The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1895-08-31
THE GREAT. NORTHERN.
Stockholder Pearsall Brings a Suit for
Injunction.

The expected has happened. stock
holder of the Great Northern Railway
Company has filed an injunction suit
against that company to restrain the
company from carrying out President
Hills plan of guaranteeing the North
ern Pacific reorganization scheme. In
commenting upon the matter the Pioneer
Press under date of the Gath says:
There was filed in the United States
circuit court yesterday afternoon a bill
In equity by Thomas w. Pearsall, of
New York, against the Great Northern
Railway company. A copy of the bill
was served upon Col. w. p. Clough, vice
president of the Great Northern, yester-
day. While the nominal purpose of the
suit thus entered is to prevent the con-
summation of the proposed scheme of CO.
operation between the Great Northern
and the Northern Pacific, it is not
thought that the suit is brought with
what might be called malicious intent
The officers of the Great Northern have
been expecting such a suit to be brought
in New York or st. Paul for some time.
1t is said that the action is rather well
coined than deprecated by them, as it
win bring to speedy settlement all the
legal questions involved in the plan pro-
posed, and this Is something of which
all the parties in interest are extremely
desirous. The bill in substance sets out
the existence of the Great Northern Rail-
way and the various statutes of the
state of Minnesota, the original, act of in
corporation being that of March 1, 1856,
and the construction of various lines of
road under that charter. 1t also sets out
the lease of the various lines of the
Manitoba Railroad Company in Mime
sofa and the DaRotas to the Great Nor
thern railway for a period of 999 years
This lease was executed in 1890. The bill
describes these various lines at great
length. 1t alleges the incorporation OF
the Northern Pacific Railway Company,
and describes at length the number OF
lines owned and operated by it, its cap
italization and bonded debt, its insolven-
cy and appointment of receivers of that
company The bill charges that the
Great Northern and the holders of a
majority of several classes of outstand-
ing bonds secured by the second, third
and consolidated mortgages of the Nor
thern Pacific Railroad Company have en-
tered into an arrangement or agreement
stated to be as follows:
1.-THE holders of the said several classes
of bonds shall cause each of the said
mortgages to be foreclosed and the rail-
roads and other property and franchises
of the Northern Pacific railroad, includ-
ing its franchises of Incorporation, to be
sold at foreclosure sale, subject to the
division and first mortgage bonds, and
shall cause the same to be purchased and
bid in by a committee of bondholders for
the benefit of the several holders of the
outstanding bonds secured by the mort
cages so foreclosed, and shall cause a re-
organization of such new corporation
under various acts of congress relating
to the Northern Pacific Company This
being done, the reorganized company
shall issue its bonds in the aggregate
amount of over $100,0O0O 900 and its full
paid capital stock of &O0, 900, 900, and shall
enter into a traffic contract whereby the
two companies shall divide tine common
earnings on the basis of business done
on the systems respectively, and in con-
sideration of such traffic contract the
Great Northern shall guarantee the hold
ers of said bonds so to be issued to it
by said reorganization company the net
income of the latter company, which
shall not fall below the sum of 10000, 900,
and to execute upon each of said bonds
a aggregate amount as compensation sor
the risk from loss by the stockholders
of the Great Northern, which said guar
antee might produce by diversion of por-
tions of its earnings. Such company
shall transfer to the shareholders of the
Great Northern or to some person or
for their use haH of the cap
ital stock of the reorganized company,
but asserts that the acts of the legis-
lature of the state of Minnesota do not
confer upon the Great Northern such
right, and that the same is prohibited by
the general laws of the state.
''The relief sought is that the Great
Northern shall be restrained from en-
tering into and carrying out such ar
or agreement. The complain |
ant, Mr.. Pearsall, makes the complaint |
as stock holder in the Great Northern, |
alleging that he has been for more than
one year last past the owner of more
than five hundred fully paid up shares. |
the shares being for 800 each.
1.-The theory of the bill is, that he as
such stockholder. and others similarly !
win be injured so far as the |
value OF their stock is concerned by the
proposed arrangement The complainant |
has also served motion papers for an
Injunction pending the litigation before
Judge Sanborn, to be heard Wednesday |
August 18th.
Davis. Kellogg & Severance and John
B. and f. p. Sanborn have been retain
I'd by the Great Northern Company, and
all that can be ascertained from them
them Is that 1t Is their opinion that the
territorial legislation of 1866 and the acts
thereof confer upon the
Great Northern the power to enter into
he arrangement complained of by Mr..
Pearsan. Mr.. Henry ]. Horn appears
or Mr.. Harry Pearsall.
President Hih has not reached home
Tet. Col Clough declined to be intervened
n regard 10 the matter"
Thos. w. Pearsall. the complainant.
axes the ground that present stock
holders OF the Great Northern win be in
ured by the assumption OF this addi-
ional obligation and this action may be