The times. [volume] (Richmond, Va.) 1890-1903, 1892-06-17


That besides its own line il has gained pos
session aud control Of twenty-six other rail-
roads built under separate charters OF and
owned by the following respective corpora
tons Piedmont. Milton and Sutherlln, state
University, Richmond, York River and Chesa-
poake. North Carolina. Atlanta and Charlotte
Air Line Washington, Ohio and western.
{ Northwestern North Carolina, Clarksvilie
and North Carolina. Oxford and Clatksyile,
| Virginia Midland Western North Carolina,
Charlotte. Columbia and Augusta. and leased
lines. Georgia Pacific. Statesyllle and
Western. oxford and Henderson, Richmond
and MecklenDurg. Northwestern OF Georgia,
High Point Asheville and Sparta1burg. FL
bertOn Air Line Lawrenceyille. Roswell.
Hartwel and the Yadkin railroad companies.
and also owned the entire capital stock OF the
Chesapeake and Richmond Steamboat Com
pany.
AS ONE SYSTEM.
That for over five years 1t has controlled
! and operated these lines az a single system
! with one set of books and officers. and over q
| large part of their mileage the rolling stock is
used Unfortunately without any liked APP
| portonment or separation Of the earnings,
except by entries ia the books OF account
purporting to apportion the gross income and
expenses by some approximate but arbitrary
basis OF divisions as between the different
! lines
The total mileage of the auxiliary portion of
| said Danyille system. added 70 It's own mile
| age of 162 miles makes a total length of $500
miles Of railroad, exclusive of its steamer ser
vice. It's capitalizatOns are as follows:
The aggregate outstanding capital stock OF
/ these twenty corporations Is placed at
| f43 4S2 $50. OF which SIC, ,707 .354 - neither
| owned nor controlled by either Of the defend
ants hereto
! That some Of said roads are operated by
the Richmond and Danyille Company rs pro-
! prietary lines and others upon the basis of
fixed rental OF payment of net earnings.
That the bonded debts of such and the
rental obligations amount 10 81. 12S 126 It's
own direct bonded debt is GIG, l36, ,000 mak-
ing q total of s87, 9l4. I26.
That the bOndeddebt resting on its own
road Is ia five separate issues of securities
That the bonded debt resting on its auxiliary
and operated lines Is embraced IN ffty-nine
different classes of securities issued by the
company securedby separate mortgages COW
ing different sections of roads and their
equipment IN various ways.
FLOATING DEBT.
That the Danyille Company has also ont
standing car trust obligations amounting TO
one million five hundred and forty-two thou
sand eight hundred and twenty-four dollars
and floating debt Of five million dollars. q
considerable part Of which was accommOda-
ton paper given at request Of said Terminal
Company 20 enable II to realize funds TO pay
its debt created by the purchase OF non-re-
Inuneratye properties, and also an emergency
loan OF SIX hundred thousand dollars 10 pre-
vent default on April. l. 1892.
That its board has pledged its credit and
subjected II 10 other heavy liabilities 10 en-
able the Terminal Company TO acquire tho
stock and control of other companies II which
1t has no interest whatever.
That by reason Of tho stock contract of the
Terminal over the Danville Company il com
PEELED the latter, about June !, 1891 to be-
come assignee and guarantOr Of leases exc
cuted bV the Central Railroad and Banking
Company of Georgia, Of all its system of
roads and steamship lines for long term of
years and obligated the Danville to operate
the Central svstetn AID assure all interest and
rental obligations and also an annual dividend
OF seven per cent.
That the operation of Central Georgia sys-
TEN has been a constant and heavy loss
That the Terminal Company has uniformly
conducted its affairs as a mere security com
pany, acquiring stock and bonds of different
railway companies and borrowing money upon
its bonds secured by the pledge of such
shares and securities. That the outstanding
capital stock stock of said Terminal Com
pany Is x75,000000. and its own distinct
bonded debt S2l, ,235,000.
THE TENNESSEE sYsrYN,
That it owns a minority interest of s21, ,199.-
200 ia the Tennessee system and also
sl2.00O,0O0. being the whole capital stock of
the dbOIEh company
That about June l. 1891 the leased lines
of the Georgia system were leased to the
Georgia Pacific Company. and the Danville
Company by assignment of the latter ope-
rated the Central system at a heavy loss
until April /. 1892. when il was decided that
its possession was unlawful and that the
S4,33l 600 Of stock IN the general company
was disqualified from voting for directors Of
that company, and possession Of the whole
system was taken out Of the hands of the
Danville Company by the appointment of
receivers. and an injunction granted enioin-
ing voting on any OF such majority stock.
and since such decree the Danville Company
has not had any possession or control over
such system.
THREE SYSTEMS
That the Terminal Company nominally |
owns bonds and stock in three different sys- |
TENS amounting in the aggregate as follows:
Stocks S83. .746, ,24G: bonds. Sl2 3S8 0OO That |
when the Dauville Company in March. 1892. |
was IN such extreme financial difficulty its |
friends were compelled to furnish an emer- !
gency advance of 100000. 1t pledged the in |
come of its entire system to repay the same |
June lst and has failed to do so.
Some of the complaInants also contributed |
TO the emergency loan of March. 1892, and |
are creditors of the Danville Company on |
that account and entitled 10 the security of /
the aforesaid pledge OF income.
The aggregate amount az par of the stock |
holding interests OF cOmplalnants exceeds one |
million dollars and the said bonds and debts |
will exceed one-half million dollars, and the |
cOmplainants are. in addition. representatives |
of other interests amounting to two million |
dollars.
While nominally distinct corporations the |
actual transactions between the Terminal |
Company, conducting no active business IA a
security company. with no assests except !
stocks and bonds. and the DaDville Company |
as corporation operating large system OF |
railways separately organized and mortgaged |
have resulted IN serious complications, and |
the said corporations have for several years
had a common president and substantially the
same directors.
THE DIFFERENCE
The Danvill9 Company owns and represents
the tangible property-the roads themselves
while the Terminal Company represents
only the underlying equity subject TO debts.
Tho Terminal "a the owner Of and votes
upon nearly the entire capital stock of the
Danville Company.
4 majority of such stock, however; has
been pledged as security for dividends on
preferred stock Of the Terminal Company.
and some of the Danville stock is in the ac
tual possession Of tho Terminal Company but
is pledged 10 secure the bonds OF the latter
and is therefore subject to be sold
AZ forced sale if it should default Ia the pay
ment Of interest on its obligations
The Danville Company does not own or
operate the Past Tennessee system but il has