The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-01-12
Suit Against the Concern for
Breach of Contract.
THE CREDITORS ARE INTERESTED
An Attempted sale of Property in
=. Fresno County Containing the
Fifty-two-M Mile Flume.

come up Tor nearing on Monday next be-
fore Judge Trout. 1t involves not only
large amount Of money. but also property
concerning which there has been much
talk of late.
-. The suit is brought by Valentine Gades-
den against the Kings River Lumber Com
.paDy TO recover $3.50 600 for breach of con-
" tract and $4,000 necessary expenses in
-'curred by the plaintiff at the auth orization
of the board of directors. MIR. Gadesden
= claims that he was empowered 10 sell the
com pany'S property, consisting of large
: lumber mills IN Fresno County and the
.ffty-twO mile tiume, which is in the public
mind at the present time the most probable
: means by which the notorious Chris Evans
effected his escape.
-:Ibe facts and circumstances leading to
Tie action are as follows: Up to the year
:. 1885 the San Joaquin Valley had been de-
!. pendent for its lumber upon the counties
0f"Mendocno and Humboldt for red y God,
and upon the State of Oregon for pine
wood, Involving high charges for freight
after delivery at the ports of San Fran
cisco and San Pedro. About that lime A.
=: b. Moore. the Pine-street lumber man,
Hiram c. Smith of Sanger, Fresno County,
.:aIld a Michigan lumber man named Dncle
.:lncOrDOrated company called the Kings
:: River Lumber Company, formed for the
object of supplying the San Joaquin Val
ley with pine and redwood from the Sierra
Nevada Noun talns, fifty miles back OF
=. Fresno
-: The great difficulty that lay in their
=: way was the question of a means oil trans
port. and 1t was then that the idea was
conceived OF constructing a flume from
the headwaterS Of the Kings River TO the
: town of Sanger, ten miles from Fresno, a
distance altogether of ffty-two miles. The
. VIC onH Inn, ka-
: mnun talns and float the sawed lumber
: by means of the fume down to the heart
-nt:the. valley. 1t was supposed at first
: that the idea was imprRcticable, but, in
spite OF all the adverse criticism of the
: engineers, the fume was constructed
chiefly by the enterprise of Hiram c.
Smith, who is not an engineer.
:. Ehe company next acquired Sc, 900 acres
: OF valuable timber land situated around
the head of the hume. There was some
dispute concerning the acquisition of this
:: property, owing 10 the laws governing the
= taking up of timber sections by individ-
..ualS and the acquiring thereof by cOrpO-
TattOns. This Decessitated the sending
out OF a special agent from Washington to
investigate; but in the end United States
patents we're granted 10 the company for
practically all its claims.
=. The company then constructed a large
Gam, sufficient to supply the flume with
water Tor two years, al tie head OF the
fume, and also acquired considerable
wafer rights at the head of the Kings
River in case of the dam breaking. Under
1.-The supervision of MI Smith the tlume
was finished and was in operation up 10
Septembe 1890. 1t is a 36-inch V-shared
fiume mounted on trestles varying from 80
. TO 120 feet in height, and passing through
the rocky canyons OF the Kings River.
The altitude at the head Of the fume is
5000 feet bOve the sea level.
About a million dollars was expended in
the purchase and construction of mills,
fume, lands, etc, and besides this the
company built large factories at Sanger
for the making Of boxes. Taisin trays,
Shingles. shakes, posts. laths. etc.
. Toward the end of $780, impressed by
the amount of EnglisE capital that was
flowing into California, the company con-
.ceiyed the idea of disposing of the plant to
Gadesden came forward and entered into
negotiations TO sell the property. 1t was
ito be an experiment, and Gadesden was TO
ind the best market be could. He now
claims that most glowing accounts were
presented to him regarding the immense
profits Of tile concern. and he undertook
IT'D to London, taking photographs with
him, and soon Interested group OF prOml-
.uent English capitalists.
Gadesden so Impressed these men with
the scheme that he persuaded a represent
alive 10 come out and examine the property.
John Hudson of the firm of Malcolm,
Il udsOn & Co. came out, was favorably
impressed, and returned to England laden
with further glowing accounts Before
leaving an option was given 10 Gadesdeh
by the Kings River Lumber Company.
covering the whole property and plant, for
s., 100000 and with it, he alleges, state
]gent Of the profits earned up TO date as
. being S125.000 for the three months from
September TO Decem Der 1890, and ganer-
ally estimating the annual profits at $780,
IN he mi N OF m
1881, and expired on June a. 1891.
..;elu June, 1891, w. ". Duncan, another
prominent member of the wealthy Eng
IISh syndicate, came out TO make further
investigation. In the end he informed
Moore that subject TO the cOmDany's state
:. ment. of accounts being verified be would
recommend the purchase of the property.
life arrangements in London, however,
TO purchase the property from Gadesden
were delayed owing TO the difficulties ex-
- Derlanced in collating the statements of
the Kings River Lum Der Company, with
view TO putting them in proper form to
make contract. and Gadesden SAYS be at
.once told the company that an extension
of the option would be necessary. 1t is
= now his contention that the option was ex-
tended pending the negotiations, which
Continued without interruption between
. Gadesden and the company, the latter
continuing to supply fresh accounts and
Bta temeDts.
In September, 1891, Gadesden was in
- formed by cablegram from London that
the purchasers were ready and that Hud-
son was prepared to start for California to
= com plete the purchase, always providing
that the statements furnished were found
To be correct. With the consent OF the
company Gadesden claims that be cabled
to Hudson 10 start, and on NoVem Der IL,
1891, Hudson arrived.
Then difficulties arose about the con-
tract Gadesden says that as soon as ex-
perts began to arrive the Kings River
Company asked leave to modify its state
nnents as TO profits. while still wishing
to: conclude the deal. 1t is alleged that
~effers were made previously to guarantee
all accounts. Gadesden's answer was:
If you reduce he guaranty you must
reduce the price," The statements of
pEofts then fell to $4,000. then to
1890, 000 fbally dropping to 100000. Yet
no contract was made. Various excuses
were made up 10 January %. 1892. when
M6ore sent for Hudson and Gadesden
and. told them that under stress
Of financial difficulties he had SOLD the
property TO Colone Fryant, lumberman