dollars per share, with the
prOviSO that if the contract was not
carried out, the stock was to be re-
turned to the stockholders.
Whether this proviso that the stock
was to be returned in case the Con-
struction Company did not build &C
cOrding to agreement was explained
fully by all of the above named direct
ors to the confiding stockholders of
their respective localities, your COM
mittee is not able to state fully; but
the evidence is conclusive that direct
or Baker made such representations
to the several stockholders at Mankato
and vicinity, coupled with the further
assurance, that be had no further pc
cuniary 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 trans
actions, that they obtained said trans
ferS in their respective localities I'M
der similar representations: which re-
presentations in the Judgment of this
COMMITTEE were not made in good
faith. 1t is clear that as far as the
stockholders at MankatO and vicinity
is concerned, they would not have
made said transfers had they not been
deceived in regard to said representa-
tions. That upon said representa-
tions so made and the further repre-
sentation that the road could not be
built unless said stock was so trans
ferred, all the original stockholders
delivered their stock to said Directors
in trust and for the specific purpose of
securing the completion of said road,
but that the said Directors in viola
ton of said trust have treated said
assignment of stoc as their own prop
erty, that when said Construction
Company of North America found it.
self unable to carry out this contract,
it returned said stock to said Direct
ors. That said Directors without. in
forming said original stockholders that