Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1896-11-19
TIE vANoALlA SYSTEM.

Hands OF q Receiver Against she Profess
of Interested Parties, Who Claim that
the Suit Is n COlIusIve One and Intended
as - Ereezeout.
INDIANAPOLIS, Ind, Nov. 14.-Judge
Woods OF the United States circuit
court last evening appointed a re-
ceiyer for the Terre Haute 6 Indian
apolis Railway Co., naming as receiver
Volney T. Malott, president of the In.
| dianapolis national bank. The re-
ceiver was appointed upon the suit OF
Mark Il. Cox, James A. Blair and
James w. Paul. Jr., against the COM
pany, and the ground for the receiv-
ership was the admission of the conn
pany in court that it is insolvent.
The Vandalia has been known as one
of the most prosperous roads in the
country, and until year ago, when 1t
passed into the control of the Penn
sylvania company, which purchased
ma jority of its stock, it met its divi-
bends and all charges with the utmost
promptneSS.
During the hearing yesterday Judge
Woods remarked in court upon the pc
culiar tact that all the attorneys
seemed to desire receiver and he did
not make up his mind to appoint one
until last evening. Some of the par
ties interested in securities of the sys-
tenn who were not made parties in in
terest are declaring that the suit is
collusive one for the purpose of freez-
ing them out and selling the system
to the Pennsylvania at low figure.
The plaintiffs in the suit were repre-
sented by John G. Williams, formerly
general manager of the Vandalia sys-
tenn; George Wickersham, of New
York; Samuel Dickinson, of New York,
and Mr.. Golden, of st. Louis. The
defendant company was represented
by S. y. Piclxens, who is also attorney
for the Pennsylvania Co.
The bill sets forth that in 1870 the
defendant company acquired posses
sion of the st. Louis, Vandalia &
Terre Haute railroad, and that in 1892
it took charge of the Terre Haute &
Peoria railroad, entering into con-
tract with it for SO years. Prior to
this latter consolidation-in lss7-the
Terre Haute s. Peoria had, by deed of
trust. conveyed all its property to the
Union Trust Co. of New York, to
secure first mortgage gold coupon
March /, 1927, with interest at five per
cent.
In 1892. while the negotia tions for
consolidation with the Terre Haute Sc
Indianapolis were pending, the Terre
Haute & Peoria authorized the issue
of bonds to the amount of 50, 500, 600,
payable to the Union Trust Co. for
the purpose of improving the road and
| for retiring the first issue of bonds.
The consolidation was affected in Oc-
| tober, 1892, and the bonds were is
sued.
BY the terms of the contract entered
into between the defendant company
and the bondholders it was agreed
| that 80 per cent. of the gross earn
| ings of the Terre Haute & Peoria rail-
road should be devoted to the pay
| ment of the interest on the Terre
Haute s. Peoria bonds, taxes and
rentals, the remainder of the 80 per
GENT. if there be any, should first be
| paid to the Terre Haute 81 Peoria rail-
road. The compliments aver that the
interest has not been paid, though the
30 per cent. of the gross earnings
would have been sufficient to have
paid it. The gross earnings since the
defendant company took possession of
the Terre Haute 81 Peoria have been
as follows:
For the 10 months ending October
| 81, 1893, S449, $50. 80; for the year end
ing October II, 1891. S404, OLA 90; for the
year ending October 81, 1895, $445. 4s3;
October 1885, up to September /, 1896
| (estimated), $40, 600; all of which
money, it is alleged, has been appro-
| priated by the defendant.
| According to the complaint, the to-
! tai amount due on the interest cou-
| pons Septem Der 1, 1896, and which still
remains unpaid, is S55, $50, and con-
| tInues the complaint, your orators
are the owners of S., 900 of said bonds
| secured by the deed of trust of March
| J., 1887, AID of S1,41O.O0O of said bonds,
secured by the deed of trust of Sep
| TENDER 1, 1892, and, as such, there is
due them the principal sum of 35,375,
| together with interest from Septem-
Der, 1856.
The bill recites that the defendant
| company is operating the Terre Haute
! & Logansport railroad, and has agreed
| to pay the interest and principal on
| 81, 500. 600 of it's bonds, that it is opera
| ting the Terre Haute Sc Indianapolis
railroad, and has agreed to pay the in
terest and principal on an issue of
| first mortgage bonds to the amount of
| $4,000 1t is then shown that the
| Pennsylvania company owns about
half Of the stock of the Vandalia. 1t
| Is set forth that interest to the amount
| of $4,000 on bonds of the st. Louis,
| Vandalia & Terre Haute will fall due
November l, and that it Is the belief of
! the compliments that it will not
be paid. Tke compliments also aver
that the principal and interest on the
! first mortgage bonds due January l,
! 1897. will not be paid when due; that
upon this contingency the obligations
of the Terre Haute & Indianapolis
| and OF the tsburgh, Cincinnati q
/ ST. Louis will become enforcible; that
in that case the Terre Haute Sc Indian
/ apolls will be unable to comply, and
claim win be created against the de-
! PENDANT for reimbursement of its
secured proportion.