The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-03-26

that the directors were labortng for the tns
terest OF the stockholders. as il was done
for no other purpose than TO prevent de-
fault upon the Csntraps obligations. The
Central Trust Company was an impartial
stakeholder, he said, holding the securities
until the question Of indebtedness could be
settled.
Judge Speer inquired how this would be
determined. He said il is were true that
the Richmond and Danville controlled the
Central it would be plain that the sottls-
ment OF the question of the debt would be
in It's hands.
Judge Pardee said the Danville,
lease. the provision for arbitration
in the section of the lease applied only to
the Georgia Pacific and not 90 the Dam
vile.
RIGHT OF THE CENTRAL TO LEASE.
Mr.. Cunningham then took up what he
said was the main point OF the litigation.
whether or not the Central had power to
make the lease. The coming in of the Rich
mond and Danville and saying that it threw
the lease back on the Central did not avail
them or affect the lease. He read from the
charter OF the Central Railroad aud Bank
ing Company provisions as to acquiring and
disposing of property. Judge Pardee re-
quested him TO expatiate on this, aud Rc-
oordingly Mr.. Cunningham read almost
the Macon and Western and the charter
granted it, which road was afterward alb
sorbed by the Central, showing that the
fullest power of leasing and purchasing
connecting lines had been granted both
roads. Mr.. Cunningham was interrupted
for a recess of twenty minutes, after which
he resumed his argument, continuing until
2:S0 O'Clock. Mr.. Cunningham took up
each charge in the bill of the complainants
separately, showing it's weakness or irrelev-
ancy TO the case. He spent some time on
the point that there was nothing in the pubic
policy OF the state or provisions of the consti-
tuition to prevent a connecting line from
leasing its connection with the
two thereby formed a continuous line.
There is no doubt that Mr.. Cunningham
demonstrated this point completely. This
he held to be the position OF the Central aud
Georgia Pacific.
THE GEORGIA PACIFIC.
He discussed the creation aud charter of
the Georgia Pacific, showing it to be q
Georgia corporation and not an Alabama
corporation, as claimed by Capt. jackson in
his argument. He showed that under the
act of the egislature by which the Georgia
Pacific was constituted, the lease
was legal and valid and ratification by its
stockholders was unnecessary. He discussed
the public policy of the state at length,
and held that any railroad in Georgia
could lease any connecting line
where the two lines would form one con-
tinuous line. He held that the contract be-
tween the Georgia Pacific and Richmond
aud Danville might be illegal, but this did
not show that there was any illegality In
the contract between the Georgia Pacific
and the Central. He argued that the Geor-
gia Pacific and Richmond and Danville
were solvent corporations Mr., Cunning
ham said the East Tennessee was not con-
trolled by the Terminal, that company own
ing less than 81 per cent. of its capital stock,
and its claim 10 control it being only pre-
tended for the purpose of appearing
the East Tennessee was a competitor
of both the Central railroad and the DAN
vile, he said, was amply brought out by
the fact that 1t was taking freight at COM
petitive points from both roads by giving
lower rates, and if that was not oompeti-
ton, Mr.. Cunningham said he did not know
what the word meant.
THE RECEIVERsHIP QUESTION.
Mr.. Cunningham then addressed himself
to the question If the lease Is ultra wires and
illegal, should receiver be appointed
Even if the $4,000 shares Of stock held by
the Central Trust Company we're illegally
held it did not affect the legality of the
election of the board of directors,
he said, as they were elected
by $4,000 shares of stock outside of this
block. How can the Central railroad help
the illegal holding of this $4,000 sharass
said Mr.. Cunningham, They have the right
il they own AZ, 900 shares of stock to control
the road absolutely so long as they keep
within the four corners OF the charter
granted by the state. What matters it
whether the Central railroad stockholders
live in Kamsohatka, or New York, or Geor-
gla, as far as the legality OF their holding is
concernedl
Judge Speer interrupted him here. asking
SIS it not a fact that the majority of the
officials of the Central owe their position
TO the holders of those $4,000 shares; can
they not turn out every one OF them at the
next election, If it IS true, as charged in Maj.
Bacon's Intervention, that it is the purpose
of the Terminal company to run down aud
depreciate the value of the road, are not the
minority stockholders interestedW
ENJoIN THE VOTING OF THE BLOCK.
"If that be true" said Mr. Cunningham,
"enjoin the voting power of the stock, if it
be in the power Of the court to do So"
Mr. Cunningham defended the character
and standing and the action of the Central
directors.
Judge Pardee said: "Your contention is
that if the lease Is broken the road should
be returned TO the direct ,rs. Now, are not
the directors contending that the lease is
legal, and has not the Danvllle company
rendered up the leaseP
"Why your honor. they have vacated
our house." said Mr.. Cunningham. 1.-THE
house is empty and it is for US to go IN and
OCCUPY it. We can take hold of the road
and run it for the benefit Of the Dauville,
aud at the end of six months can compel
them to pay it's fixed charges or proceed
against the bond"
Mr.. Cunningham discussed the question OF
a receiver, "a matter in the discretion of the
court" he said, "and one that should be
exercised sparingly and with great caution"
"Do you think from what you know Of
the case" said Judge Speer, "there is any
likelihood of another dividend being paid!"
81 have no doubt Of it, sir" said Mr..
Cunningham.
"Have they not defaulted upon the wages
TO their employees to large amount" said
Judge Pardee.
Mr.. Cunningham contended that they had
not defaulted. He explained the manner of
paying the rolls. He said the Danville had
paid 100000 upon the coupons of the Sa-
vannah and Western bonds two days before
the appointment of the receiver.
THE sPEYER LOAN.
The Speyer contract, ne said, was judi
cious attempt to fund the debt of the Cen
tral. 1t was necessary in the condition of
the company's finances at that time that
this debt should be arranged for a year.
They hypothecated 81, 900. 900 Of the COM
panyis securities for this loan. IL was re-
garded as an exceedingly valuable contract
by those who made t. 1t was made by