Baxter Springs news. [volume] (Baxter Springs, Kan.) 1882-1919, 1893-12-30
Serious Charges Against Officials of
the Northern Pacii: Road.
HUGE BOODLING CLAIMED.
Worthless Properties Saddled on the Com
panv by Interested Parties Willard.
KOlstOn and Oalkes Jmpli-
Gated la Most of the
Shady TRANSACT
tiOns.

w. Petit OF Philadelphia, its general
council filed in the circuit court of the
United States before Judge James q.
Jenkins, a sensational petition for the
removal of Thomas F. Cakes, Henry c.
Payne and Henry c. Rouse. the present
receivers, and the appointment of other
receivers in their place.
The petition sets out that Mr.. Cakes,
as president of the company. appointed
r. q. Rolston. president of the f rm-
ers' Loan l. Trust Co.. of New York,
which is trustee of most of the main
and branch line mortgages of the North
ern Pacific Railroad Co., chairman of
finance committee of the Northern Pa
citic directory: that when the Cakes
Rolston board took charge the road
was in good financial condition and in
high credit: tn It it had $1,000, 900 in
cash in its treasury. and that its surplus
earnings for the first half of the fiscal
year commencing June, 1889, amounted
to $1,000. 900: that in addition to the d.
vision mortgages. amounting to about
SIS. 900. 900 which wer. fixed charges on
the main line at that time, the North
ern Pacific Railroad Co. was then
also liza Tile as guarantor OF the bonds OF
twenty-one branch lines, amounting in
the aggregate to about $40. 600, 900. and
that for the purpose. among other
things. of taking up these main and
branch line bonds and bu lding such
other branches rs might be necessary
for the development of the business OF
the company, the consolidated mort.
gage was authorized by the stock
holders to secure 1863 900, 900 Of bonds
intended AMI believed to be sufficient
to paw off all the existing main and
branch line bonds. and provide for all
the future purposes of the road for
many years tn coms.
The petition declares that the Oakes-
Rolston board st irted off with II paying
property, large sum Of cash on
h.rI -.ln.. with the consolidated mort
gage bonds to draw upon. with which
to meet all expenses which should be
properly chargelble t. capital ac-
count and of which the stockholders
subscribed for and took SlS. 900. 900 and
SO that the said hoard said and in
fact did have ample capital with whjc
to conduct and properly develop the
business of the com ornI. The ia ies-
Rolston combine managed to increase
the interest charges of the company
for branch lines from $40, 00O.000 to
upwards of $50. O00 600. all in one
year, and for he acquisition of prop
erty no one of which Except small
line costing less thrt $1,000. 0o0) ever
paid the cost o. op ration and fixed
charges and many OF which do not
even pay the cost of operation "
The petit on further charges that in
several instances-and th)s. the most
disastrous t. the company the officers
and board OF directors were themselves
interes.el in selling the properties to
the Northern Pacific ut an eXorbitant
profit to themselves.
The story of the collapse OF the
Northern Pacific is then set out in
great detail, naming particularly each
of the railroads which were acquired
by the Northern Pacific Co. and which
the bill declares completed its ruin
within one year after the Cakes Rolston
board got into power.
1t is also averrel tn 1t in several of
these transactions the Oreyon Il Trans
continental Co., of which Henry
Willard was president and Colgate Hoyt
vice president, and in which many of
the directors of the Northern Pacific
were interested. was interposed as a
party to the contract SO it might make
a profit or commission thereon, amount
ing, in the case of the Chicago Il North
ern Pacific. to upward of $3.50, 900.
1t is declared that in all these trans
actions Thomas +. Cakes, as vice presi-
dent. and L. q. Rolston, as chairman
OF the finance committee. took an act
i've part in violation of their duty to
the Northern Pacific company, and
that Rolston would call on himself as
president OF the trust company.
trustee in most of the mortgages
mentioned and in the consolidated
mortgage. to certify the bonds. which
then. as chairman of the finance COM
mitt .e. he proc ,eded tn dispose of for
the purchase of these properties and
That this increased the obligations o.
the Northern Pacific Railroad Co,
so that in one year it was loaded down
with the interest of S60, 900, 900 of bonds
issued or guaranteed by it for worthless