Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1894-01-05

milwaukee,, Dec. 2S.-A sensational
turn was given to the Northern Pacific
railroad receivership situation today,
when SilaS W. Petit. OF Philadelphia
the general counsel of the corporation
appeared before Judge jenkins of the
United States circuit court in chambers
and filed Il petition for the removal
of the present receivers, MeSsrs. Thorn
as f, Cakes, Henry c. Payne and Hen
ry G. Rouse, and for the appointment
OF other receivers in their places.
Not Il hint Of this extraordinary and
unprecedented move on the part of
the company had been allowed to be-
come public property, and even the
court was i'll ignorance of the motion
about to be made when the lawyer
from the Quaker city appeared,
Attorneys Petit and Harper, after Il
brief presentation of the matter us
set forth in the petition, obtained an
order from Judge Jenkins requiring the
receivers to file an answer within
twenty days.
In its petition the company, which
is now controlled by Brayton Ives and
were appointed i'll the interest of the
cid management. They accuse the
former directors, MeSsrs. Willard Hoyt,
Colby and tEeir associates, of wasting
millions of the cOmpany's money and
of diverting fabulous sums to their
own pockets.
A great deal of what appears to be
inside history is contained i'm the Pc
titiOn. which is lengthy document,
but exceedingly Interesting.
The bill goes on at length into the
history OF the road under the manage
ment suSt preceding the receivership.
declaring The property was wrecked
thereby by fraud and incompetency. 1t
declares that Cakes, as president of the
company. APPOINTED II. G. Rollston,
president OF The Farmers Loan and
Trust company, of New York, as chair
Liam of The finance committee of the
road.
At this time. it is asserted, the line
was i'll good financial condition. with
S2.U6O.Gm cash in the treasury The
Cakes IL ltSton board managed to in
- IL
lines from S26,OOO,OOO to $50, 900 900
inside Of one year for acquisition of
properties which. with one small cx-
ccption. have never paid the cost of
operation
The petition further charges the Off
crrS and directors with being person
ally interested in selling these proper
t;rc IN tho Northn,.1, panifit. ~ + nIn,hit
ant profit to themselves. Going into
the deals of these Transactions, the bill
says that in the construction of the
united railroads Of Washington the
members of the board derived a profit
of 81: $50, 900, while it cost the company
TO" operation during the year ending
June 80, 1893, $155,6OO
II is further charged that the syn
dictate, Of which Henry Willard was
president. and which included many
members of the Northern Pacific di-
rectory divided among themelves 81,
100000 in trust certificates of the Rocky
Fork & Coke City road, of which So
100000 represented coal Lands worth
only 100000, and the other $2.0OOOOO
the Rocky Fork road, which cost only
$SOO,OOO. and which the directors
caused the Northern Pacific to buy
from themselves for $1,4OO,OOO.
BY similar methods the directors are
charged with making $2,00O,0O0 out of
the Northern Pacific & Manitoba deal,
which was operated at an annual loss
OF 100000. Also that the directors
guaranteed interest on e.tnb. (tH
more bonds of railroads us branches
to its system, none of which has
earned interest.
1t is claimed the price paid for the
Chicago 4 Northern Pacific, with it's
terminal facilities and depot in Chicago
was $10,O00.0O0 in excess of the cost IF
the property and that the profits from
this deal were divided among Northern
Pacific debtors.
The bill claims that by reason Of
these and many minor acts of q SINH
lar character the credit of the COM
pany was rapidly deprecated so that
its floating debt could not be taken care
of, and that, by collision and with
out the knowledge of many directors,
Cakes and Ralston had the former ap-
pointed receiver; that receivers were
obtained for fifteen branch lines. there
Ivy largely increasing the expenses of
operation; that in all twenty-three sets
of receivers, subject to the jurisdiction
of six different courts, were appointed.
adding enormously to the expense Of
receivership proceedings.
The bill declares that stockholders
have cause of action against Cakes and
Ralston; that the action must be
taken in the name Of the receivers,
and as it is not competent for Cakes
to sue himself it is absolutely neces-
sary that another be appointed in his
place; that it is necessary to reorsanizc
the road; that money for the purpose
Of putting it on solvent basis cannot
be secured so long as it is in the hands
of receivers in sympathy with the di-
rectorS whose fraud and incompetencv
wrecked the road Therefore the other !
receivers should be removed.
TAMPERED WITH RETURNS. /