The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1893-12-29
TOOUST RECEIVERS
Northern Pacific Company, Through
Its General Counsel, Asks That
Cakes, Payne and Rouse
The Present Receivers, Be Fired Fol-
Wilfnl Extravaganza and In
competence.
Instances in Which the Cakes Syndi.
cate Mulcted the Road For Mill
ions of Dollars.

: CHICAGO, Dec. 29.- The Northern
Pacific Railroad company, by Silas w.
Petit of Philadelphia, its general coun-
sci, has filed in the circuit court of the
United States at Milwaukee, before
Judge James G. Jenkins, it's petition for
the removal of Thomas F. Cakes, II. 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. G.. Rolston, the president Of the
Farmers Loan and Trust company of
New York, which is trustee of most of
the main and branch line mortgages of
the Northern Pacific Railroad company,
chairman of the finance committee
of the Northern Pacific directory.
Was in Good Condition.
The petition then states that when the
Cakes Rolston board took charge of the
Northern Pacific it was in good financial
condition and in high credit; that it had
90, 600, 900 in cash in its treasury, and
that its surplus earnings for the first
half of the fiscal year commencing June,
1889, amounted to about 81, 100000; that
in addition to the division mortgages
(amounting together to about $75,000,-
U00), which were all the fixed charges of
the main line at that time, the Northern
Pacific Railroad company was then also
liable as g~uarantor of the bonds Of 81
branch lines, amounting in the
aggregate to about SEQ, 000, 900,
and that for the purpose,
among other things, of taking up these
main and branch line bonds and of
building such other branches as might
be necessary for the development of the
business OF the company, the consoli-
dated mortgage was authorized by the
stockholders to secure $3.50, 000. 900 of
bonds, intended and believed TO be suff-
cient to pay off all the existing main
and branch line bonds and provide for
all the future purposes of the road for
many years to come, SO that the
said Oakes-Rolston board started of
With q Paying Property,
a large sum in cash on hand and with
the consolidated mortgage bonds to
draw upon, with which to meet all ex-
penses which should be properly charge.
able to capital account, and of which
the stockholders subscribed for and took
$13, 900, 600, and so that the said board
s'should, and in fact did, have ample
capital with which to conduct and prop
erly develop the business of the com.
pany." The petition then goes on to say
that the Cakes Rolston board man
aged to
Increase the Interest Charges
of the Northern Pacific company fol
branch lines from $26, 000, 900 toupwards
of $S6, 000, 900 all in one year, and for th'
acquisition of properties no one of which
except a small line costing less thar
81 ,0OO, OOO) ever has paid the cost o
operation and fixed charges, and man.
of which do not ven pay the cost o
operation, and the petition furthe
charges that in several instances, AMI
those the most disastrous to the com
pany, the officers and board of director
/, We're themselves interested in selling tn
properties to the Northern Pacific com
1 pany at an liz
. Exorbitant Profit to Themselves.
The story of the collapse of the North
. ern Pacific is then set out in great detail
naming particularly each of the raj
no Ids which were acquired by th
: Northern Pacific company and whic
the bill declares completed its rui
within one year of the Oakes-Roisto
board getting into power.
The petition AYERS that's in the COZ
q struction' Of the united railroads
. Washington the members of the boar
derived a profit Of 81, 75O, 600, while Il
q operation Of that railroad cost the Mort
. ern Pacific Railroad company, in Il
:, year ending June 80, 1893, $1o5, 600.
~ Divided the Proceeds
= The petition AYERS that the Rocl
= Fork and Cooke City railroad was own'
y by a syndicate Of which Willard W
president, and in which many Of q
: members Of the board of directors Of
!: Northern Pacific Railroad compal
- were participants, who divided amol
themselves "a, 900, 600 of trust certificate
y. g., 0OO, 900 of which represented I
y Rocky Fork Coal company, viii
:. owned certain coal lands which had ct
~ about $500, 600, and the other ", 000,0
of trust certificates represented the ov
ership OF the Rocky Fork and Coo
! City railway which cost not o,
~ $500, 0O0.
That the directors of the Northe
I. Pacific Railroad company caused
- Northern Pacific to buy from the
selves as owners of the Rocky Fork a
'nd Cooke City railway, for 81 400, 900
consolidated bonds, and then mad
= contract between themselves as rep
senting the Northern Pacific Railrt
company, and themselves as represe
ing the coal company, whereby the +,
ake road company agree to buy 500 tons
- coal per day at the price of $3.50
ton, delivered at the mines; and that
To Better Disguise tho Transaction
an agreement also provided that
, NJ profits made on the deal should