New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-09-14

MADE THE BASIS OF ACTlON-ALLEGIN;
THAT PROPERTY COSTING ss.OOOOOO
WAS sADDLED ON NORTHERN
PACIFIC FOR $4,000 600.
The long threatened suit against Henry Willard
and his associates in the Northern Pacific Rail
| ,oad Company has been begun in the Supreme
Court in this city. The complaint was filel IN
,ba County Clerks Office yesterday The plain
III il John Swope. Of Pennsylvania who owns
tventy-fvc shares of the preferred stock of the
Northern Pacific Company, and he sues on behalf
sf himself and other stockholders. The defend
ants named in the suit besides Mr.. Willard are
Charles L. Colby, Colgate IIoyt, Edwin II. Abbot
tbe Northern Pacific Railroad Company and its
three receivers Thomas F. Oakes, Henry c. Rouse
and Henry G. PAYNE, and the Chicago and North
ern Pacific Railroad Company.
Mr. SwOpe brings the suit becaue the receivers
n the Northern Pacific Railroad Company refuse
% take any action. He seeks to enforce from the
individual defendants the restitution of several
million dollars of which the two railroad compa-
ME. are ALLEGED to have been defIaudcd
According 10 the complaint MesSrs. Willard,
Celby. Hoyt and Abbot wcre and still are :hc
trustees of the Wisconsin Central Company, which
owns all the stock Of the Wisconsin Central Rail
road Company I'm September. SS9 these four men
owned land at Iisrrson-st and Fifth-ave, Chicago,
The title of which in the name of John +.
Neal as trustee. passenger station was being
built upon this property. which was subject to
purchase money mortgage of S630,0O0 Tho
total cost Of the building TO he $4,000.
About $3.50 Ooo of that sum had not been paid
nj the time mentioned.
The same four men owned and controlled the
Chicago and Great Western Railroad the Bridge
port and South Chicago Railroad Company and
the Chicago IIarlen and Batavia Railroad Com
pany All three of these companies operated
lines Of railroad in Chcago. Their capital stock
had no market value. because of bonded indebt-
edness in excess Of the real value of the property
owned by them The value of the land on which
the station was built. and of the three rail
roads was about SS, 900 900 in March, 1890.
Mr. Willard and his three associates were d.
rectors Of the Northern Pacific Company, ana Mr
Willard was chairman of the board MI Apoo'
was president of the Wisconsin Central Company
and the Wisconsin Central Railroad Company
Thus they had control of all these valuable prop
critics mentioned thus far.
According 10 the complaint, these four men
ronspired. in 1889, to sell all this property IN
Cbicaoo. which had debts amounting I" It's full
value for an enormous price to the N'r'h'rh
Pacific Company thus rchbing that company toy
making il nav big price for something not
uor,h a dollar Swope charges that these iour
sold. through themselves as directors, all TINS
chicago property 10 the Northern Paclbc Com
rany and by the scheme they netted proh's
amountine~tc 81 ,5ee,e"o
The way they went TO work by forming
!. corporation TO which all the Chicago properly
was conveyed Then this property was mort
gagged for large sum. and finally conveyed 10
The Northern Pacific Company Inc ia''er con"
many assumed all the Obligations ol '' PoP-
ertv which was conveyed to it. In this trans
action Mr. Swopc alleges that Mr.. wizard anu
his associates received large sums Ill S'ooN ""'
bonds of all the companies.
Mr.. Abbott RETIRED Mr.. Swope declares, from
his rosition a. director Of the Northern Pacihc
Company until after the deal was consnmmatcd'
and then ne was elected 10 his old position a@alh
This was done. il j, charged. for the purpose VI
covering up the conspiracy
The next step was the organization on No'rn-
Der %. $50, of the Chicago ana Nor'h'rh IA
elf, Railroad. with a capital OF s""'ooo''o'
Mr. Swope declares that the four men Iiio H''""V
for ten shares of the company, ana tha' 'hl9 was
practically all the real capital the company ha'
On March = 1890. the Chicago property was con-
yeved 10 this new company for S3''4''oVo' !"
s,ock Of the company. and 81 $4,000 in bohls'
10 be secured by first mortgage upon 'he Iii" ]"
question and the three RAILROADS m'h'loh'"' i"
The Chicago and Great Western kaiiroa' '''"
many WAS leased 10 the Chicago ana Nof'l'r"
Pacific Companv for ten years, al rental oI
$500 900 year, and three days later lt' prop
ertv wa. sold 10 the Northern Pacific Company
fer S?2 800 900 in stock Of TIE company an" Fi''
$4,000 in bonds. 10 be secured by MORTGAGE
Bond. to the amount of S399O00 wer" retained 10
,e,ire = like amount of the first mortgage h9hus'
having ~ t. 10000 the net amount fcc'iN',. II,
The Bridgeport and South Chicago kllio1Ji
Companr ,lsn leased It's road 10 the thicaSo anu
NortEer11 Pacific Company for SG2, 600 year ana
three DAYS later il was sold 10 the N"ith'I" 10
eifc Company for -. .?j0,oOo III Sto"k ol ] ,', hy
pany, and Sl,jOO,OOo IN oohus' S''"''" %
mortgage. A.. c1,icaoo
The next operation was leasing the Nni'"I", ,
Harlem and Hatavia Railroad Company TO the
Chicago and Northern PacIt ooHpr 9nU la,~,. ~" a.
years, at $4,000 n year. llrcc "ff Ia Ill.,,
usual the same company was sold TO the N'ltMIh
Pacific Company for 81 800 900 in stock ana -
1hus all this property which Mr.. .Swope dec! !aItS
IN his complaint not worth more nan 'Co,
oo0 was conveyed 10 the northern l'c."o md
pany, for which il paid S29,999o 600 III s'ocM 'rs f
S300O0 O0o in bonds Of the bonds tn" sum OF
Vs,s50 O00 was 10 he secured by mortgage "pom upon
the property bc conveyed: Inc fari'Ia so" so
and Trust mpany was mad" trn>"'' i"i t'' ;.s f;,
soc,OOO in bond, Mr. Willard and his associates
received SIS 500 900 in these bonds ioi thc stooN
which they held in IN" thrc" hlcag" co,npS ,ppSt
MES. and the stock was assigned 10 'hc 'r"S'
company. ~
9. ihe next step in the ALLEGED conspirry' VIZ.
swore says was when Mr. Willard and his 49, 10
cslates then made 20 thcmsclyc, "A, owners oi 'ns
Wisconsin companies lease for ninety ,h,nc h'l, r
q al the property of the Chicago ana NOT"
raelhc COMPANY The lease was suII'c' I" ."r
men OF the mortgage OF 100000, 600. ne p'I'",,r
money mortgage of S6jOO0O on the 'hi'I-o a.: ~"
uon property and other smaller out'tnI'.o H..
MORTGAGES. The Wi.oonsin companies a3re'" ~
sy S350,00o year rental. the interest," on ll tu'
mortgages and the expenses Of maintaining IN" I'M
@so and Northern Pacific COMPANY up 70 sum
hol 70 exceed S2.. 900 a year.
The last step was leasing the Wisconsin , ,"n'I "n'1
pany 10 the Northern Pacific COMPANY, on ApIiiii
1890. for ninety nine years, subjcb 70 AL
nnnrfna IL IL