The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1894-09-09


| Chancery A. l.. Carey filed his report OIL
matters referred TO him for investigation
| in connection with the Northern Pacific
receivership contest this afternoon. Til,
report is bulky document covering Is;
| closely typewriter pages and contain:
| -. goo words. l. is a complete victory FOL
/ The receivers, the master exoneratins
| Thomas Cakes from every charge pre-
ferred against him, but Henry Willard i:
! found guilty of having made unlawful
! gains as a director of the Northern Pacific
! Railway company.
A synopsis Of the masters report. show
ing the various findings, follows:
l. The master finds that Thomas F.
Cakes bad no peculiarly interest III and de
rived no personal advantage or gain from
any OF the matters referred for lnvestiga
tiou.
2 The master finds that Henry Willard,
a director OF the Northern Pacific Railroad
company, made unlawful gains by the
acquisition of the railway of the Northern
Pacific and Manitoba Railway company
by the Northern PAcific Railway company
to the extent OF 1868, G91.70.
3 It Is found that Mr. Cakes did not,
and was not bound to know that Mr.. VII
lard was interested in the Northern Pacific
making any unlawful gains By the acquisi-
zion of said railway by the Northern
Pacific Railway Company. As Il sequence,
the master finds that Mr. Cakes was not
bound to take any measures To prevent
Mr.. Willard from making such unlawful
gains, or for the protection of the interest
of the Northern Pacific Railway company
In respect thereto.
4 During the four fiscal years ending
June so. 1898, the Northern Pacific com
pany made savings under its contract with
the Rocky Fork Coal company to the
amount of 81, S93, 5Sl.91, an average of over
S475. 900 per year for each of the four years.
). The master finds that William l..
Bull, Charles L. Barney, James b. Hagen
and Charles 3. Wright, directors OF the
Northern Pacific Railway company were
interested in the Rocky Forks and Cook
City Hallway company and in the Rocky
Fork Coal company and IN the acquisition
by the Northern Pacific Railway company
of the Rocky Forks and Cook City Rail
way company and in the contract maze by
the Northern Pacific with the Rocky Fork
Coal company.
G. The master finds that no directors of
the Northern Pacific acquired unlawful
gains by the acquisition ny that company
of the Rocky Forks and Cook City railway,
or by the arrangement made with the
Rocky Fork Coal company.
g. The master says he cannot find that
as TO these subjects of estigatlon, Mr..
Cakes was In any respect disloyal to his
company or its interests.
S. The master finds that the Chicago
Terminus cost the original parties that
were Interested in them, at the time they
were turned over to the Chicago and
Northern Pacific company, SO. 296 1892.
9. The master finds that the Oregon and
Trans-Contlnental company received SlS-
l. I. l. - n. 1
y orLherD Pacific company and that 1t Is
possible to trace the disposition OF all of
them except three bonds. These bonds are
for.
10. On pages 134 and 135, the master
states the account with the Oregon and
Transcontinental company and shows
that it received from these bonds SIS, Co.,
$40 IS; that it paid out for these properties
aud expenses, etc. SIS, 4Sl 0S5.42. leaving a
balance Of SlS6, 1886. unaccounteG for on
the debit side of their account. That Is
SWelled by these considerations.
IL The master credits the company with
having paid 81, $50, 0g0 for the station
which WAS IN bond the same as all others
Ia the account are on a cash basis. Re-
iucing these bonds to a cash basis, same
As the others, 80 per cent, would increase
the debit side OF the account S315, 600. Fur
thelmore he finds THAI S441, 600 of the
bonds were delivered to Baxter, treasurer,
for the purpose of finishing the sta
ton, should be charged up ana would
increase the debit size of the account Of
the cash value of those bonds at 90 per
cents, S44,0 900. The testimony only SHOWS
that they had paid in cash $4,000 it the
purchase of the station. The master fluids
That there are S4t9. 600 of the bonds that
we're delivered 10 Willard upon Mr.
Wegg's order, but are entirely uuac-
counted for except that there were re-
;eipted for bv MIR. Willard through Colonel
dOyt. The Oregon and TrauscoutinenUal
company, III all its transactions relat-
ny TO the acquisition o. tde several
Chicago terminal properties, aosed as tie
agent for the real parties ia interest, who
sver thew may have been. Tbs Is indicated
)y the agreement of Jauaary, 1890. with
he Wisconsin Central company. showed
5y records of these transactions. Consid-
,rable testimony was given tending to
show the disposition made by the Oregon
rranscontineutal company OF the moneys
[ had received on account of these prop
,rties, but the master says he shall
lot attempt to further trace such
moneys or look into the accounts
II the Oregon Transcontiueutal company |
IS he has reached the conclusion that for
he purpose Of these Investigations, IL Is
mmsterial whether such moneys were
tent or who received them, Tor reasons
which he then states:
Messrs Colby and Hoyt were the only
members of the Northern Pacific board
Turing the years 1889 and 1890, in which /
he transactions under review took place
hat apparently had any direct interest IN /
he Chicago terminals. They acquired !
uch interest long prior 70 the time |
when they became members Of the
Pacific board, and AT time when |
hey owed no duties 20 the Northern Pa !
afic company. The Northern Pacific COM
,any dIu not furnish these bonds |
md were not IN any degree liable ioT |
hem.
u Is true that by its lease OF April I. |
$50. with the Wisconsin Central system,it I
lad assumed all the covenants ana agree 1
nents made BY he Wisconsin Central COM 4
ANY ana that the Wisconsin Central COM /
,auy with its terminals thereby have /
greed 10 nay the Chicago * I
Northern Pacific company in addition /
. "a nXed annual rental OF 500. OCO a sum
efficient 10 pay any deficiency on the fist /
mortgage bonus Of The Northern Pacific 4
he bonds in question not derived /
rom other rentals. There was NOT direct /
romIse 10 pay TIE interest due on this and !
lence no right Of action upon the cove
ANTS or agreements existing against the 4
Ompany. The agreements OF the North
IN Pacific TO pay or guarantee as rental /
sum sufficient 70 pay the Interest on 4
hese bonds, WAS OF that character. and /
made only with such purpose that IL could I
& any time be cancelled By the mutual 4
ousent al the two companies. and the 4
o.ders OF the bonds would Be vemediless 10 /
revent such cancellation. There was no 4
Creement whatever on the part OF the 1
Northern Pacific Railway Company 20 pay /
r provide any funds for the payment az 4
entails or for the payment Of 4
he>e bonds. L cannot. therefore.
e said that the Northern Pacihc
Hallway company has paid any Interest CT
he bonds that have come INFO ne hxnGs 4
I the Oregon Transcontinenial company
Z this wen q snit or rlrnc-.olnc a b