The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-06-09
A COOL HALF MILLION.
MAI. EARTRIDGE SUES KEssLER
& co. FOR 100000 DAMAGES.

Georgia Crash and Mel. Hartrjdgs'.
Failure-Ths Charges Against Kssslei
g. Co.-The Cause OF Mel cartridges
Suspension Explained-The Amount
Owed the savannah Banks-rhe
Cass tc be Tried in the New York
Supreme Court.
Maj. A. L. Hartridge. through bis attor-
neys. strong, Harmon & Matthewsson, has
begun suit in the supreme court of New
York for $500, 900 damages against William
Kessler, Edward Kessler, GustaYe Kessler
and Joseph W. Ogden, comprising the
firm of Kessler & Co.
The sudden crash in January in Marietta
and North Georgia railroad bonds aud
stocks involved Maj Hartridge. and drafts
drawn in his favor by the Savannah banks
upon New York to the amount of over
$3.50. 900 went to protest.
The papers fled with the court IN New
York, give full history OF the affair, and
how the financial ruin of the Marietta and
North Georgia railroad and its stockhold
ers was accomplished A copy of the papers
is in the hands of Charlton & Mackall, Mai.
Hartridge's attorneys in Savannah.
In 1887 the Marietta and North Geor-
gia company with a view to Dor
/
debtedHess on the road to GO on with its
construction, authorized an issue Of bonds,
and to secure them executed q mortgage to
| the Central Trust Company OF New York
as trustee, and issued "a, 2l0.o 900 Of bonds.
INVESTED HEAVILY IN THE BONDS.
Maj. Hartridge at various times pur-
chased himself over $500, 600 of their bonds
and negotiated a number OF sales
for his customers. He also bought
10000 shares of the stock of the consoli-
dated company, and in other ways became
identified with the enterprise, investing a
large portion of his capital in It,
bis affairs became DO intimately connected
with those of the road that his success or
failure depended upon its proper financial
management. Kessler & Co. were ap-
pointed financial agents Of the Marietta
and North Georgia In April, 1889, and Maj.
Hartridge believed that they were CO.
operating with him in making the railway
a successful enterprise. All the interest
coupons on the company's bonds maturing
prior to Jan. l. 1891, were paid, but
by reason Of the expense incurred in COM
pletlng the road and putting it in operation
the company did not have The necessary
| funds to meet its coupons maturing at the
time
THE CHARGES AGAINST KKssLER & co.
The declaration says that Dec. 81, 1890,
in Savannah, the defendants for the osten-
sible purpose of projecting the bonds and
securing controlling interest in the stock
Of the road, but with the real pur-
pose Of defrauding the plaintiff, represented
that If he would agree to transfer upon de-
meDd to them aud to the frm OF j. c.
Hambro q Son Of London, whom Kessler
q Co. claimed to represent, 5000 shares of
the stock of the company, and would agres
to transfer to designated committee Of five
10000 additional shares Of stock, with the
absolute voting power thereon, for a term
of three years, or until the road should
be sold or otherwise disposed of
Kesslsr & Co. and Hambro g. Son
would take s300,0O0 of tie bonds of
the road, paying at the rate OF 80
cents on the dollar and would arrange to
pay the Interest coupons falling due Jan. /.
Maj. Hartridge assented to this and ar
rangements were made to carry out the
agreement for the transfer.
STILL OWNS THE STOCK AND BOND.
The declaration goes on to state that Dec.
81, 1890, Maj Hartridge owned, and he still
shares Of the stock of the railroad, the
bonds being quoted at from
90 to 90, and the stock having a market
value of at least IA cents on the dollar.
These bonds were In large part With banks
and individuals Of Savannah and elsewhere
as collateral for loans. Relying upon the
representations and agreements Of Kessler
q Co. Maj. Harbridge arranged for the
payment of sufficiency Of the loans to re-
lease 1891, 900 Of the bonds. and on jan.
last he forwarded the bonds. with bills Of lad
ing attached with five sterling bills against
Hambro & Son, payable at ten days sight
in London to Latham, Alexander & Co. of
New York, his correspondent there, with
the following sight drafts: One for $780,
1 a., %
cashier of the Central Railroad Bank; one
for SS9, 626 So in favor of James Sullivan,
cashier of the Southern Bank; one for $685.
900 in favor of George G. Freeman, cashier
OF the Citizens Bauk; one for $l0,757 in
favor of Thomas Gadsden, cashier
of the Merchants National Bank
and one for s35, $50 60 in favor of H. Myers
president Of the National Bank of Savan
nah. These drafts were discounted by the
Savannah banks, and the money was ap
piled to the loans, and the bonds thus Sc
cured were forwarded to Latham, Alexan
der g. Co.
HAD NO AUTHORITY.
Maj. Hartridge was subsequently, mott.
fed by Latham, Alexander & Co. thai
upon inquiry made by them preparatory tc
the sale of the sterling bills drawn against
/ formed by the latter that Kesslel
& Co. had no authority to represent then
in any purchase of these bonds and they de
, clined to accept or pay for them. Kesslei
& Co. also Notified Latham, Alexander 8
Co., that they had never made any such
agreement as had been set forth, and de
, clared that they had no authority to repre-
sent Hambro & Son. The drafts conse
, quently went to protest and were returned
! with tine bonds TO the banks in Savannah
which still hold them, Maj. Hartridge nevel
having ben able to redeem them
Kessler & Co., 1t is claimed, refused Il
carry out their agreement to provide fund
for the payment of the January coupons
and in consequence the company defaulteC
on its coupons causing its bonds and stool
to greatly depreciate in value.
THE CHARGE OF FRAUD.
, The declaration asserts that Ksssler 8
Co. entered into these agreements and rep
l reservations with the intention to deceiv,
and defraud the plaintiff by embarrassing
him 30 that he would be prevented from
, making arrangements elswhere for tn,
funds necessary to pay the January cou-
pons, and with the intention Of wreckinP
the road SO that they would be able to ge
possession of the property at greatly re
duced price, and that at the very time they
were negotiating with Mrj. Hartridge they
had retained counsel and were making ar
engagements for the foreclosure of the mort
l. u -