The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-10-16
into the treasury Of said complainant, or

creased to 1886, ZOO.
THAT shortly thereafter, the COM
plainant purchased what was known as
the 'Brownville line," worth at the time
only $4,000, and paid for the same by
issuing therefor 100000 of its capital
stock.
"That in the year 1863, without any
money having been paid into its treas
ury, or any property or other thing Of
value having been purchased by it as a
basis therefor, its capital stock was fur
ther 'watered' to the amount of 1924
300, making the aggregate capital stock
at this time $3,000,000; and in the same
year QS63) the complainant declared a
stock dividend of $300O,000, without
basis therefor, and thus increased its
capital stock to the aggregate amount of
S6.000,0O0, of which amount the only
items that formed a substantial basis
and bona fide investment consisted of the
said original investment Of $4,000 in
the year 1851, and the purchase, as
aforesaid, of the said 'Brownville Line
Of the value Of only $75,0O0-the re-
mainder of the six millions Of stock rep
resenting nothing of value, and being
known as 'watered stock
THAT in the year 1868, the complain
ant purchased other telegraph lines
whose actual value, us the defendants
are informed and believe, was less than
$150,000, and paid the same by issuing
therefor $3,322, 900 of its capital stock,
and in the same year declared stock div
idends, without any basis therefor,
amounting to $1,67S,O00, thus increas-
ing the capital stock to $11 100000, and
soon thereafter, and during the year
1864, without its stockholders having
paid into its treasury any further sum
of money, or without any other property
or other thing of value having been
purchased as basis therefor, it declared
stock dividends to the amount of SILL
100000, thus increasing the capital
stock to $22000,O00.
THAT in the year 1866 the complain
ant purchased the United States Tele-
graph Company worth at the time only
81 ,443, 900, and paid therefor by issuing
S7,216,3OO of its capital stock, and also
purchased the American Telegraph
Company worth at the time only ST.
5O0,O00,and paid therefor by issuing $11,-
$50, 100 of its capital stock, and thus in
creased its capital stock to the aggregate
amount of SAL ,049, 400, and soon there
after another stock dividend was de-
clared without any basis therefor, to the
amount of $5,060,000. A purchase was
then made Of the American Union and
Atlantic and Pacific companies, worth
about So 232, 900, for which account the
capital stock Of the complainant was
added TO in the sum of $19,0S0,000, and
Immediately another stock dividend,
without any basis therefor, was declared,
in the sum OF $15,000,00O, thus increas-
ing its capital stock in the year 1895 to
sos, 100000, and on the first day Of
January, 1897, the complainant de-
clared to the defendants herein, that its
capital stock was $97 10000. Thus
showing, MS defendants allege, over
$60,000,000 of stock representing less
than 100000 af actual value and
more than $37 100000 OF other stock
representing a value not ascertainable
in detail-cons:sting chiefly of stock div
idends, issued with no basis in actual
values. That the total actual expend-
ture of the said complainant from its or
ganization Of money derived otherwise
than from its bonds win not exceed $16,-
100000. That it has issued from time
to time, and has outstanding S15,000,-
600 of bonds. which added TO the afore-
$31, O00,0O0 That as defendants are in
formed and believe, many of the lines
purchased hereinbefore set forth, were
utterly worthless duplicates, built solely
to be bought off by the complainant,
and in some of which many of its Of
ficers and directors were largely con-
cerned, so that they were personally in
terested in selling at exorbitant prices;
nd ha arty oil of
much deprecated in value That COM
plainant pretends, that ii owns and ope-
rates 10000 miles of line, 100000
miles of wire, and $4,000 offices. That
as the defendants are informed and be-
lieve, the pretended mileage is arrived
at by adding together the mileage of all
the complainant's lines the Western
Union has ever bought, leased or built,
large portion Of which has long
ceased to exist and another portion con-
sisting of useless parallels, constructed
on purpose to be bought by the com
plainant, which remain on its hands as
worthless. That three-f0urths Of its Of
fees are furnished, operated and main
tanned by railroad companies, without
expense to the complainant. That the
defendants allege upon information and
DSiatiy thdI tht tOtil DihUi III HtluHl
operation, exclusive of the cable inter
ests, which have been leased by the
does not exceed 100000
miles of poles and 100000 miles of wire
That defendants are informed and be-
lieve that $4,000 miles of poles and
BOO, 900 miles of wire are more than suf-
ficient to replace it's said plant in ope-
ration. That the total or cash value of its
entire plant, including offices, fixtures
and other property, does not exceed the
sum of $20,000,000. That according to
the estimates Of reliable experts it could
be replaced for this sum. That subtract
inf from this sum the amount of $15,-
100000 outstanding bonds hereinbefore
there is left only the sum of
$5,000,000 of tangible and actual basis
for the $97 100000 of stock.
THAT notwithstanding the fact that
the various opposition companies which
have existed from 1866 to the present
time, have been absorbed by the COM