The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-09-09
GEORGIA CENTRALLEASE
.,or9sR SENS ATIoNAL MOVE IN
THE TERMINAL QUARREL

,|onsv Paid for Control of the Com
P-' From. the Neto York Sun.
1.a Arss step toward an investigation Of
o.r.as that have led TO the bank
.,Dtcy Of the Richmond Terminal Com
- was accomplished yesterday, when
80 Brown Of the United States circuit
~r, authorized Receiver Oakman to take
-. Tor a cancellation Of the Georgia Cen
80 la.ss and q recovery Of the moneys
-, Cor the securities of the Georgia COM
pay ~: main points In the petition on which
A. ordsr was granted are as follows:
s.Tbat among the securities OF the Ter
final company are scheduled $4,000 900
e. 1.iue Of the capital stock Of the Geor-
20 Comnany. a corporation of the state Of
Oh Carolina, and also IS, SIS, 600 OF tbs
49, tar.l trust bonds issued by the Georgia
SoL"nsnv- That neither the above bonds
~ srook has come into the actual custody
~ the receiver, but that all such securities
Sre in the custody Of the Central Trust
Eoransny of the city of New York, having
- fGanosited by the Terminal company
asjtb the Central Trust Company as part
v.o,,ritv for its issue of its 5 per cent COL
Sotoral trust bonds, the total issue whereof
amounts TO about $1l 100000.
HThst the So, Al, 900 of Georgia Com
,,nvis collateral trust bonds were, together
Ss~itS $557, 900 of other bonds Of the same
.ariss issued under the terms OF deed of
,Tnst executed by the Georgia Company to
che Central Trust Company. whereby
Al 600 shares of the common stock of the
Central Railroad and Banking Company of
Georgia had been deposited with the Cen
traI Trust Company as security for the
rayment Of the total issue OF "a ,OOO, 600 OF
Georgia Company's collateral trust bonds.
Nv the terms of the trust deed between the
Terminal company and the Central Trust
Company, securing the issue Of per cent.
bonds. a withdrawal price was fixed, upon
the payment of which the Terminal COM
many had the absolute right to withdraw
apy Of the securities so lodged with the
Central Trust Company.
THAT the Terminal company became the
nominal purchaser of the Georgia Com
nanys bonds and stock for she purpose of
/ thereby acquiring substantial control of the
Central Railroad.and Banking Company of
/ feorgia. Through the indirectly acquired
control Of the 900 shares OF the stock of
this corporation, which constituted the sole
asset Of the Georgia Company, other than
Home money in the treasuSy thereof, the
Terminal company nominally acquired the
stocks and bonds from a syndicate, in which
syndlcate three of the members of the then
board Of directors of the Terminal company
were largely interested. That the purchase
By the Terminal company Of the securities
Of the Georgia Company held by such SYM
dcate was effected at net cost to the Ter
rnsl company exceeding 81, Co., 600, which
was price for the 10000 shares of the Cen
tral Railroad and Banking Company stock
far exceeding the then existing market
value thereof.
an March, 1892, In a suit Instituted BY
one Rowena NJ. Clarke against the Central
Railroad and Banking Company of Georgia,
3 the Richmond Terminal Company and the
Richmond and Danville Railroad Company.
In the circuit court of the United States for
Il the southern district Of Georgia, the court
Oh the filing Of the bill appointed receiver
for the entire property and railroad system
4 Of the Central Railroad and Banking Com
pany of Georgia, and the court has, in legal
effect, decided that, under the constitution
OF the state of Georgia, the acquisition of
the controlling interest in the Central Rail-
road and Banking Company of Georgia by
tbs Terminal company was expressly pro-
hibited and void, and the court has en-
joined the Central Railroad and Banking
Company of Georgia from receiving any
vote offered by the Terminal company
upon any of the 10000 shares Of stock Of
the Central Railroad and Banking Company
of Georgia, and such injunction is still In
full free and effect, and the 40 900 shares
OF stock of the Central Railroad and Bank
ing Company of Georgia of the total of
5000 shares is totally DISTINGUISHED by this
judicial decree.
That it has been subsequently, decided
4 BY the court that the Georgia Company,
whose stocks and bonds were nominally
purchased by the Terminal company, had
no corporate capacity to become the pur-
chaser of the 10000 shares of the Central
Railroad and Banking Company of Geor-
giassock.
That under the charter granted by the
stste of Virginia to the Terminal company
1t has authority to purchase or guarantee
the bonds and stocks of company owning
and operating a railroad, but that it is q
matter Of grave doubt whether the Termi-
nal company had any corporate capacity
whatever to purchase either the bonds or
the stock Of the Georgia Company (of NORTH
Csrolina6 because the said corporation did
not own or operate any railroad, aud wai
prohibited by the laws of the state Of NORTH
Carolina, under " hich it was organized, from
building or operating any railroad, ant
held as, practically, outside Of the money
IN its treasury, its sole asset the Il. OO(
shares of stock in the Central Railroad o.
Georgia Company.
Your petitioner is further Informed thai
The Central Railroad and Banking Company
OF Georgia has defaulted in the payment Of
tae seml-annual interest accruing on divers
Of the bonds resting upon its road and upor
sGldry OF Its leased and proprietary lines
and 1t is q matter Of general noboriety tha
It's receivers and bondholders are engaged il
deVlslng scheme for reorRanizing thu
property with view of lessening its ixec
charges.
You petitioner shows to the court tina
inc present and prospective value of tn,
4VVO0 shares Of Central Railroad and Bank
log Company's stock, which constitutes tn,
sle value of the Sl2, 600 of Georgi,
Company's stock and the %, Al, 900 Of Geor
ga Company's bonds, has been SO depre
clated IN the real and market value that i
Tue said transaction is allowed to stand th,
Inevitable result will be an enormous loss t,
tne Terminal company and its stockholder
aud creditors,
That the receiver be requested, on be-
nan OF the stockholders OF the Termina
company owning and representing larg
amounts OF its stock and securities, TO tax
ss.eps to investigate and challenge the valid
ny OF the transactions Of 1888, whereby tn
aetTlnal company acquired the possession
VI Inc Georgia Company's stock and bonds
upon the grounds that the transaction wa
Invalid and beyond the corporate power o.
t he terminal company, and also because o
s sne interests held in the Georgia Company
securities so sold 10y divers Of the director
VI the Terminal company, and the larg,
pout made by such directors and their as