The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-03-25
DEMAND A RECEIVER.
Minority Stockholders Of Lake
Shore Road Heard From.
THEY SAY IT MAKES MONEY.
Rosition 70 Knjoin the Performances Of
ne Trsfic Contrast with the n. z.
Some Serious Charges.

A pstition for the appointment Of . receiver
for the Seattle, Lake Shore b Eastern railroad.
for an accounting from the Northern Pacific
and for an Injunction to prevent the further
operation of the Lake Shore road under the ex-
fsting tra.1ic contract with the Northern Pacific.
was fIed in the United States court yesterday.
The suit IL an endeavor by the minority
stockholders in the Lake Shore road 20 assert
their right TO . voice in its management aad to
. share in it. earnings The plaintiffs are
Thomas Earle, of Victoria, and Angus Mack
insosh. OF this city, and the complaint
was flied on their behalf by etrafson,
Lewis q Gilman. The defendants are the
Northern Pacific Railroad Company. the Seattle,
Lake Shore Eastern Railway company, and
James b. Williams, George r. Earle, Jacob Furth.
]. A. Nadeau and George W. Dickinson, 40 trus-
tees OF the latter company. Mr. Earle, who 10
. member Of the Dominion parliament OF Canada,
was one OF the principal contractors for the
construction OF the road In question and
received 10000 Of stock In part payment for
his work. He was the head OF the firms OF
Thomas Earle Il Co ana Earle & Mcleod, and
his partner, J. w. Mcleod, swears to one OF the
af{davits fled In support OF tho suit. The other
petitioner. Angus Macintosh. was one OF the
original projectors of the Lake Shore road
and one of the frat subscribers TO
its stock. The complaint IL drawn 30 that other
minority stockholders may intervene, and, a.
Thomas Burke and d. II. Gilman are large
holders. it IL probable that they will take
hand In the suit, OF the also shares of the
par value OF 500 each the Northern Pacific
holds 81 $685., and the minority, who are nearly
all Seattle men, hold 9, 52Slz
The complaint opens by stating that 10 made
on behalf OF the plaintiffs and in the interest OF
nil other persons who may have the right to
intervene. II then describes the powers given
A. - at R.vf ts oh Tn
build a railroad from Lake superior TO Puget
sound and Portland, to own, operate and equip
1t, and continues: "said power being the only
power given by Law aud by its charter and for
no other purpose whatever" 1t then recites the
organisation and powers OF the Lake Shore road
with capital stock divided into i,I50 shares OF
500 par value each, and the construction OF the
road.
It then states that on May I, 1890, and alter
wards the Lake shore road was doing large and
profitable business and was entitled TO MAKE
large earnings sufiicient to pay fixed charges,
operating expenses and interest on bonds and
leave surplus Of 10000 as dividends every
year, provided IL had been operated as a separate
and distinct road, 40 IL was entitled 70 be by
virtue OF its organixation; that il was earning
surplus available for dividends and would have
continued 10 do so but for the acts OF the North
ern Pacific road and its directors, and that on
May !, 1890. its stock was worth A. per cent OF
its face value. 1t In next stated that on May ].
1890. Thomas Earle owned and now owns 1000
shares and Angus Macintosh owns 4A shares
of Lake shore stock, which was worth that
amount, but that by reason of the wrongful acts
OF tho Northern Pacific and the trustees OF the
Lake shore road it has become greatly depreci.
ated ana now has no market value whatever.
The next allegation IL that, "withou. author
ity OF Law and contrary to its act OF incorpora-
tion," the Northern Pacific. under a pretended
chase and obtained possession OF 81 ,626lf shares
OF stock and has since voted and controlled
them, and used them for its own interest and
not for that OF the Lake Shore road: that this
stock Vas placed IN escrow until fully paid for,
and that meanwhile the road was operated by
the Northern Pacific until May -. 1891, when a
pretended meeting OF the board OF trustees was
held In New York. At this meeting. IL 10 alleged,
Joseph Coz, secretary Of I. NJ Logan. and John
II. Bryant were present merely a. representatives
OF T. II. Logan, and were merely nominal stoc <.
holders end In furthsrance OF the agreement
with the majority Of the stockholders, in order
to put tho road moro completely under
the control OF the Northern Pacific,
George W. Dickinson. assistant general
superintendent Of the Northern Pacific, was ap-
pointed superintendent OF the Lake Shore. and
the bylaws were changed 20 az to give him ex.
elusive control OF the traffic and physical opera
tion. with the power 70 appoint and discharge
operating officials. At the same time, IL says, q
pretended trafiic contract was entered into be-
tween the Northern Pacific and the trustees of
the Lake shore, BY which, where traffic inter.
changed between the two roads was carried
more than double the distance over the North.
ern Pacific that II was carried over the Lake
Shore. the gross receipts should be divided on
the basis OF the total actual mileage over both
lines with the mileage OF transportation over
the Lake Shore added: that the Lake shore
should transact all its traffic. except local,
% FAR as possible, with the Northern Pacific
and make no contract for connection or inter.
change OF traffic with any ether line; nor suffer
any mortgage, lieu or other encumbrance with.
out the consent of the Northern Pacific BY the
came contract tho Lake Shore agreed 10 make
connection with the Northern Pacific at iss own
cost ut points approved by the chief engineer o!
the Northern Pacific, and 10 extend its lines Ia
connect with Northern Pacific branches, and 10
construct branches at the command of the
Northern Pacific This contract was to remain
Ia force for forty years. II Is also alleged that
the Lake shore trustees adopted a resolution re-
ducing the number oil trustees from thirteen "a
i've. and tha, A. s Dunham, T NJ. Logan, John
H. Bryant. II. X. Taleott and John Craig wero
then elected trustees. and tina, they and their
SUCCESSORS, the present trustees who were
elected by tho Northern Pacific Railroad
Company unlawfuly voting a majority of the
stock, have bad exclusive control gad manage.
ment OF tae road. The iva trustees are than
stated IL he merely employees OF the Northern
Pacific, James B. Williams being vice prs,t.
dest. George ii. Earl, secretary. Jacob Furth
being cashier q. the Puget Sound National
bank. tie Northern Pacific depository: !. A
Sadsau It's general agent in this CITY. and G.
". DiektGson assistant general superintendent
noae al them being owners Of any stock exesn,
small amounts, mach o. which was transferred
IN them 10 enable taem 10 act as trustees. IL
Is next stated that the location OF the Isk /.
shore lines makes them the only means for ,he
transportation OF the products travsrsed IN
Es>tern markets and to connection with trans.
continental lines. aud that for this reason TIA
road Was entitled to aud dia receive large
rates. by which ii WAS en.h!ed a
MAKO istrs profits, and 90 secure 9
large proportion OF the total rates &c ire Ess,
uuti tie read was illegally taken under the
eontrol OF tAs Northern Pacific Tn =, ,na,
tire, IL Is claimed. the road obtained. Ard nv
reason OF ss location. Is siii entitled 10 obtain
ar arbitrary rate. ~ Is thu custom and right Of
roads similarly situated. But under the traffic
contract the Lake shore receives only double
mileage where tie haul over ;he Northern Pa
cinc lie more than double that over the Lake
sAere, and thus only receives from one-twenti.
eth to one-aalt Of hat roads similarly situated
are accustomed te charge. Yet there was no ~.
duetioa IN the total rate, bat the excess owe,
what wss received by tho Lake shore wss paid
- the Northern Psesae under tie contract, sad
thus. ths complaint proceeds. ;as greater Dor.
tioa Of tas earnings Justly belonging q
ths Lake Shore were collected aud re
esivst ~ the Northern Pacific. in fraud O.
;he rights 81 the plaintiffs and ths Q: her stock.
holders. lt is alleged thai the contract VS..
entered into without the consent az the minor
tiy. bit Was authorized aad directed ey ihs
Nefthoru Pacific directors, and ~ ire LAKE