The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-08-08

a
bond and 20 give 10 q consoii6ated mort
gage bonGhoider a u. per cent bend IN
stead Of 5 per cent. bond That IS 10
say. they offer 10 give for sl.vo Dond
so bond bearing > per cent interest ana
aIzo three shares Of stock.
This rs az far az the plan has ever been
published bat in itself IL shows that the
Adams committee has yictimized the in
ferests OF its constituents in agreeing TO
subject the bondholders. whom II pro-
fesses TO represent. to ruinous sacTifice
'sTha remainder of the scheme can be
figured out from that which is published.
Just as IN arithmetic the unknown guam
THY can be ascertained by the rule OF
three. II Is stated that the stock of the
proposed new Great Northern sub-com-
pany shall be 500. 90 90. of which Mr Hill
is TO have s5i.eoo.es. leaving So. 100. 90 TO
he disposed of. out Of this, the third
mortgage bondholders are to get three
shares for each 1900 bond That will
take about sf3.ao0.oo more. and will leave
about S3s.n0.e go TO be distributed among
the holders of So noa 90 OF the present
stock. The unfortunate stockholders will
therefore get for three shares OF the pres
ent stock. and 80 in money. one share of
new stock. which viii have no influence
I'm operating the road. as the majority OF
stock will be permanently in the hands
OF the Great Northern, and which will
have no value except as the Great North
ern may permit the Northern Pacific TO
get A share of the traffic. For every dol
lar earned by the Northern Pacific under
the proposed scheme Mr.. Hill would re-
celve 81 cents. while for every dollar earn
Cd by the Great Northern he would re-
ceive 10 cents. There is little question
that under such conditions The Great
Northern would carry the bulk of the
traffic.
The directors of the company feel that
this scheme can never he carried out. but
TO insure its defeat they are now Under
taking 10 have the management taken
ont of the hands OF the receivers. through
whose control alone it's contamination can
be- rendered possible. We believe that
when the court is informed Of the fact
that its jurisdiction In this case is origi-
nal. and not ancillary merely. il will APP
point receivers who VIII account 10 IL for
their action, who will conserve the prop
crty for the benefit OF all i'm interest and
who will not make themselves parties 70
q conspiracy TO destroy the security
holders of the company and turn the
property over to its competitor"
What President Ives Claims.
In hts affidavit President Ives says the
appointment of the receivers was made
by Judge Hanford as though ancillary to
the appointment of the receivers OF the
property made by the circuit court of the
eastern district Of Wisconsin He believes
that the local court did not exercise it's in
dependent judgment. He alleges that no
part of the railroad or land grant of the
Northern Pacific was or ever has been sit
uated within the eastern district of Wis
consin. and that at the time of the APP
pointment the circuit court Of the eastern
district of Wisconsin had no jurisdiction.
Ives is informed that no decree made by
the Wisconsin court with respect to the
control and management of the Northern
a.. Al l.
ried into effect within that district The
affidavit states that the order appointing
tho receivers directed them TO pay out OF
the money which should come into their
hands from the operation of the railroad
current expenses. amounts due for inter-
change of traffic. supplies and materials
used. wages and rental of rolling stock.
and with the sanction of the court such
amounts as might be necessary for the
protection of the road. The receivers were
TO hold any money not so used until au-
thorized to dispose of ID by decree of court.
Ives alleges that the receivers have not
complied with the terms of the order. but
have deposited the moneys received by
them in banks other than those authorized
by the court. and have applied the same
to the payment of debts alleged to exist
against the company other than those
contemplated by the order. The receivers.
he SAYS. have failed to make any account
Ing of the disposition made by them OF
property and moneys which came into
their possession.
Says Funds Were Misapplied.
Ives charges further that the receivers
have misapplied large sums received from
sales of public lands and other properly.
and from the operation of the road. by ap-
propriating the same TO the payment of
debts not entitled TO be paid in preference
to the interest and principal due under
the mortgages Between August. 1893. and
November. 1894. they are alleged to have
paid unnecessarily claims amounting to
sl.i22 .06. alleged 10 have risen under n
lease between the Northern Pacific and
the Wisconsin Central Company and the
Wisconsin Central Railroad Company: al
so other claims amounting 10 s263, 1868
The receivers arc said to have paid 81 600
toward the purchase of a $500 judgment
recovered nv Louis DANIEL i'm the Cook
county circuit court against the Chicago
& Northern Pacific Railroad Company.
when in fact the Judgment was not lien
against the company and of no value
whatever. Having purchased the judg-
ment they are alleged TO have procured
Daneli 10 file an intervening petition in a
suit brought 10 foreclose a mortgage
against the Chicago & Northern Pacific
Railroad Company In which petition Dan
ell is said to have represented himself as
owner of the Judgment for the purpose of
sustaining an objection to the validity of
the mortgage. which act the receivers
could not do as contrary 10 good morals
and good faith.
The receivers. II Is alleged have. with
out authority. unlawfully expended in the
states Of Montana and Oregon money
coming into their possession for purposes
entirely unnecessary.
Did Not Prosecute Willard.
Ives asserts that the Northern Pacific
has claim against Henry Willard for
s5tS s3s.iZ. arising out Of n sale made nv
him 10 the company when chairman of
the board Of directors Of stock of the
Northern Pacific & Manitoba Railway
Company, I'm violation Of his duty and in
fraud OF the company: further. he saws
the Northern Pacific has a claim against
Willard for az least SG24N0. arising from
a similar sale OF stock OF the Rocky Fork
a Cooke City Railroad COMPANY. Thera
Is stu another claim Of g. GO n0o alleged IN
he due from Willard. Charles l. Colby and
Colgate Hcvt. all of them directors.
In July. ISs5. the affidavit goes on. the
company was insolvent. and Willard
knowing that Of necessity receivers would
soon have TO he appointed and with the
intent of controlling the suit and OF nam,
ing the receiver or receivers. directed
William Nelson Cromwell. a New York
attorney. his personal counsel TO pret,s 70
bin In equity alleging the insolvency and
praying the appointment OF the receiver
II was the agreement. the affidavit states.
that Henry c. Payne. who. with Cromwell
and Charles y. Spoff0rd Was An officer ~
tho Milwaukee street railways. then man
aged and controlled by Willard shouIa ~
appointed receiver. The hill Is said 10
have been prepared. but was objected 10
by Thomas F. oakes. then president Of
the company. whose consent was necaS-
sarV Afterwards 81 is ,,,o..a,..