The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1893-12-29

Of it's operation. and In addition 10 one
half of the profits arising out Of the coal
contract, the syndicate will eventually
get q, O00, 600 from the Northern Pacific
company for the purchase Of the trust
certificates representing the coal mine.
and which cost them not to exceed
$500, 600.
Northern PaciAc and Manitoba.
The Northern Pacific and Manitoba
railroad, the petition AYERS, was organ
lied by a syndicate composed of mem
bers of the board of directors of the
Northern Pacific company, which pur-
chased it at a cost of not exceeding $12,-
900 a mile, and that this road they then,
as directors Of the Northern Pacific
Railroad company, caused that COM
pany to buy for bonds at the rate OF
go, 900 a mile; and in addition the
Northern Pacific Railroad company as
sumed the interest on $3.50, 600 OF ter
minal bonds secured upon the terminal
property of the company at Winnipeg,
and which was at least 25 per cent in
excess of the cost or value of that prop
erty. The petition shows that this
property has neve paid the
Mere Cost of Operation.
and that the interest charges which the
Northern Pacific have had to pay,
amounting to upwards of $3OO,OOO a
year, arising out of this transaction,
have been q dead loss to it, and the peti-
TONERS charge that the whole scheme OF
acquiring this line of railrord ''was
without any business necessity or reason
whatever, except only that thereby such
members of the board Of directors OF the
Northern Pacific Railroad company as
were interested therein could, as they IN
fact did, realize an enormous profit
therefrom."
All Run at q Loss.
IL addition to the above mentioned
branch lines which were acquired by the
issue of the consolidated mortgage
bonds, and which together about ex
hausted all of those bonds which could
be issued under the mortgage for such
purpose, the Cakes olston board OF
directors of the Northern Pacific Rail-
road company guaranteed the interest
by Endorsement On the bonds, or by lease
Of some $50, OO0, 900 bonds of railroads as
branches of its system, ''in no single
instance OF which have been, or are, the
earnings of the property nearly equiva-
lent to the interest SO guaranteed"
Seattle, Lake shore and Eastern.
In respect to the Seattle, Lake Shore
and Eastern Railroad company the pc
, tition declares that the only part of il
which had any prospective value to the
Northern Racific Railroad company
could have been readily duplicated for
: little over 81, 900, 900, and that the rest
of its lines-which are disjointed and
widely separated-were of no value
whatever, and do not now, and never
did, pay the mere cost of operation, yet,
! the petition AYERS, that for these line:
, the Northern Pacific guaranteed the in
: terest of 81, 675, 900 of bonds, and at thu
: same time purchased 36 $500 shares on
/ of a total of al, 900 shares OF, its capita
stock, for which they paid 81. 742, 900 il
! consolidated mortgage bonds. It i
claimed the Northern Pacific lost %, 600,
: 600 in this deal.
: Chicago and Northern Pacific.
In respect to the Chicago and North
: ern Pacific railroad, the petition sets on
at length and detail the complicate
method by which this was acquired b
r the Northern Pacific company. 1t
$ claimed that for the property of this lin
Q the Northern Pacific paid at leas
q $40, 200, 900 in excess of the cost Of valu
Of the properties conveyed, and that th
said profit was received and divide
y among many of the directors of th
Northern Pacific Railroad company.
Violated Their Duty.
q 1t is declared that in all these transa
= tions Thomas F. Cakes as vice presiden
. and Roswell G.. Rolston as chairman
y the finance committee, took an activ
part in violation of their duty to Il
Northern Pacific Railroad company, al
that Rolston, as chairman Of the finan'
4 committee, would call ON himself
!, president of the trust company, trust
i'm most of the mortgages mentioned al
Ne in the consolidated mortgage, to certi
"a the bonds, which then, as chairman
N the finance committee, he proceeded
disposeof for the purchase Of these pro
critics, and that this increased the OBJ
n cations of the Northern Pacific Railro
o company so that in n year it W
loaded down with the interest
ne $6O, 0OO, eco of bonds issued or guars
n teed by it for worthless properties.
ne Iseompetent and wHlfully Extrsvsgsr
For these reasons the court Is asked
remove the receivers, as incomplete
~ and willfulfy extravagant mel.
ed The petition then AYERS that by Q
as fusion between Cakes, - president, q
he Rolston as the president of the tr,
he company, . bill was filed by Ralsto
ny company, the Farmers Loan and Tr
ng company Of New York, trustee of
es, mortgages Of the Northern Pacific,
he Chicago Northern Pacific, the Calun
ich Terminal Railway and m