The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-09-09
CAKES NOT GUILTY.
Willard Made Money Wrong
fully OFF Northern Pacific.
OTHER DIRECTORS sLAMELEss.
Espers Of the Investigation Inss the
sale OF Eaflread Property 90 y.
r. By omeers Of the Latter.

EaC2AE Tecelfer5EiD co1tcss ms aaAcEHoSAA-
The report 10 q bulky document Of l53
closely typewritten pages. and contains
about Is 90 words. Ii is .. complete VIC
tory for the receivers. the master exoner-
sting Thomas F. 0akes from every charge
preferred against him. but Henry Willard
is found guilty Of having made unlawful
gains as director Of the Northern Pacific
Railroad Company. A synopsis of the
masters report showing the various ind
ings IS follows:
FIrst-The master finds that Thomas II.
Cakes had no pecuniary interest IN and
derived no personai advantage or gain
from any OF the matters referred for inves-
tlgation.
second-The master finds that Henry
Willard. director OF the Northern Pacific
Railroad Company, made unlawful gains
By the acquisition of the railway OF the
Northern Pacific & Manitoba Bay railroad
Company by the Northern Pacific Rail-
road Company to the extent of 1856. 69i.
Third-It is found that Mr.. Cakes did
not and Was not bound 70 know that Mr..
Willard was interested IN the Northern
Pacific Il Manitoba railway, or that he
was making any unlawful gains by the
acquisition Of said railway BIZ the North
ern Pacific. AS 8 consequence, the mas
ter finds that Dir. Cakes was not bound to
r.
from making such unlawful gains, nor
for the protection of the interests of the
Northern Pacific company in respect
thereto.
Fourth-During the four fiscal years
ending June 30 1898, the Northern Pacific
company made savings under its contract
with the Rocky Fork Coal Company to the
amount of 81, S93. 5sL96 an average of over
$475. 900 per year for each OF the four years.
Fifth-The master tnds that William L.
Bull. Charles T. Barney. James b. Hag-
gin and Charles b. Wright, directors Of
the Northern Pacific Railroad Com Dany
were interested in the Rocky Fork & Cook
City railway and directors of the Rocky
Fork Coal Company, and in the acquisl-
ton by the Northern Pacific Railway
Company of the stock of the Rocky Fork
made by the Northern Pacific with the
Rocky Fork Coal Company.
Sixth-Ihe master finds that no di-
rectors OF the Northern Pacific acquired
unlawful gains by the acquisition by that
company of the Rocky Fork Il Cook City
railway. nor by the arrangements made
with the Rocky Fork Coal Company.
Seventh-The master says he cannot
find as to these subjects of investigation
that Mr.. Cakes was In any respect disloy al
TO his company or its interests.
Eighth-The master finds that the Chi
cage terminus cost the original parties
that were interested in them at the time
they were turned over to the Chicago d
Northern Pacific company $40 30, 1883
Ninth-The master finds that the Oregon
a Transcontinentai company received
SIS 900 900 of the bonds of the Chicago Il
Northern Pacitic company, and that it IS
possible to trace the disposition of sll of
them except three bonds. These bonds
are unaccounted for.
states the account with the Oregon Il
Transcontinental Company. and shows
that il received from these bonds SIS, SCI, :
$40. 80; that IL paid out for these properties
and for expenses, etc, SIS. 6S1. 0S5. AZ, leav-
ing balance of $lS6, 1885 unaccoanted
for on the debit side of their account. That
is sweiled by these considerations: The
master charges the company with having
paid 81, So. 900 for the station, which was
IN bonds the same Is other items in the
account on cash basis; reducing these
bonds TO a cash basis the same as the
others. 90 per cent, that would increase
the debit side OF the acco1nt $135 goo more.
Furthermore. he finds that the SI4l, 900 OF
bonds that were delivered to Baxter
station, should have been charged up,
and would increase the debit
side Of the account to the cash value
of these bonds, at 80 cents. 10000. The
testimony shows that they had paid
only in cash $3.50, 900 in the purchase of
the station. The master finds that there
are S409. 900 Of the bonds that were deliv-
cred to Willard upon Mr.. Woods order,
but as entirely unaccounted for except
that they were receipted for Mr.. Willard,
through Colgate Hoyt. The Oregon and
Transcontinental Company. in all its
transactions relating to the &C
QUESTION of the several Chicago
terminal properties, acted as the agent
Tor the real parties in int rest
dlcated by the agreements OF January,
1880, with the Wisconsin Central, as shown
| by the records of these transactions. Con-
| siderable testimony was given tending TO
show the disposition made by the Oregon
| & TFansoontinental company of the
moneys II 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 x Transcontinentai company as
| ne has reached the conclusion that for tn
| purposes OF this investigation il Is imma-
terial whether such moneys were sent or
| who received them, for reasons which be
/ then states. Messrs. Colby and Howl
4 were the only members of the Northern
/ Pacific board during the years 1889 and
/ lso. In which the transactions
under Eeview took place. that appAr-
/ entity had any direct interest in
/ the Chicago terminal. They acquired
1 such interest long prior 10 the time when
they became members OF the Northern
| Pacific board. and at a time when they
| owed no duties 10 the Northern Pacific
| Company. The Northern Pacific Company
1 did not furnish these bonds, and was in
/ no degree liable for them. IL is true that
I by its lease of April. 1870. with the Wis.
oonsin Central system it had assumed ali
4 the covenants and agreements by the Wis.
I cousin Central Company. and the Wiseon-
+ sin Central Company with its Ter.
/ mInsis. and thereby have agreed 10
4 pay the same 30 the Northern Pacific
/ IN addition TO the liked annual rental q,
/ $50 900. sufficient sum 10 nav any de.
/ aetency GA the FIRST mortgage bonds OF the
/ Northern faclue company, the bond.
ia question not derived from other
/ rentals. There was not direct
/ promise 10 pay the interest due on
/ this. aad hence no right 81 action upon
I the covenants or agreements existed
/ against the company. The agreements ol
4 the Northern Paelhe Railway Company 70
/ pay guarantee a. rental, sufficient TO pay
/ the interest on these bonds wss of thar
/ character and was made only with such
purpose that il could II any time be can.
/ celled By the mutual consent OF the two
! companies. and the holders Of bonds
/ wUuld be p0Werless 70 prevent such can
/ collation.. Further. there was no agree
/ neat shaieveT on the part of the North
/ err fscEne railway 10 PAY or provide any
/ funds for the payment Of rentals or for
/ The payment 81 these bonds. liz cannot.
therefore. be said that the Northern Pacific
| railway has paid any interest on the
/ eunas that have come into the hands
/ Of the oreEon & TranscontinenGal com
/ paBv. III this were a salt or proceeding
{ on the part Of the Northern Pacific railway
A. -.