The morning call., 1894-01-07
THE ALTA MINE.
Result of an Expert's
Investigations.
VERY BAD ACKNOWLEDGMENT.
Suit Will Now Be Brought for
Recovery.
VERY BAD ACKNOWLEDGMENT
SEVERAL BOARDS RESPONSIBLE
Stockholders Suffer Through Ex-
travagance-A Fraudulent Lease
and Milling Operations.

No one who knows anything about the
stock exchange needs to be told that the
affairs of tle Alta Mining Company have
not been conducted upon correct business
principles and that economy has not been
the watchword of the management. Nor
will il be startling news for well-informed
mining men TO hear that some Of the
financial transactions of old boards have
swerved from the straight path of recti-
tude.
Still papers have been prepared for
suit which will be brought this week that
abound In disclosures of mismanagemeut
through which it will be charged that the
officers lined their pockets at the expense
of stockholders. 1t is a suit Instituted by
certain shareholders against Charles
Derby and five boards of directors for an
accounting.
George Il. B. Hayes of the law firm of
Stanly, Hayes, McEnerney & Bradley has
drawn up the complaint, which is based
on a report made by George w. REYNOLDS,
expert lie was engaged for this duty by
the new president, John Landers, and his
cO-dlrectOrs.
For years and up to the time of his death
Seth Cook centered in himself the entire
management of the Alta mining property,
aided by his lieutenant Charles Derby.
Concerning Cooks conduct with reference
to The mine, Mr.. Hayes said last night to
! CALL reporter:
| reynolds report shows that Cook was
indebted to the company $4,000 for mon
eys which he drew and charged up 10
himself. so lax was the management OF
the company afterward that 70 claim for
this sum was presented against his estate,
which was valuable. The estate is now
| settled up and divided among the heirs, so
that this sum IL hOpeessly lost.
The sum taken from the company in
coin, rs shown by the experts report, Will
probably reach $500, 600 This does not
include losses by fraudulent lease. high
salaries were paid out of all proportion To
the la Dor performed and entirely unauthor-
lied by the bylaws.
Cook and his associates organized
among themselves a milling and mining
company and as officers of the Alta Com
pany leased the mine 10 the new CORPORA
ton Tor nominal sum. 1t was a very
close corporation. Cook let some of his
directors into it without their knowledge.
One director, whom | can name, when
he was rendered the first dividend from
the new enterprise, remarked, L own no
stock IN that company and This money
isn't mine He was told to take the divi-
dend and say no more about it. lie
ObeYed orders. Until some of the men
who came in for share of the profits are
placed on the WltneSS-Stand the amount
thus diverted from the niue cam OF be
known.
Then there is big shortage in the bull
/ lion output. The books of the company
show that the shipments from the mine
were largely in excess of the amount re-
ceived anu accounted for by the San Fran
cisco office.
Derby succeeded Cook as general
manager of the concern, and by some
| 'hocus- pocus' transferred the $4,000 in
| debtedness TO himself. This he increased
to $4,000"
Answering an inquiry as 10 the prob
ability of the stock holders being able To
recover any considerable part Of the funds
and bullion, Mr.. Hayes said it was SLIM
Derby has ranch in Nevada, but it is
Incumbered by mortgage.
Still he may have slowed some money
away" remarked the lawyer, (which the
company could get hold of. The directors
are individually responsible for the losses,
whether they we're sparticips criminis or
only guilty of gross negligence. There
VIII be no trouble in proving that they
we're guilty at least of the last charge.
The estate If Cook now being free from
attack, | question whether the combined
possessions of four or five boards of
directors will suffice to make good the
actual losses 10 stockholders by misman-
agement and worse even ii Judgment can
be obtained against them