The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1892-05-06

resented to any bondholder that he had se--
cured purchaser for the bonds of the re-
organized railway to an amount sufficient to
pay off the floating debt of the old railway
and to complete the road. or for any of the
bonds, except as afterwards affirmatively
stated He denies that he made any agree
ment with bondholders to appear at the sale
| and buy the railroad, but states that he ex-
/ plicitly refused to enter into any such agree
ment, or to constitute himself trustee, if
he did buy at any sale. He alleges that the
order for sale was procured by the Farmers
Loan and Trust Company, the trustee for
the bondhoiders, and not by him, and he de-
nies that he ever gave out Or threatened that
he would disregard the terms of an agree
ment between himself and the bondhod.
ers, or threatened or intended to do
any act whatever in fraud of any bondhold-
ers, nor arranged with Zephin Job to make
any assignment or mortgage in fraud of the
rights of the complainants or any other
bondholders. He states that he did not pre-
pare the plan of reorganization, or even see
it, and draft Of it was sent him by the re-
organization committee that he disapproved,
and still disapproves certain features of that
plan, and so informed the compliments,
Smyth ard Keim, and only came into the
plan at their urgent request, and as conces-
sion to secure harmony. He has endeavored
earnestly to assist the reorganization com.
mittee to obtain the funds to enable the re-
organized company to complete its road
that he told the complainants that he be-
lieved he had interested certain foreigners
to the extent that they would enter into
negotiations for this purpose, which prom
ised to be successful, but made no personal
assurance of what these foreign gentlemen
would do; that tie foreigners in ques-.
ton assured the affiant of their willingness
to take up the securities of the reorganized
company if the committee would assure
them of peaceful and harmonious action on
the part of the bondholders. The committee
wished to meet the representatives OF the
foreign capitalists. The affiant, Col. Hegg.
in response to that request, arranged such
meeting. 1t was held, and a result, the
subcommittee reported to the full commit
tee the facts of the interview. and they be-
lieved that the parties in question were able
and ready to carry into effect their represen-
tations as to taking up the new bonds OF the
reorganized company, when such securities
were ready to be issued, and when the con-
ditions as to harmony of action, and the
support of the company by the old bond
holders were seen to be fulfilled. A few
days after that the foreign representative
sailed for Europe without having made any
arrangement between him and the reorgan-
ization committee for providing the 81 600,
600 purchase money. The day of sale of the
property, originally fixed for December 8,
1891, was on the application of the Farmers
Loan and Trust Company, extended by the
circuit court of Benton county until January
20, 1882. As the day of sale drew near. he,
Col. Hogg, urged on some members of the
reorganization committee the necessity of
providing this money he saw the complain
ants, Smyth and Keim on or before January
IA, 1892 and distinctly told them he was
not going to Oregon to attend the sale, but
gave them his address in New York between
the 18th and 2Oth of January, but received
no communication from them. The day of
sale now being close. at hand, and as he
found that the committee had done nothing
to provide the purchase money of 81 100000
which all parties knew would be required,
he, at the last moment, requested Zephin
Job to appear at the sale and protect all ill.,
terests by purchasing the property and un-
dertaking to pay the $1,000, 900, and to ell
able him to do so, provided the $25. .00O de-
posit required ont of his (Col. Hogg's) own
funds. Zephin Job was the only bidder at
the sale, and bid 81 ,O00,0 600 for the prop
erty, which was knocked down to him. He
told several members of the reorganization
committee that if the committee would pro-
vide the purchase money he would UNDER
take that Mr.. Job would transfer to the new
company all his right, title and interest to
the properties, and that the new company
would fulfill all the obligations Of the reor-
ganization agreement, and he is still willing
| and believes Mr.. Job to be also willing to do
this. Early in February, 1892, the foreign
| capitalists representative, and another gen.
tleman associated with him, returned to
| New York, and he at once entered into ne
gotiations with him to provide the 81 ,000,-
00D. These gentlemen ultimately agreed to
do this if sulne proper security were given
for their money, although they complained
that the acts of some of the bondholders,
including some members of the reorganiza-
ton committee, had not tended toward the
promised harmony of action.
These gentlemen proposed that, pending
the formation of the new company, and the
issue of its securities, MIR. Job should assign
his title to some trust company of approved,
standing, and that the money should be paid
over to the trust company on their executing
certificates in favor of the parties paying the
money, that the properties stood pledge for
the money until the new company should
be formed, and should issue its permanent
securities. They suggested further, that, in
order to put the railroad into a paying con-
dition as soon as possible. the amount to be
provided by their people on these trust GER
tlticates should be increased to $4,000, 600,
which would enable the instant prosecution
of construction over the Cascades, and buy
two more ocean steamships, besides paying
the 1000, 600 purchase money, and various
other most desirable payments.