The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-06-30
ATTACK ON THE BONDS
Attempt to Wipe Out Junior
Securities of the n. P.
REORGANIZATION OF THE ROAD.
Mcknight Thinks Only First Mortgage
Bonds Good-Iieavy Assessments
Are Expected.

Wall street quotations of Northern Pa
ciffc securities have been seriously af-
ected says the St. Paul Pioneer Press,
by news that holders of preferred stock
cont template a suit to have declared ille-
gal nearly half the securities of the road.
The suit contemplated is based on
clause of the original charter OF the road
granted by the United States government
IN 1854 which forbade the issue OF any but
first mortgage bonds. The company
under this charter issued first mortgage
bonds, which are known as Jay Cooks
bonds In 1856 The mortgage was fore
closed and the road was reorganized- Tho
then existing first mortgage bonds were
converted into present preferred stock.
and new first mortgage bonds were issued.
followed by seconds. thirds, conSols and
other bonds with which the road was III
timately loaded down.
The claim Is that the company acquired
no additional rights or privileges In the
reorganization OF 1915 which would per-
init the issue of any bonds. II this claim
can he established the only securities that
are legal are the preferrd stock cerSifi-
Gates which alone stand for the original
first mortgage bonds. and such new bonds
as are strictly first mort gage bonds. the
suit to establish this claim is conteIn-
ternplated now because in the proposed
scheme of reorganization holders OF pre-
prevent the reorganization by establish
ing the claim, but they can also put
themselves in control OF the road.
II is thought the reorganization scheme
will soon come 10 a head. as j. Pierpon.
Morgan IS now in New York, having only
recently arrived from Europe. Before
Tulv I in all probability. the scheme viii
no PROMULGATED. Lawyers acting for the
stockholders ere said TO be James Nc
Naught and Henry Stanton, both II
whom were counsel for the Northern Pa
rifc for years including the time when
the bonds were issued. Mr.. McNaughf,
who was in Seattle only las; week. 1t is
Understood, has several canes expressed
fh, opinion that the Bonds were not
LEGALLY ISSUED IN the strict sense OF the
,-ha-+s- He Is said 10 have given his
ea,ufor during the hearing a year ago IN
the attempt "a Gust Receiver Oakes. Nj.
NFc%aught was defending MIR. Cakes and
owing 10 friction with the management
no severed an connection With the COM
Many No man knows more Of the inside
history than he Henry stanton said he
knew nothing about the contemplated
suit.
trying 10 reo-EaniZe the road, as security
holders vii hesitate about coming INTO
tha scheme and VIII doubtless demand 4
fnp ton - the possibilities. But
rr,-s They say that u IS only technical
f.~ror a. the worst, and that no court IN
me land would take the property or 4nno-
csn- security holders on account OF T.
rsa~si4as. they say. the holders OF pre-
serre~s stock have repeatedly recogize'l
tba property rights Of holders OF the So
cl,rftfes IN question ~ voting Win ant-n
A. stockholders meetings
president Jarnes ]. HiA. OF the Great
Northern. when IN New York few days
aro awaited a conference with Mr.. Nor
~an He came representing not only his
w. large interests IN the property. bat
10 many foreign security hoiceTs with
v-ho-a ~, had been IN consultation
s,,...~4arn made a great favorite Of the
1ST,-.nern Pacific al through sts check
sd career. and IS now heavily loaded
v-,~, securities Mr.. HIS interest IN
~.,-xse~, Pacific property Is IN ant1c3pA-
ton Of a lease 81 the property which be
fas been offered The Isl OF securities
a0eotea by these stores IS one Of the
E,aay5~z- attached 20 any great American
railroad system Prices % some or them