The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-09-09
NORTHERN PACIFIC STEAL.
Result of the Receivership
Investigation.
Report of the Master in Chan
Gerry.
He Files q Bulky and yOlumin0us
Document.
Complsts Victory for the Reosivsrs.
Willard Found Guilty OF Making
Unlawful GAins-Oakss
Exoneratsd.
By the Associated Prsss.


MILWAUKEE,. Sept. S.-Master OF
Chancery A. L. Carey filed his report
on the matters referred to him for in
vestig alton in connection with the
Northern Pacific recsivership contest
this afternoon. The report is a bulky
document, covering 1853 closely type
written pages. and contains about Al, 900
words. 1t is complete victory for the
receivers, the master generating
Thomas F. Oakes from every charge pre-
ierred against him, but Henry Willard is
found guilty Of having made unlawful
gains as director OF the Northern Pa.
cihc.
A synopsis OF the masters report,
showing the various findings, follows:
First--The master finds that Thomas
F. Cakes had no pecuniary interest in
and derived no personal advantage or
gain in any OF the matters referred for
investigation.
Seoond-The master ENDS that Henry
Willard, director of the Northern Paci-
fic Railroad company, made unlawful
gains by the acquisition Of the railway
oil the Northern Pacific and Manitoba
Bay Railroad company by the Northern
Pacific Railway company. to the extent
OF 1868. 691.7O.
Third--It is found that Mr.. Cakes did
not and was not bound to know that
Mr.. Willard was interested in the North
ern Pacific and Manitoba railway, or
that he was making any unlawful gains
by the acquisition of said railway by
the Northern Pacific company. As a
sequence the master finds that Mr..
Cakes was not bound to take any meas
ure to prevent Mr.. Willard from making
such unlawful gains, or for the protec-
ton of the interest OF the Northern
Pacific Railroad company in respect
thereto.
Fourth-During the four fiscal years
ending June 80, 1898, the Northern Pa
cific company made savings under it's
contract with the Rocky Fork Coal
company, to the amount OF $685.
58l.96, an average of over SAFE. 1000 per
year for each of the four years.
Fifth-The master finds that William
t. Bull, Charles I. Barney, James B.
Hagein and Charles B. Wright, directors
OF the Northern Pacific, were interested
in the Rocky Fork and Cook City Rail-
road company, aud directors of the
Rocky Fork Coal company, and in the
acquisition by the Northern Pacific
Railway company OF the stock OF the
Rocky Fork and Cook City railway, and
in the contract made by the Northern
Pacific with the Rocky Fork Coal
company.
Sixth-The master finds that no d.
rectors OF the Northern Pacific ACQUIRED
lo uFrJlO it1o hy ha rtostt kknk
company OF the Rocky Fork and Cook
City railway, or by the arrangement
made by the Rocky Fork Coal company.
Seventh-The master says he cannot
find as to these subjects of investigation
that Mr.. Oaks was in any respect dis
loyal to his company or its interests.
Eighth-The master finds that the
Chicago terminals cost the original
parties that were interested in them at
the time they were turned over to the
Chicago and Northern Pacific company
$40. 1863, 1882.
Ninth-The master finds that the Ore.
gon Transcontinental company received
SIS, 900, 600 OF bonds Of the Chicago and
Northern Pacific company. and that it
IL possible to trace disposition of all OF
them except three bonds. These bonds
are unaceounted for.
Tenth-On pages 1874 and 1856 the mas
ter states the account with the Oregon
and TranscontineEtal company and
shows that it received from these bonds
| SIS. 667 ,879.S8; that 1t paid out for these
properties and for expenses, etc., S15,-
68l, 0S5.42 leaving balance of $l86,.
| 1886 unaocounted for on the debit
side of their account, that is swelled by
these considerations. The master
charges the company with having paid
81 800, 00U for the station which was in
bond the same as all other items in the
account on cash basis. Reducing
these bonds to cash basis the same as
the otherS, 80 per cent, would increase
the debit eide Of the account $l35, 600
more. Furthermore, he finds that the
| SAL 900 of bonds than were delivered to
Baxter. treasurer, for the purpose OF
| finishing the station, should have been
| charged up and would increase the
debit side of the account to the cash
value of those bonds at 80 cents, $44, 600.
The testimony shows that they had
paid only in oash $3.50, 900 in the pur~
chase OF the station. The master finds
that there are $409. 900 of the bonds that
were delivered to Willard upon Mr..
Wells order, but are entirely mac
counted for. except that they were re-
ceipted for by Mr.. Willard, through COL
gate Hoyt. The Oregon and Trgnscon.
tinental company, in all its transactions
relating to the acquisition OF the several
Chicago terminal properties. acted as
the agent for parties In interest, who
ever they may have been. This is in.
Dictated by the agreements OF January,
1890, with the Wisconsin Central COM
pany, as shown by the records of these
transactions.
Considerable testimony was given,
tending to show the disposition made
by the Oregon and Transcontinental
company of the moneys it had received
on account OF these properties, but the
master says he shall not attempt to
further trace such moneys or look into
the accounts OF the Oregon and Trans-
continental company, as be has reached
the conclusion that for the purpose OF
this Investigation, it Ia immaterial
whether such moneys were sent or
who received them, for reasons which
he then stated.
MeBsrs. Colby and Hoyt were the only
members OF the Northern Pacific board
during the year 1889 and 80, in which
the transactions under review took place
that apparently had any direct interest
in the Chicago Terminal They &C.
CURED such interest long prior to the
tins when they became members OF the
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