The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-16
RECEIVER HITS BACK.
His Statement of Rainier Power
and Railway Affairs.
MANY ECONOMIES WE'RE MADE.
Mr.. Bsekss Mshss cAsrrss Agsanss the
Decays ana Dsssnss HIS
Msssgemsnt

NJ r. Backus. receiver oe the Rasrier
Power and Railway Company. yesterday
filed hfs answer IN the United States cir
cult court. to the petition OF Louisa Den
ny and other creditors for his removal
from the recsivership. The anxwer .
very vciuminous anf denies each and
every Of the charges made against him
The following h a brief summary OF the
principal allegations in his answer:
he alleges thar nearly all petitioners
are, directly or Indirectly, debtors In
stead of creditors OF the Rainier Power
and Railway Company. and says the Pc
tition vas fled only because he had com
menced suit against the stockholders on
an assessment made by the United States
court for unpaid stock subscriptions He
denies. absolutely. the charge that the
mortgage given By .. T. Denny 10 secure
the Roe note was for his personal benefit
in any manner whatever. He deries that
either himself or r. o. Graves ever
owned the note in question and states
the note was originally held by the
Washington National bank. but that IL
had been sold ard transferred 10 a third
party long before the second mortgage
was made. and at that time neither him
self nor the bank had interest therein.
He states that the order 20 pay the
ioggers' claims from proceeds OF lumber
sales was granted by Judge Hanford In
January, 1854. on a petition filed In Au-
gust. lSs3-nearly Eve months before-and
after full notice to all principal credit
ors including the Dennys> Bausman,
kelleher & Emory. solicitors for the
National Bank of Commerce. OF Provi-
dsnce. the largest single creditor, and
also solicitors for the Union Trust Conn
pany of New York, trustee for the bond
holders. and Ssratton. Lewis q Gilman.
who at that time represented all those
signing the petition for the receivers
removal. except the Washington Improve
nenr Company and Louisa Denny. and
that ID. 7. Denny, president OF the WASH
fngton Improvement Company and hus-
band Of Louisa Denny. appeared and con-
scented 10 the granting OF the order.
He alleges that the statement made by
the petitioners that "the Rainier company
never directed payment Of the Ioggers'
claims from the proceeds OF lumber
sales is absolutely false: that d. T. Dem
ny, president OF the company, issued a
written order directing such payment
before the receiver was appointed; also
that the statement that the loggers ss-
signed their claims TO ID. I. Denny ana
accepted mortgages instead. 10 false. as
shown by the fact that the order to pay
loggers' claims from lumber sales is dated
three days subsequent TO the date of the
said mortgages. and by the further fact
that practically all the ioggers' claims
were represented by acceptances given
by the Rainier company. which were held
by the ioggers or their assignees when
the receiver was appointed. and which
acceptances are now in the receiver
possession
He states that he has greatly reduced
expenses since his appointment and Illus
trates by showing that the charge for
salaries OF officers and ONCE employees
prior to his appointment VS. 500 per
month. but that. including his own SAL
airy. 10 is only $50 per month. . decrease
Of IS per cent.
He further shows that the deficit In
1896. prior TO his appointment. ON the OPP
Grafton of the railway department was
at the rate of ssss3 per annuua. while for
the balance OF the year the denc.t In the
same department was at the rate OF
S.ss6 per year. a reduction OF - per cent
notwithstanding the receipts decreased
II per cent during the same period.
Answering the charge that In his 40
counts, he has charged the railway and
light departments too much for steam he
states that this Is mere mater Of book
keeping. the same amount being always
credited 60 the mill department. and
whether the amount is 81 or s. 900 Ter
month Is perfectly immaterial as aseee.-
ing the final results OF the company's
operations. and Is done simply TO show
the expenses of operating the several de-
partments. The steam plant being To-
Gated In the mill. reasonable charge Is
made against the railway and light de-
partnent and credited to the mill de-
psrtment. which supplies the power.
He admits that under other conditions
the railway and light department might
be operated without loss. and states that
months ago he conceived tire plan OF clos
ing down the southerly end Of the raIl-
way and leasing the northerly end to the
Consolidated company az a rental which
would have paid all expenses except in-
terest. and by connecting the lines at
Lake Union. have given the public bet
ter service than that now furnished; that
after an informal consultation with the
court he applied TO the city council for
leave 10 carry this plan into effect: that
an ordnance for this purpose passed the
board OF aldermen. but was defeated IN
the house OF delegates by the active ef-
forts OF d. T. and J. b. Denny. greatly
10 the loss and injury OF tho creditors
OF the company.
The receiver denies that he has unnces-
savily sawed and piled up lumber. carry
ing the same on the books Of the company
as profits, and states that the total
amount OF lumber now on hand sawed
by him IL rot more tran one tenth thu
amount Piled up IN the yard when he
took charge Of the property. lie says he
has run the MIL only enough 20 work or
ol3 stock by supplying lengths and sizes
OF humber required to III orders. and
claims 70 have greatly reduced the loss
IN operation Of thu MILL stating that tha
loss for IG days 81 iSSa. prior 10 his ap-
polntment. was sii.s5a. or al the rate or
81. S3s per year while for the &c remaining
eays OF IS3S following his appointment.
there was a surplus over operating ex-
perSes OF 81 AZ. or at the rate OF $500
per year, an Improvement at the rate OF
ever sSaas per year under the receiver
ship. Earnings OF the rill department.
for SIX months ending June -. 1884. are
given as s@s.22l and operating expenses al
ST sos.
he denies that he has IN any manner
neglected the light plant OF the company.
but claims that TIE business OF that de-
,.~s-,A-. has greatly fusproyed under his