The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-05-12
THE NORTHERN PACIFIC SW|NDLE
Sensational Evidence Being
Developed.
The Willard Syndicate Shown Up in
d Bad Light.
Transactions Involving Millions OF Dell
lars without Any Record OF Who
Paid or Received the
Money.
BY the Associated Press.

|
yers, directors and witnesses in the
Northern Pacific investigation case 60
day. Among them were @. ". Wright,
one of the Northern Pacific directors,
and A. G. Spofrord. president of the
Rocky Fork and Cook City railroad, and
private secretary to Henry Willard.
l. D. Searles, vice-president 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 $4,000 to
$4,000. 600. Mr.. Seares said that the
company had no ouch record, and that
the increase must have been made BIS
fore the stock came into the company's
possession.
james McNaught. senior counsel for
the receivers, stated, however, that he
had the minutes OF the cAeoting 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 wers April b, 1883,
and May s. 1889.
Edward Edss, secretary and treasurer
of the Rock Fork and Cook City COM
pRny, was replaced on the stand. O..
w. Wetmors, president OF tho North
American company. asked permission
to appear SO council for she witness. lie
etated that the books OF the old Oregon
TrEnsccntinentsl, inquired tor yester-
day, wore among the old lumber OF the
North American company. He was per-
fectly willing to permit any of them to
DO produced by Mr.. Edes. which bad
any bearing on the case under consic8-
ration, but wished 10 be present to see
that no others were presented. Alter
come discussion as to whether Mr.. Wet
more should not rather appear as q
witness, himsef. Master Carey decided
to allow him TO act as counsel, and the
examination OF Mr. Edes proceeded.
Mr.. Edss procured varioue books OF
the Oregon TranscoRtinentGl which
we're put la evidence He was requested
to refer to those portions OF the books of
| the company whieh showed in what way
it was concerned in the placing of the
bonds of the Chicago and Northern PaCi-
| fc. After much discussion it was finally
developed that when the Chicago and
| Northern Pscifc issued its bonds TO
obtain funds for the purchase OF the
various properties comprising it, they
were DEPOSITED with the Farmers Loan
and Trust company. The Oregon Trsns-
continental, acting rs financial agent OF
| the Chicago and Northern Pscihc, ad-
vancsd the lattsr aome esven or eight
millions, and opened subscriptions for
the honda. Az the latter were paid for,
tho most of them at so ceata ON the dol
| lar, the Oregon TrGlsccntinental gave
orders on the Farmers Loan and Trust
company &c purchasers for the delivery
| of the bonds. For Lhsae services as
fnsncial agent the Oregon Transconti-
mental received a comD,i5sioa OF 3 per
cent. At the Tins, January Is, 1890. an
agreement had been made between che
| Northern Pacific, the Wisconsin Central,
| Chicago and Northern Pacific, by which
the latter should be formed and leased
to the Wisconsin Central, and sub
| leased to the Northern Pacific. The
reason for the introduction of tempo
rery financial agent was that the options
for the purchase of the roads and prop
critics afterwards consolidated into the
| Chicago and Northern Pacific company
were about to expire, and it was necss-
aary to obtain an advance OF money from
such an sgent iR order to insure them.
The minutes OF the meeting oil the Or
egon Tranecontilentsl directors for JAM
uary 10, 1890, showing these facts, wer Q
read in full, They created something of
q sensation, SO they ahowed that the
plan OF leasing the Chicago and Northern
Pacific to tho Northern Pacific wac fully
understood before the formation of the
former company, and that it wss formed
for the purpose of go leasing it. This
had already been denied By the Chicago
and Northern Pacific people. These
| booke of the old Oregon Trsaseontinental
bad never before been seep by counsel
on either side until thu present ipvesti-
cation.
The minutes OF the meeting OF the Or
egoa Trausoontinental committee in
New York January ~, 1890, and May
! rs, 1890, were also read. They recited
! the ysriua steps IN the formation OF the
Chicago and Northern Pacific, and gave
lirts Of the property held by thss COM
pany etter iEa formation. Throughout,
| the minutes showed that every step in
tbs formation eli the Chicago Snd
Northern Pacific wsa taken with the
advice and instruction OF Lhe Northern
Pacific. and With the intention OF leasing
tho Chicago and Northern Pacific 10 the
Northern Pacific through this Wisconsin
! Central.
The $40. 100000 OF bonds of the
! Chicago and Northern Pacific wore sold
at 80 per cent and should have brought
in SIS 900, 000, but only about 50 GOO
O0O appeared on the books OF the
Oregon Transcontinental az having
been received, and there WGs nothing to
show isor which puYchaeero this had
come.
..Mr. Edep," aaid Mr.. Pettit, on the
list OF subscribars to these bonds, find
q subscription of over $4,000. eco By the
Deutaeher BANK. l. H. 8. Stearn, Henry
Willard and associG,es. Wac this sub-
ecription ever paid?"
II don't know" replied Edes. 81
suppose it formed part OF the lump
credited to the oase."
Have yoa nothing to show it weH
received?'
met here" said Edes. "The chack
book may show"
VERY we'll" replied Petit, there ia
the subscription OF g. L. Colby for HIM
self, Mr.. Rockefeller, Mr.. Hcyt, Mr..
Trsver, Mr.. Abbet aud Mr. Colgase, for
$1,000, 00G. Have you anything 10 show
that this sum was ever paid?"
Nothing" replied witness, "unleas
tho check book does 80"
But, my dear air." said Petit, 'you
did not receive millions without making
record where they came from ?"
well, they came from Subscribers to
bonds," said Edes, ''but there ia no re-
cord of separate payment by them"
Some discussion took place over O