The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1893-12-29

ffdence in American Railroads Al
legged to Be Destroyed.
Chicago, Dec. .2S.-The Northern Pa
Petit. of Philadelphia. general counsel,
has prepared and may file tomorrow
at Milwaukee before Judge Jenkins, in
the United States court, a petition for
the removal of the present receivers
of the road Thomas F. Cakes, Henry
c. Payne and Henry G. Rouse. The bill
covers the same general ground as the
Ives committe report of about a. year
ago, and declares that Cakes, as presi-
dent of the company, appointed r. G.
Ralston, president of the Farmers
Loan and Trust company of New
York, chairman of the finance com
nittee of the road. AT this time, it is
asserted, the line was in a good
financial condition and had two mil
lions cash in the treasury. Cakes,
Ralston and the board managed to
increase the interest charges for the
branch lines from $26OO0,0 900 TO $751;
100000 inside of one year. for the
acquisition of properties which. with
one small exception, have never paid
the cost of operation. The petition
further charges that the officers and
directors were themselves interested in
the selling of the properties to the
Northern Pacific company at an ex-
orbitant profit to themselves.
The petition names in detail the rail-
roads thus acquired by the Northern
Pacific and which thus completed it's
ruin within one year of the Cakes
Ralston board getting into power, and
I f1arnk ia
roads of Washington the members of
the board derived a profit of 81, $50 600,
while its operation cost the company in
the year ending June 80, 1888, S155 600.
1t is charged that the syndicate of
which Henry Willard is president, and
which included many members of the
Northern Pacific board of direct
1000 in trust certificates in the Rockfork
& Cooke City road, of which $1,000
600 represented coal lands worth only
$500, 900; the other 81, 600 900 were in the
Rockfork road, which cost about
S800.000 This road the directors
caused the Northern Pacific to buy for
themselves for 81, 100000
| By similar methods the directors are
charged with making a profit Of two
millions out of the Northern Pacific
and Manitoba deal, this line having
! been operated at q loss of $500, 600 an
nually to the company
Also. the directors guaranteed inter-
est on $3S, 900, 900 additional bonds of
! the railroads as branches to it's system.
and in no single instance have the earn
ings been equivalent to the interest SO
guaranteed. Charges of similar nature
are made in connection with the con-
struction and operation of the Seattle.
Lake Shore & Eastern.
| Matters pertaining to the Chicago &
Northern Pacific are treated at great
| length. 1t is claimed that the price
paid for this line and depot in Chicago
was S10000,000 in excess of the cost of
! the property conveyed, and the profit
| from this deal was divided among the
many Northern Pacific directors The
bill contains many minor allegations
| of extravagant and reckless manage
ment by the men whom the court now
IS asked to remove as receivers. The
petition shows that the consequence OF
this reckless waste of the company S
assets and addition to its obligations
was that the credit of the COMPANY
rapidly deprecated so that the floating
debt could not be taken care of, and
that by the collision of Cakes and
Ralston the bill was filed for the ap-
pointment of a receiver and Cakes
! recommended as such, which bill was
filed without the knowledge of many
of the directors of the company. who
were kept in ignorance that any appli-
cation for receiver was then prepared
or necessary The petition shows that
receivers were obtained for fifteen
branch lines, the expenses of operation
being thereby largely increased and
that in all twenty-three different sets
! OF receivers we're appointed by an6
subject TO the Jurisdiction of six differ.
ent courts, adding enormously to the
expense Of operatio besides receiv.
) az q rs
penses. The petition AYERS that the
stockholders, represented by the board
of directors, have cause of action
against the late directors. includins
Cakes and Ralston, for the variou;
transactions set forth and that it i:
necessary for the new board to have
free access to the books and accounts
that inasmuch as actions for restitu
ton must be brought in the names o
the receivers and it is not conpeten
for Cakes TO sue himself, therefore it i:
absolutely necessary that. he be re
lremOVed and another receiver appoint
ed in his place; that it is uecessar,
that representation should be- had
whereby the property can be put upor
a solvent basis, and this cannot be don,
and large sums of money raised. which
will be necessary to bring about. 81
long as the company is managed b,
receivers appointed at the instance o
and in sympathy with the board o
directors whose fraud and Incompetence
have wrecked the company, the be
fore named receivers should therefor
be removed and new receivers appoint
ed in whose management the stock
holders and public have confidence, S,
they can formulate and carry out tn
plan of reorganization whereby tn
company's debts can be paid and it re
stored to solvent basis.
The Petition Filed.
Milwaukee, Dec. 2S.-The petition il
behalf of the stockholders of the North
ern Pacific road for the removal of TIL
present receivers, a summary of whicl
has been given in these dispatches, wa
filed in the federal court here by Gen
- ~