The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1893-09-14
ARE SUED FOR MILLIONS.
Northern Pacific Stockholders
Sue Henry Willard Eft Al.
II is A VERY GRAVE CASE.
Fraud Of the Worst Kind Plainly and
FOrcibIy Alleged.
1t Is Claimed That Through Conspiracy
Entered Into by Willard and Others,
They Lined Their Pockets with
the Coin OF the Realm.

New YORK, Sept. 13.-John Swope of
Pennsylvania, one OF the stockholders OF
the Northern Pacific Railroad company,
on behalf of himself and other stock
holders, has begun an action in the SUI
preme court against Henry Willard,
Charles L. Colby, Colgate Hoyt, Edwin
H. Abbott, the Northern Pacific railroad,
Thomas F. Cakes, Henry c. Rouse and
Henry @. Payne, its receivers, and the
Chicago & Northern Pacific Railroad COM
pany, to compel the individual defend
ants to make restitution OF millions
which, it is alleged, the Northern Pacific
company was deprived of by means OF
fraud. The complaint alleges that Viii
lard, Colby, Hoyt and Abbott, in Sep
TENDER, 1889, owned land at
Harrison street and Fifth avenue,
Chicago, upon which was then being
constructed a grand central passenger
station and also controlled the Chicago
d Great Western company, Bridgeport
and South Chicago railroad company and
the Chicago, Harlem & Batavia railroad
company, which operated lines Of rail-
road within the limits of the city of
Chicago. The value of the land men
toned and the railroad properties is
said to have been So, 600, 600 in March
1890.
Swope charges that these four men in
September, 1889, conspired to defraud the
Northern Pacific company by selling to
it, through themselves as directors, all
this Chicago railroad property and land
for price in excess OF its value, so they
could make an eXorbitant profit to them
selves personally, in frapd of the Nor
thern Pacific company. By this scheme
they received about SIS, 800 900.
For the purpose Of Disgusting the con-
spiracy, the Chicago & Northern Pacific
Railroad company was organized by Vii
lard, Colby, Hoyt and Abbott in Novem-
Der, 1889, with capital stock of S399, 600,
secured by a mortgage on the property of
the Chicago & Great Western company.
1t is alleged that S19, 95O, 200 in bonds
were delivered to the four men in ques-
ton in payment for the different proper
ties mentioned, and shares of the capital
stock in the three railroads in
Chicago were assigned to the
Farmers Loan and Trust company
as trustee. Willard and associates
then made to themselves as owners and in
control of the Wisconsin Central company
a lease for ninety nine years of ell prop
erty of the Chicago & Northern Pacific
mortgage and other outstanding mort
cages.
Then the Wisconsin Central comnany
was leased to the Northern Pacific COM
pany on a mortgage for ninety mine
years.
Willard was then chairman of the
Northern Pacific company and two of
his associates were directors. This was
arranged so that in addition to profit of
$40, $4,000 already realized by them in
bonds, they would be entitled to about
one-third of the profits to be
derived from the operation of the
Chicago & Northern Pacific, soon
as it became self-su pporting. The pur-
pose of the suit is to have them restore to
the Northern Pacific or the Chicago &
Northern Pacific $40, $50, goo of bonds and
81, $50 shares of stock obtained for the
Chicago properties.
An accounting is sought at fair
market value OF the property at Harrison
street and Fifth avenue, Chicago; also
of three Chicago railroads, and after de-
Quoting 81 ,049 600 encumbrances upon
that railroad, that Willard, Colby, Hoyt
and Abbot be adjudged to deliver to the
Chicago & Northern Pacific company
all the bonds OF the company
received by them in excess of fair mar
ket value of the property on its face value;
also an accounting of the sum of money
contributed by the Northern Pacific,
Chicago 81 Northern and Northern Pa
cific, and the payment of the interest on
the $50, $50 mortgage, and to pay over
90, 250 shares of the capital stock of the
Chicago & Northern Pacific derived by
them for it's par value.