The San Francisco call., 1896-11-14
Peculiar Turn in the Affairs of
One of the Most Prosperous
Railroads.
FREEZE. CUT GAME ALLEGED.
The Suit Said TO Be for the Sole
Purpose of Sci ing the System at
Low Figure.

INDIANAPOLIS, IND, Nov. 13-Judge
Woods of the United States Circuit Court
this evening appointed a receiver for the
Terra Haute and Indianapolis Railway
Company, known as the Vandalia, nam.
ing as receiver Volney T. Malott, presi-
dent of the Indiana National Bank. The
receiver was appointed upon the suit of
Mark T. Cox, James 7. Blair and James
| W. Paul Jr., againtt the company, and
| the ground for the receivership was the
ad mission of the company 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 Pennsylvania company,
which purchased majority of its stock,
it met its dividends and all charges with
the utmost promptness.
During the hearing to-day Judge Woods
remarked in court upon the peculiar fact
that all three attorneys seemed to desire
receiver, and he did not make up his
mind to appoint one until this evening.
| Some of the parties interested in the
securities of the system who were not
made parties in interest are declaring to-
night that the suit is collusive one for
| the purpose of freezing them out and sell
| ing the system to the Pennsylvania at a
! low figure.
The plaintiffs in the suit were repre-
sented by John g. Williams formerly
general manager of the Vandalia system
! George w. Wickersham of New York,
| Samuel Dickerson OF Ne v York and Mr..
Golden of ST. Louis. The defendant COM
pany was represented by S. o. Pickens,
who is also attorney for the Pennsylvania
company. The bill sets forth that in 1870
the defendant company acquired posses
sion of the St. Louis, Vandalia and Terre
Harte Railroad, and that in 1892 it took
charge of the Terre Haute and Peoria
Railroad, entering into contract with it
for ninety-nine years.
Prior to this latter consolidation in
1889 the Terre Haute and Peoria had by
deed of trust conveyed all its property to
the Union Trust Company of New York,
to secure first mortgage gold coupon bonds
to the amount of ST. 500. 000, due March L,
1927, with interest at per cent. In 1892,
while the negotiations for consolidation
with the Terre Haute and indianapolis
were pending, the Terre Haute and Peoria
authorized the issue of bonds to the
amount of 50, 500. 600, payable to the Union
Trust Company, for the purpose of i'm
proving the road and Tor retiring the first
issue Of bonds. The consolidation was
effected in October, 1892, and the bonds
were issued.
! By the terms of the contract entered into
between the defendant com mpanv and the
bondholders it was agreed that 80 per cent
of the gross earnings of the Terre Haute
and Peoria Railroad should be devoted to
the payment OF the interest on the Terre
Haute and Peoria bonds, taxes and rentals,
the remainder of the 80 per cent, if there
should be any, to be paid to the Terre
Haute and Peoria Railroud.
The complalnants aver that the interest
has not been paid, though the 80 per cent
of the gross earnings would have been suf-
ficient to have paid 1T. The gross earn
| ings since the defendant company took
pos session Of the Terre Haute and Peoria
have been as follows: For the thirteen
months ending October 81, 1898. $449,-
| $50 SO; for the year ending October 81,
| 1894, $404 OLA 60; for the year ending
| October 81, 1895, $447, ,4S3; October l, 1896.
up to September l. 1896 (ostimated), $780,
| 600; all of which money, it is alleged, has
| been appropriated by the defendant.
! The bill recites that the defendant COM
pany is operating the Terre Haute and
Logansport Railroad and has agreed to
pay the interest and principal on 81, 500 600
of its bonds; that it is operating the Terre
| Haute and Indianapolis Railroad and has
agreed to pay the principal and interest on
| an issue of frs. mortgage bonds to the
amount of $4,000.
1t is then shown that the Pennsylvania
| company owns about half the stock of the
! Vandalia. 1t is set forth that interest to
the amount of $91, 600 on bonds of the st.
Louis, Vandalia and Terre Haute will fall
due November / and that it is the belief
of the compliments that it will not be
paid. The eomplainants also aver that
1.-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 and Indianapolis and OF the Pitts
burg, Cincinnati and st. Louis will be-
come enforcible; that in that case the
Terre Haute and Indianapolis will be un-
able to comply, and claim will be Gre
ated against the defendant for reimburse
ment OF its proporio