The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-12-29
TO GUST RECEIVERS.
Charges Filed Against Present Of
ficers of the Northern Pacific.

Charges Filled Against Present Of-
ficers of the Northern Pacific.
MILWAUKEE,. Dec. 2S.-The Northern
Pacific Railroad Company. by Silas w.
Petit OF Philadelphia, its general counsel
filed to-day in the Circuit Court of the
United States, before Judge James G. Jenk-
ins, it's petition for the removal of Thomas
+. Oakes, Henry c.. Payne and Henry c.
Rouse, the present receivers, and the ap-
pointment of other receivers in their place.
The petition sets out that Mr.. Oakes. az
president of the company, appointed r. G.
Rolston, the president of the Farmers
Loan and Trust Company, of New York.
which is trustee of most Of the main and
branch line mortgages OF the Northern
Pacific Railroad Company, chairman OF the
finance committee of the Northern Pacific
directory. The petition then states that
when the Oakes-Rolston board took charge
OF the Northern Pacific it was in good
financial condition and in high credit; that
1t had 2,OO0, ,0C0 in cash in its treasury, and
that it's surplus earnings for the first half
Of the fiscal year commencing June. 1889.
amounted to about $500, 900; that, in addi-
ton to the division mortgages and the first.
second and third general mortgages,
amounting altogether to about S5,OOO,OO0.
which were all the fixed charges Of the
main line at the time. the Northern Pa
cific Railroad Company was then also liza.
BILE as guarantor of the bonds of the TWEEN.
ty-one branch lines, amounting, in the ag-
gregate, to about $26,0O0, ,000 and that for
the purpose, among other things, of taking
up these main and branch line bonds and
of building such other branches as might
be necessary for the development of the
business of the company, the consolidated
mortgage was authorized by the stockhold-
ers to secure $16OOO0.OOO of bonds intended
and believed to be sufficient to pay
off all the existing main and branch
line bonds and provide for all the future
purposes of the road for many years to
come, and so that the said Oakes-Rolston
board started off with paying property.
a large sum in cash on hand and with the
consolidated mortgage bonds to draw upon,
with which TO meet all expenses which
should be properly GhSrgeabe 70 eSbsas
subscribed for and took Sl3,OO0,OOO, and SO
that the said board should, and in fact
did, have ample capital with which to con.
duct and properly develop the business OK
The petition then goes on to say that the
Oakes-Rolston board managed to increase
the interest charges of the Northern Paclnc
company for branch lines from S26,0OOOOO TO
upwards OF $50 900, all in one year, ana
for the acquisition of properties, no one OF
which, except a small line costing less tnan
$1,OO0,OO0 ever has paid the cost OF opera
ton. The petition further charges that IN
several instances, and those the most dis.
astrous to the company, the othcers ana
board of directors were themselves inter-
ested in selling the property to the North
ern Pacific company at an eXorpltant proht
to themselves.
Pacific is then set out in great detail, NAM
ing particularly each of the railroads which
were acquired by the Northern Paclnc COM
pany, and which the bill declares COM
10.
Oakes-Roleton board getting into power.
The petition AYERS that In the construction
of the United railroads of Washington the
members of the board derived a pl',ft OF
81, 10000, while the operation OF that rail-
road cost the Northern Pacific Railroad
Company in the year ending June 80. 1893.
Sl55GW. Other instances are cited to show
that the board made great profits in sad
ding various lines ON the company.
In respect to the Chicago * Northern
Pacific Railroad Company, the petition sets
out at length and in detail the complicated
method by which this was acquired by the
Northern Pacific Railroad Company. Ii is
claimed that for the property of this line
the Northern Pacific paid at least $l0000.0O0
in excess of the cost or value OF the prop
received and divided among many OF the
directors OF the Northern Pacific Railroad
Company The petition then AYERS that
these Chicago properties could not be made
10 earn interest on bonds issued, and that
in the endeavor to improve them the North
ern Pacific company, which controlled the
Chicago d Northern Pacific company,
caused IL to issue upwards of M,000O0 more
or bonds and also purchased the line of the
Calumet Terminal Railroad Company at
an expense of $6,C00.CJ0 OF bonds all OF
which guaranteed by the Northern Pa
cifc Railroad Company, ard are now out
standing as collateral security for its debts.
The petition then repeats the charges.
published not long ago, against Henry Vii
lard, Colgate H0yt, Thomas f. 0akes and
others, who, IL is alleged in order to make
great profits, loaded the company with the
interest OF S5OOW,V0 OF bonds ISSUED or
guaranteed by it for worthless properties.
For these reasons the court is asked To
remove the receivers as incompetent and
wIllfully extravagant men. The bill closes
By declaring that the road cannot be re-
organized unless its control Is put in the
fands OF competent people, and the people
now in control, 1t declares, are not OF that
kind.
A dispatch from st. Paul saws: When
J.. +. Cakes, one of the receivers OF the
Northern Pacific, against whom the suit
instituted at milwaukee, to-day is chiefly
uuScted, was SHOWN the report of the suit
he read IL carefully and pronounced IL ali
an old story, but further than that refused
TO talk at this time.
petition was simply, in substance the
famous Ives report which was refuted at
the time by Mr. oakes." Regarding the
he said President Ives and Vice President
Harris were in better position than Mr.
Oakes. having been the board. Judge
jenkins has allowed twenty days for an
answer and the case will then probably be
forced TO master commissioner. After
charging the whole matter was for the
purpose Of making Mr. Ives one of the re-
ceiVers, he said: This petition for the re-
moval of Mr. Oakes is a rehash Of the re-
port OF the famous Ives committee about a
year ago, to which Mr.. Oakes made a re-
ply In pamphlet. and any one who will
read The latter viii have practically. the
reply 10 the petition filed In Milwaukee to-
day whlcn must De considered good as,