The morning call., 1894-11-02
FINANCE AS AN ART.
How the Gulf Road Was
Plundered.
The Union Pacific Profited Largely
by the Consolidation of the
Systems.

DENVER, Nov. 1.-Ex-Governor Evans
sprang a sensation in the foreclosure pro-
eeedings agrius the Gulf road III tbs
United States District Court yesterday
by filing a counter petition alleging that
the bonds were fraudulent.
Attorney Hyde, representing the
American Loan and Trust Company, said
the bonds. with the unpaid interest,
amounted to $15, 900, 900, and asked that
Frank Trumbull, the present receiver, and
f. Ellery Anderson, be named as receivers.
Ex-Governor Evans alleged that the
Union Pacific issued bonds for twice the
| amount agreed upon before the consolida-
tion, and that S11.O0o.000 of these bonds
is based merely Oh the right of way over
the Denver and Rio Grande between
Pueblo and Trinidad secured to the Gulf
road by lease.
Ex-Governor Evans declares that while
the stockholders Of the Gulf Railway
agreed before the consolidation TO an issue
of $4,000 bonds on each mile of single
track and S35,O00 on each mile OF double
track. the Union Pacific management
actually issued bonds for double that
amount. The Union Pacific is also ac-
eused of issuing bonds under the coz
d
way in New Mexico which the Union Pa
clfic owned before the consolidation.
Ii is also alleged that the $26l7, 900 in
bonds were put forth by the Union Pacific
officials in exchange for 81, 254, 600 Of the
bonds of the Cheyenne Northern Railway :;
s629,000 was exchanged for S226, 600 of the
bonds of the Denver, Marshall and Boul-
der Railway; 81, 307, 600 for 1881, 900 Of the
bonds of the Greeley, Salt Lake and Pa
cfic Railway; SIT. 600 for 1927 0O0 of the
bonds Of the Georgetown and Breckin-
ridge Railway, all of which passed into the
treasury Of the Union Pacific Railway
Company. The petition states that these
bonds were of little value, and that to
place fictitious value upon them was in
violation of the laws of the State.
The petition relates that the Union
Pacific, by the deal, was enabled to con-
| sirGct its Oregon Short Line. Drexel,
Morgan 81 Co. come in for a share of the
blame. The complainant alleges that the
| Union Pacific management caused the
| property of the Gulf absorbed by the
consolidation to be destroyed and dis
persed. alienated and sold without suf-
| fcient consideration TO the Gulf corpora
tions. The shops were dismantled and
| the machinery removed, and shops were
erected in other places where the title was
vested in Union Pacific officials, in def
ance Of law and former agreements. The
| principal Offices and books were removed
| from Colorado and the principal offices of
the consolidation kept in Boston. in con-
! 1ict with the agreement between the cor
| porations consolidating.
| All this was done, it is charged, in pur-
| suance Of conspiracy to destroy the
| Gulf road as a competitor of the Union
| Pacific for the Atlantic coast trade. The
| Union Pacific officials are accused of con-
nIying with the trust company for the
| foreclosure. In the matter of furnishing
| improved security to the Government for
the Union Pacific. the petition says the
Gulf is in no way indebted to the Govern
ment and should not submit to having its
| interests sacrificed.
Late in the afternoon the court decided
to consolidate the Evans case with the fore
closure suit, and extended the appoint
ment of Trumbull, previously made in the
Evans case. to cover the foreclosure suit.
The application for E. Ellery Anderson's
appointment was denied.