St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-12-29

line of railroad "was without any busi-
ness necessity or reason whatever, eX-
cept only that thereby such members of
the board of directors of the Northern
Pacific Railroad company as were in
terested therein could. as they, in fact,
did, realiZe an
ENORMOUS PROFIT THEREFRoM."
In addition to the aforementioned
the issue of the consolidated mortgage
bonds, and which together about ex
hauSted all of those bonds which could
be issued under the mortgage for such
purpose, the OakeS- ROlSton board Of di-
rectorS of the Northern Pacific Railroad q
company guaranteed the interests by
Endorsement on the bonds. or by lease
of some $50, 000, 900 bonds of railroads as
branches of its system, In no single in
stance of which have been, or are, the
earnings of the property nearly equiya-
lent to the interest so guaranteed.
In respect to the Seattle. Lake Shore
& Eastern Railroad company, the petit
ton declares that the only part of it
Northern Pacific Railroad company
could have been readily duplicated for
little over 50. 00J, 900, and that the rest
OF Its lineS-which are diSjOnted and
widely sepaIated--Were of no value what
ever, and do not now, and never did,
pay the mere cost of operation, yet the
petition AYERS that for these lines the
Northern Pacific guaranteed the inter-
est of S5,675.000 of bonds. and at the
same time purchased $1,000 shares out
of total of 45, 00o shares of Its capital
stock, for which they paid 81, 1920 in
consolidated mortgage bonds. 1t is
al fin h., ~ L.,
600 in this deal.
In respect to the Chicago & Northern
Pacific railroad, the petition sets out at
length and in detail the complicated
method by which this was acquired by
the Northern Pacific company. 1t is
claimed that for the property of this
line the Northern Pacific paid at least
Sl0.00G,000
IN EXCESS OF THE COST
or value OF the properties conveyed. and
that the said profit was received and di-
vlded among many of the directors of
the Northern Pacific Railroad company.
The petition then AYERS that these
Chicago properties could not De made t o
earn interest on the bonds issued, an u
that in the endeavor to improve them
the Northern Pacific company, which
controlled the Chicago S Northern Pa
wards of S7,000,000 more of bonds. and
also purchased the line of the Calumet
Terminal Railroad company at an eX.
penSe of 81, ,00J, 0J0 Of bonds, all Of which
are guaranteed by the Northern Pacific
Railroad company, and are now out
standing as collateral security for its
debts.
1t is also averred that in several of
these transactions the Oregon & Trans
continental company, of which Henry
Willard was president and Colgate Hoyt
vice president, and in which many of
the directors of the Northern Pacific
Railroad company were interested, was
interposed as party to the contract so
that it might make Il profit or commits
sion thereon, amounting in the case of
the Chicago Il Northern Pacific Rail
road company to upwards of $3.50, 900. 1t
is declared that in all these transactions
Thomas +. OakeS, as vice president, and
Roswell u. ROlst0n, as chairman of the
finance committee, took an active part,
in violation of their duty to the
Northern Pacific Railroad company, and
that RolSton, as chairman of the ffrauco
committee, would call Oil himself as
president of the trust company, trustee
IN most of the mortgages mentioned,
and in the consolidated mortgage, to
SCIIlll lIiO UUuuSs WlllCl lilCIi3 do Clidll-
man OF the finance committee, he
PROCEEDED TO DISPOSE OF
for the purchase of these properties,
and that this increased the obligations
of the Northern Pacific Railroad COM
pany so that in one year it was loaded
down with the interest of S60,000,000 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 petition then AYERS that by col
fusion between Oakes, as president, and
Rolston, as the president Of the trust
company, a bill was filed by Rolston'S 5
company, the Farmers Loan and Trust
company, of New York. trustee of the
mortgages Of the Northern Pacific; the
Calumet Terminal Railway company,
and most Of the branch line
companies, for the appointment
of a receiver; that upon the filing Of
the bill Thomas f. Oakes was recom-
mended to the court for appointment as
receiver, for the purpose of continuing
the control and management of the
Oakes-Roiston party, and which bill
was filed without the knowledge OF
many of the directors of the Northern
Pacific Railroad company, who were
kept in ignorance of the fact that any
application for receiver mad been pre-
pared or was necessary.
The bill closes by declaring that the
road cannot be reOrganized unless its
control is put in the hands of compe-
tent people, and the people now in con-
troll, 1t declares. are not of that kind.