The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1891-12-20
TROUBLES OF
A SYNDICATE.
English Capital Invested in Stock
Yards Property. .
Stockholders Object to Conditions Of a SS,0OO,.
900 Contract With Prominent Chicago
PaCkerS-lnjunCtlOn Served


NEW YORK, Dec. 19-The old Union
Stock-yards Company of Chicago was
bought out early in 1890 by English pro-
moters known as the City of London Cor
poration, that company purchasing 1S0, 900
shares OF stock. aggregating $4,000 900, par
value, paying for them something in excess
of par The company then reorganized un-
der the laws of New Jersey, having
capital stock and outstanding mortgage
bonds aggregating S23, ,000,OO0 Since then
1t has been in much trouble. The public
subscribed very sparngly, it is said, and
the underwriters were loaded with securi-
ties Armour, Swift and Morris, known as
the big Three" were heavy holders in the
old company. and sold out to the English
syndicate at $50 per share. No soone was
the new company an accomplished fact than
the big Three" being no longer interested
In the dividends awoke to the fact that they
were paying excessive rates for trackage,
yardage, feed, etc. In consequence they
bought 1000 acres of land at Tolieston. Ind,
and announced that they proposed to re-
move to that point. Furthermore, they pur-
chased three acres contiguous to their
packlng-houses in Chicago, and shortly
after fled suits there to compel the Stock
yards Company to permit to be delivered
over its tracks direct live stock consigned to
them without handling by the Stock yards
Company, this with view of averting pay
Ing yardagc, etc.
The New jersey company, with So, ,OOO, 900
liabilities fDund itsplf in IA nf
losing the big Three'S" business or divid-
ing with them a part of its income. The
latter course was pursued, and the company
made con ract with the Big Three" by
which. in effect, the latter decided the stock
yards company their thres acres at the
yards. said to be worth $4,000. 1000 acres at
IolleSton. said to have cost 100000, dis
missed the suits, aud continued business at
the old yards. For all this the New Jersey
company agreed to pay $4,000, 000, partly IN
cash and partly in bonds.
No sooner was this agreement made than
Ellerman OF London, StockhOder in the
company, hled bill against the New Jer-
sey Company and the Big Three" for the
purpose of having the contract declared
sey yesterday decided in favor of the legality
OF the contract. To-day fourteen new suits
were Instituted, some in tho United States
court and others IN a New Jersey court.
The new plaintiffs include all the packers at
the yards except the " Big Three" and their
business is said TO aggregate S100, COO OOO
annually. An application for an Injunction
to prevent the carrying out of the s., 00O, 600
contract was made to Chancellor McGiIl of
New jersey this morning, and at noon to-
day he entered an enj0ining order restrain
Ing the parties 10 the contract from con sum-
mating it. The injunction was served upon
the New Jersey company al once.
Inc new suits make startling allegations;
allege that the Ellerman suit was cOllusiye
and filed by one in close business relations
with the London contract corporation that
1t was brought really to have the contract
sustained; that it was ingeniously devised
to suppress the truth; that the S3. 900
contract is mere illegal device to create
prohibited Determinations contrary to the
express statutes of Illinois, New Jersey
and the United States. The New jersey
company is vigorously attacked as being a
trust and combination and an unlawful
corporate entity organized to deal in the
stock OF another company, a practice
frowned upon in recent trust decisions of
tlA Yari0Us cnurt9