The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-06-06
FRAUDS By SCHULTZ.
uoU He Manipulated Tacoma
Railway and Motor Co.
EDITION BY PHIL ARMOUR.
- s~.r~. as q stockhoIder, to Defend
the Foreclosure suit Against
the Company.

.r,a June s-S9eciaL-A petition al
- fraudulent transactions on a man.
49, s~ala on the part % the late Paul
- E. as president Of the Tacoma Rail-
800 Motor Company. has been filed IN
=. rated states circuit court BY solicit
- for 2. D. Armour. r., ana j. o. Ar
- AZ chicago, in the foreclosure suit
a. tne Ns~ YORK Guaranty ana lnaen--
~. cosnoany. trustee. VS.. the Tacoma
..g-.v and Motor Company and Edna
.~-sse,l TIE petitioners ask for an Or
-. admitting them into court as parties
sssArdaut IN the suit
-rbev aIsge that each OF them owns so
.ssyas Of the motor company stock: that
.sa mortgage and bonds for $3.50 $50
rAseh the New York company seeks 10
s.-.rloss vere executed and delivered by
.se motor company pursuant 10 an agree
yaeat entered into between so-called
syndicate. represented by II. J.. Achilles
80 z " Costello. and the motor COM
,env the terms and conditions OF which
xsys as follows. That the motor CON-
nany was to create a mortgage OF 81. 5D0.-
sD and issue IL so 81 60 bonds; $4,000 Of
houds were 70 remain in the treasury for
fsiure extensions and betterments, to be
,sss,ed only as such betterments we're
made. sa1eDD face value OF the bonds
we're to be delivered TO the syndicate az
the rate OF 80 cents on the dollar, the syn
6lcafe TO receive In addition a bonus Of
nafss shares OF stock. the motor COM
pany as a condition was TO purchase the
Tacoma & Steilacoom railway for S551-
o. tfaso payable in bonds and s5oooo
ia stock. that the Northwestern Thorn
son-Housion Electric Company should re-
mace the motors Of the Steilacoom rail-
say With others Of the latest design. 20
furnish new trucks for nine cars. and pay
The cost OF rebuilding the cars then in
use. also that the electric company should
baid AZ It's own cost, as a part of said
railway, spur line from a point near
the center of section 10, in Pierce county.
ons and three-fourth miles in length, 10
s5me point on Puget sound: that the cleo
ire company should exchange three So
horsepower generators. in use on the
road, for one 370-horse-power generator.
the motor company TO pay the difference
"a cost. amounting to g. 7s7. the electric
company was also TO take back the steam
engine used by the Steilacoom road and
allow the Tacoma Railway and Motor
Company therefor the sum Of $3.50.
Is alleged that the said agreement
And The bonds and moTv gage executed
pursuant 70 e were and are fraudulent
2Ds VOID and ineffective to charge tho
railway and motor company. because Of
ne following alleged facts: (a) The
szreeneDt with the so-callesi syndicate
vas entered into pursuant to a frat,sill-
In and corrupt conspiracy and agree
nsnt between Paul Schulze, president OF
fae motor company. and the officers and
agents Of the Northwestern Thomson
Houston Electric COrnpany for the benefit
O. Tie iasi-n1lIDed company, and TO enable
90 acquire the neE0ftable bonds OF the
motor company for much less than their
sctlal value. that the sad Achilles and
'osieIio ~ers nos the agents or represen-
tatiyes q any syndicate out We're mere
ngsfeaeads. not representing any one.
ard permitted SchuIze 10 use their names
e tlat CONGESTION as "A friendly act 10
hsai. and the said dealings we're wholly
With Schulze himself. all ef which was
ezkS9sn - the motor cognpany's da-ec-
tgS except Schulze himself: Schulz, II
alleged. further repre- ed to the III
rsSors Of the motor company that its
faaHaaI condition was desperate and
ia& the acceptance OF the sSn.iicate's
opposition Was necessary to save the
company from bahkrTptcys that these
presentations were false. because the
sea- Sas not essential 20 save the com
pAny from bankruptcy. that the Tacoma
s'eslacoom railway was not worth
AsRN" or any slIn whatever IN excess OF
t3aa, thai the proposition was not an
s0Han'aseytis on for the raj way and mo-
fof company. but In fax amounted 10 a
safshee Of the cogupauy's bonds for aOout
- cents on the dollar 81 thedr face value.
ard amounted 80 giving the Northwestern
If9nsoD- Houston Electro Company "A
hrnis 81 the motor company's stock 10
TIE amount Of s1il,eeo
t0l 1, Is alleged thar the debt thus Gre
sied exceala3 The Indebtedness permitted
by me b9 laws % the motor company.
saa mat the total Indebtedness author
zei BY the bylaws was only si.151.co0:
maj IN pursuance Of the agreement 81 nc-
sNi0is isSue Of stock TO the extent Of
siiiso was made. and bonds 10 the
amount 81 $L2-o.W9 wcN execwed, both
bonds sad stock being delivered 10 the
@orihNsoteca ThomSon-tIoustDn Fec
" company and the meteor company re-
stlNf9 therefor in money or property
etly about the sum o.f $4,000: chat she
saa transaction constituted "A fraud on
ne constitution ana laws OF the state Of
harrington. and Csl At she bonds and
sochS ISSUED pursuant thereto We're and
tfe absolutely void and Of no effect. and
.sh<ute 11o valid Charge against the
Tacoma Railway * Motor Company.
lie bonds and stocks. II is alleged. are
hsiA or owned either by the Northwest
ern Ihomsou-H0uston Electric Company
% the General Electric Company. with
Naleh he former company has been con-
sehd9'ei. bat a portion OF the bonds
1Ate heeu alcagei ny the companies As
N''4attf4i security FOR loan or loans Of
money made them; that the motor COM
fSAy is entitled - an equitable offsc, 10
taf amount OF the stock bonus. Slsl. 90.
ssainsi recovery on the bonds now held
" the said companies.
Neither re syndicate nor the North
western Thomson Houston Electric Com
lahE x IS alleged. has compiled with the
'sns and conditions of the agreement
N'Hsefhirg exchanges Of machinery. re-
"a ot cars and building az additional