The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-08-23

ana Virginia Company deprived the stock
holders of large profits by contract under
which the ores were handled. This was a
contract with Senator John P. Jones, who
worked the upper levels and caused the
ores to be milled by the Comstock Milling
Company, which plaintiff believes was
controlled by Mackay Flood and Jones.
Mr.. Mackay was in court yesterday, and
he modestly sat in the corner furthest from
the witness-stand, upon which attention
generally was conferred. Other defendants
of the Consolidated California and Virginia
Mining Company; Secretary A. w.
Ravens, George r. Wells and Cornelius
O'Connor These were represented by
Attorneys Deal, Tauszky and Wells, and
the plaintiffs side of the case was con-
Quoted by H. G.. Sieberst.
AS was stated at the opening of the case,
Mr.. Fox expects to prove that John W.
Mackay, Senator J. P. Jones and j. c:
Flood controlled a majority of the capital
stock of the Consolidated California and
Virginia Mining Company; that they en-
tered into contract with the Comstoe'
Mill and Mining Company to mill the oic
of the corporation first named at 81 ton,
and that a large amount of ore was milled
under the contract. A fair price for the
milling of the ore would have been 81 a
ton, it is stated, but Mr.. Fox holds that by
fraud in the contract the stockholders
were overcharged to the amount of 81, 49,
900.
The defendants declare that Fox has no
standing in court, for the reason that he IS
not a stakeholder. They say that Fox
made a demand for an investigation before
the suit was begun, and that the directors
appointed day for the investigation, but
that Fox did not appear.
The first of the testimony in the case
was from the deposition of Senator Jones'
The witness said in this deposition that he
knew in a general way about his interest in
the Comstock Mill and Mining Company,
but he was unable to say whether stock
had ever been issued to him. He owned
about one-third of the property of the
company, while Mackay and Flood owned
two thirds.
He could not name the offices of the
company, but he thought that his nephew,
II. NJ. Gorham, was secretary He testi-
fed that he knew nothing of the profits of
the company. His interest was purely
financial, as he had never taken an active
part in the conduct of its affairs. Some
years ago the witness owned the Eureka
and Morgan mills, which were subse-
quently acquired by the Mill and Mining
Company. Mackay also owned an inter
est in those mills. He was unable to state
how the title passed to the Comstock Mill
and Mining Company.
In 1885 or 1886, continued Senator Jones,
the idea occurred to him of reopening the
Consolidated Virginia mine, which had
been abandoned and was then a wreck
Senator Fair had declared that there was
no ore in this mine.
The superintendent and foreman agreed
with Fair and friends declared he was
crazy to undertake the venture. Mackay
had no faith in the plan. In the face of
this advice Jones investigated, and found
that SIS, 600 would be necessary to retimper
the mine and that an expenditure of $780,
600 would be entailed before car of pay
ing ore could be hoisted to the surface
Nevertheless, he went to the directors of
the Consolidated Virginia mine to get a
contract and finally secured an agreement
upon which he was able to reopen the
mine.
The mining company agreed to pay SO a
ton for the milling of the ore, while Jones
was to pay all expenses, including Sutro
Tunnel charges, and guarantee the com
pany return of so cents on every ton. At
that time the stock of the mining company
was worth about 10 cents share. Pur-
suant to the contract he expended between
100000 and $125, 900, and developed fine
body OF ore, after which he surrendered
his contract. 1t was after the surrender
ing OF this contract that the Comstock
Mill and Mining Company was incor-
porated. Then the contract with the min
ing company to mill ore at $7a ton was
made.
Senator Jones declared that no attempt
had ever been made to defraud the stock
holders OF the mining company.
The next witness was Secretary Ravens,