The morning call., 1894-05-12
HE PUT UP A JOB.
How Willard Acquired
Millions.
FORMED FOR A PURPOSE.
Inside History of the Chicago
and Northern Pacific.
LIGHT SHINES FROM THE BOOKS.
Shown That the Terminal Company
Was Organized Expressly to
Be Sold Out.
LIGHT SHINES FROM THE BOOKS.

New YORK. May 11.-Several new faces
were visible in the group of lawyers, di-
rectors and witnesses in the Northern
Pacific investigation case to-day. Among
them were G. w. Wright one of the North
ern Pacific Railroad directors, and A. c.
Spofford, president of the. Rock Fork and
Cook City Railroad and private secretary
to Henry Willard.
l. d. Searles, vice-pres ident OF the
Farmers Loan and Trust Company, was
recalled and asked whether he had been
able to find any record of the increased
capital stock of the Rock Fork and Cook
City Railroad Company from S740,000 to
$4,000 600. Mr.. Searles said that the COM
pany had no such record, and that the in
crease must have been made before the
stock came into the company's possession.
James McNaught. senior counsel for the
receivers, stated, however, that he bad the
minutes of the meeting Of the stockholders
and directors at which the increase was
authorized and was ready to submit them
at any time. The dates of these meetings
were April 5. 1889, and May 4, 1889.
Edward Edes, secretary and treasurer of
the Rock Fork and Cook City Company.
was replaced on the stand. c. ". Wet
more, president of the North American
Company, asked permission to appear as
counsel for the witness. He stated that
the books of the old Oregon TranscOnti-
mental inquired for yesterday were among
the old lumber of che North American
Company. He was perfectly willing TO
permit any of them to BE produced by Mr..
Edes which had any bearing on the case
under consideration, but wished to be
present to see that no others were pre-
sented. After some discussion as to
whether Mr.. Wetmore should not rather
appear as a witness himself. Master Carey
decided to allow him to act as counsel,
and the examination of Mr.. Edes pro-
ceeded. Mr.. Edes produced various books
Of the Oregon Transcontinental, which
were put ID evidence. He was requested
to refer to those portions of the books of
the company which showed in what way it
was concerned in the placing of bonds Of
the Chicago and Northern Pacific. After
much discussion it was finally developed
that when the Chicago and Northern
Pacine issued its bonds to obtain
funds for the purchase of the various
properties comprising il, they were de-
posted with the Farmers Loan and Trust
Company. The Oregon Transcontinental,
acting as financial agent Of the Chicago
and Northern Pacific, advanced the latter
some seven or eight millions and opened
subscription lists for the bonds. As the
latter were paid for, most OF them at 90
cents on the dollar, the Oregon Transcon-
tinental gave orders to the Farmers Loan
and Trust Company to purchasers for the
& ~ E0r inc
as financial agent the Oregon Transconti-
mental received a commission of per cent
At that time, January IS, 1890, an agree
ment had been made between the North
ern Pacific, the Wisconsin Central and the
Chicago and Northern Pacific, by which
the latter should be formed and leased 10
the Wisconsin Central and sub-leased TO
the Northern Pacific. The reasons for the
introduction of a temporary financial
agent was that the options for the pur-
chase of the roads and properties afterward
consolidated into the Chicago and Northern
Pacific Company were about to expire and Ii
was necessary to obtain an advance of
money from such an agent in order to In
sure them. Minutes Of the meeting of the
Oregon Transcontiu entail directors for
January Is. 1890. showing these facts were
read In full. They created something Of a
sensation, as they showed that the plan of
leasing the Chicago ard Northern Pacific
to the Northern Pacific was fully under
stood before the formation of the former
company, and that ii was formed for the
nurnose of so leasing it. This has already
been denied by the Chicago and Northern
Pacific people. These books of the old
Oregon Tran sentimental have never been
before seen by the counsel on either side
until the present investigation. The min
utes OF the meeting of the Oregon Trans
continental committee in New York, jan
nary %. 1890. and May &c, $780, were also
read. They recited the various steps in
the formation of the Chicago and Northern
Pacific and gave lists of the property held
by that company after its formation.
Throughout the minutes showed that
every step in the formation of the Chicago
and Northern Pacific was taken with the
advice and instruction of the Northern
Pacific and with the intention of leasing
the Chicago and Northern Pacific to the
Northern Pacific through the Wisconsin
Central company. The S200O0,000 Of
bonds of the Chicago and Northern Pa
cific were sold at go per cent. and should
have brought in SIS. .O0O 900. but only about
S9OoO,000 appeared on the books of the
Oregon Transcontinental as having been
received, and there was nothing to show
from which purchasers this had come.
"Mr. Edes," said Mr.. Pettitt, ION the
list of subscribers to these bonds find a
snbscription of over S4.000,oOO by the
Dantscher Bank, j. a. S. Stearn, Henry
willard and associates. Was this sub
scription ever paidP''
81 don't know" replied Edes. 81 sup
nosed it formed part of the lump credited
to the case"
"Have you nothing to show it was re-
ceived ?"
may show"
.svsry WELL" replied Petit. "Here is
the subscription of c. L. Colby for himself,
MT. Rockefeller, Mr.. Hoyt. MIR. Prever,
Mr.. Abbot and Mr.. Colgate for 81. ooo'ooo'
Have you anything to show that this sum
was ever paidP
"Nothing," replied the witness, "unless
the checkbook does SO"
Ell said Pettlt. you