The morning call., 1894-12-15
IT'S BIG cooKED-UP CASE.
Trying to Impose on the City a
100000 Burden.
JUGGLING WITH STREET BONDS.
Facts That Were Admitted" in
the Agreed Case May Prove
Boomerang.

The secret purposes of the Market-street
Railway Company, otherwise the Southern
Pacific of Kentucky. are coming to light
AS usual the railroad seems 10 have an
other big cinch ready for the city-this
time 10 the tune OF $50. 000 600 burden in
street transportation alone.
Light upon the inside facts is likely to
be contributed By the combines own rash
action. Usually it works in secret, and
probably its most crude step Of recent
years was the attempt to have the agreed
case" on the validity OF its bonds rushed to
a decision in the Superior Court on Wedues-
day last. AS was reported exclusively in
THE CALL, that"ag case"was smuggled
into Department 6 during the recess hour
on the day after the complaint was filed "a
most unusual state of affairs), taken up
out of the calendar order and submitted
without notice to opponents, if any.
The proposed issue of bonds was ST.
100000; the outstanding indebtedness of
the combine amounted to S7,035, 900; the
capital stock only came to SIS, $50, 000
Therefore, taking into consideration the
bonded Indebtedness of the POwell-Street
and Powell and Cliff House road, propos-
ing bond-buyers claim that the issue is
illegal, as it increases the combines in
debtedness to an amount exceeding the
capital stock. Another exception to the
bond issue was that the directors voted 1t
at meeting when only small proportion
of the stockholders were represented. Yet
another objection was the introduction in
the combine of a road not entitled to mem
bership-the Potrero and Bay View Rail-
road.
All these objections were pooh-poohed
by the attorneys for the railroad-Herrin.
Foulds and Belcher-and were but
formally urged by the attorney for the de-
PENDANTS, Robert Y. Hayne. The matter
was then taken under advisement by the
court.
Such were the dry details of the suit
Looked upon casually as an agreed case"
with holders of legal bonded Indebtedness
on both sides 1t was hardly likely to at
tract much attention. Owing to the over
wheming values involved and the unfa-
miliarity of most OF the public with the
techniealities OF finance. it might have
passed by. Had it not been for The
CALL the circumstance would have es-
capped the public eye.
AS a matter of fact the entire proceed
ing seems to have been an extraordinary
one. II appears 10 have been arranged
with view of confusing the issues as at
present pend ing in court.
Both the Luning casa and j. II. Smith
case involve the matter at issue, and their
decision would have probed the business
to the bottom ana shown the combine to
be either illegal or the contrary. One
case is even now in the Supreme Court.
But the railroad managers gave these
cases the 90 by and preferred to take a
snap" judgment in the Superior Court.
OF the existence of material suits in the
higher tribunal the court below was not
informed.
The reason why these litigants men,
toned did not join in tile present suit is
that they could not have their facts ad-
United. But the same facts are, it is al
legged. admitted in the case now in the
Supreme Court Thus, if a decision IA
vnrdble to the validity of the bonds is
rendered in :he lower court and 90 further
proceedings in the matter are had, The
standing of the similar cases will be mate
rally affected in court and the result will
be chaotlc-but in the ntime, the rail-
road hopes, its bonds will have been mar.
keted.
The interests of the entire city are al
stake in this innocent appearing suit.
The issuance ofthese bonds means another
burden on the city. which would be of in.
definite continuance.
From one of the prominent stockholders
it is learned that the roads az recon.
stTucted will not cost more than $4,000, 600
Their much greater capitalization i:
ascribed 10 inflated values. For instance
the value Of he stock of the old horsecal
companies was completely wiped out By
the application OF electricity. There i:
nothing left of them but the franchise Il
operate the road. which franchise, by the
way, was granted for the benefit of the
public. Hence, the cost of transportation
should be reduced, as the business undel
the combine will return much more than
per rent
The present project ought to be very
profitable one. The railroad building wa.
originally constructed on the sale o.
capital stock. The corporation promoters
now propose to build on, other people:
money, obtained by sale of bonds. and
manage the road to suit themselves BY
Issuing the stock illegally without payins
therefor. If this is the proposition, as ap
pears indubitable. there are millions In il
for the promoters.
1t has been urged by business men thai
it would be difficult for the combine &c
dispose OF its bonds in this city, where
their character is known. But the fac
remains that there would be ready mar