The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-07-14
THEN.P.6AYS CHECK"
Startling Move in the Lake
6hore Game Of Chess
the wgTHRGsTwuLL NOT @ PAio.
u~o1os ossvoA - xssssvss Dssvn 1hss
- .. r. Dssassss - Psy-A
Move ess Hssesssssso.

psu and startling sssp in the coutrossrsy
q rawsrd 70 the Lake Shore road yesser-
6sv. Il viii 10 rsmsnabersd that one of
eondfffoss u the eonssnes under which
shs majority stoekhojders Of the LAks
Shore sold their stock 70 the Northern Ps-
eif;c vss thss the lestes should guarantee
che iutsrsss on the bonds and the persods-
eaI psymsnss into the sinking fund The
next haifysaSiy payment on this account
- due on August snd amounts 70 $is0.z0
interest on SOS 90 per cent bonds and
SH.Oyo fov the sinking fund. On this sub
1>cs A. y. Bnrisigh. The attorney Tor the
Northern Pacific. yesterday nisd ID the
UsIssd States circuit court the following
PETITION In the Yecsivssship case:
Yoss psssuosss, sns northern Pacific Railroad
Company. dessudans IN tie shove entitled sutf.
ysppsesfuiiy sepresesss thas owing 70 tbs optnten
q the cont . n sas eenltfy Of The eontyses re-
ysssoae between the Northern faet6c Railroad
Company and shs eessslA, LAks shore 4 Eastern
Railway CompAny. II viii NOT b able 70 psostds
Sos she fusnIimsrt Ut the ssquirsnsafs q Toe
mortgage securing ths boudsd tBdebssdness a
he seattle. LAks eb0es q Eastern Rail sy Com
psny in rssssies 70 ~ sinking fund. ana also
esnsos provide fos The payment Of the Interest
ecesugns upon he sa:d bonds Oh ~ about
Aususs I. is9s. snd POUR petitioner woula fur
shss represent thst ts viii b necessasy ios The
sooetvss 70 provids tos tbs came.
Notics to the same effect Vas given TO
Receiver Brown yesterday afternoon In
The following letter from, Mr.. Buricigh:
Owing 70 ihs opanioa OF the United states
circuit court Of the f0stiefa division Of me
dlstsiss u washtnston holding thst tbs con-
tract rsssfieas bsswscn she Nosthsru Pacific
Railroad Com psny and the seattle, Lake Shore
4 Eastern Railway Company are illegal, ron
ase hsfsby notiasd that the Northern Pacific
Haitsosd Company decsinss 70 provide for the
ssauifsmeuts Of shs sinking fund - provided
b. the mortgage securing the bonds OF tns -.
sssle. Lake shore Eastern Railway Company.
and that 10 siso dssiisss 70 pay the Interest 20
eruing upon soid bonds o. or about 4 ueuss ].
Jsg1 II will b nscessasy for ron therefore 10
psov ids ios thsss obligations On your own 80
count
Mr.. f3sowu said ID regard 10 this move:
We aufieipatsd this nova Il 10 out Of the
question sos The road 10 pay intsrest and pro-
vide for the sinking fund u present Some Of
shs b0udholdsss mar desire 70 sell the propsssy,
bat In that event the road wouldn't return -
much - II Il was nufssd undsg the Jurisdiction
81 the sscsivsrsbip
This in effect 10 notice that the North
ern Pacific no ionges considers itself bound
By the guarantee OF the interest and sink
Ing fund payments. since the traffic con-
tract, which was the result Of the sale OF
the stock and was practically part Of tho
same deal, has been declared illegal. The
burden OF providing for tho payment 10
thus thrown on the receiver or the minority
stockholders. A. the receiver has only
had charge Of the road since July and
thus has no funds In his possession except
The receipts since that date, he will not b
able 10 provide the money. The only
other source from which u can b obtained
Il the minority stockholders themselves.
and the time for them 20 raise nearly
eD0, 900 10 very short. particularly in the
present condition Of the money market
II therefore seems 20 b the purpose Of
the Northern Pacific 10 force the road TO
foreclosure sale. There are apparently
two courses lcft open for IL 20 regain pos
session Of the road. One 10 20 buy ont the
minority. who are said to b willing to
cell Tor IS . share. the price paid for the
majority. With interest from the time the
majority cold. which would make the
price ahoat t5A The other II 80 let the
interest payments 60 by default. let the
bondholdcrs forcclose tho mortgage and
cell the road. In that case tho Northern
Pacific could buy IL in At better advantage
tran any other road could afford, for what
ever amount Il bid over tho amount
Of the bonds would simply go back
into the treasury Of the Lake Shore, and
she Northern Pacific. A. the owner of
thrse-fonrths Of the stock. would be en-
titled 10 that proportion Of IL. The 4ana-
dian Pacific or the Great Northern might
bid against the Northern Pacific. bat as
the latter would get back this proportion
Of the surplus over the amount necessary
Go redeem the bonds, Ii could afford to
oushid them and by thus wipIng out the
old stock get rid Of the minority without
buying Is cut aud then rcorganixe the
company.
1. might be claimed. however. that the
Northern Pacihc's refusal 20 meet tho in
teresi payments il Of no effect il the bonds
have PASSED into the hands of innocent
third parties. The bonds would then
simply bear the Enforcement of the North
ern Pacific and the terms on which the
guarantee ~as given would not affect iis
validity. II Is probable, however. that
she bonds wouia remain in tho hands of
the original holders. who received them
from the Lake Shore road as stockholders
In the Seattle & Eastern Construction
Company. which butt the road and took
bonds Ia payment In that case they
could not appear a. innocent third parties
and thus could not enforce the guarantee.
II they still bold the bonds. IL is probable
that shey are cooperating with the North.
srn Pacific 10 defeat the minority's move
ments.
TnE RAMA noxx usaHr ar - a ~