The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-03-14

tract Will not bItu one ray u ABHl uH
the case" You seem to make light OF
it," responded the genial court.
The testimony of Mr.. Herman Myers
went over very much of the same ground
covered by Mr. Weed. He also insisted
that the control of the Mid
die Georgia and Atlantic by
the Central increased the value of the
Eatonton branch bonds. and he would be
willing to exchange his bonds for those
of the Central of Georgia MIR Myers
said that a bond of a long railroad would
bring more and sell reader in the mar
ket than the bond of a shorter line, be-
cause a long line of railway would be
more generally known than short one,
and that to sell both Eatonton branch
and Middle Georgia and Atlantic with
their sixty-iive miles of road, would bring
more than to sell the two pieces sepa-
rately.
Maj. Edward Karow confirmed the state
ment of Mr.. Myers that he would be able
to get more for Central railroad divis-
ional bonds than for Eatonton Branch
bonds, because he had written north and
found out that he could actually do so.
Maj. KaroW is treasurer of the Middle
Georgia and Atlantic and showed a state
ment of Feb. %, when he had received
from the railroad S13,04S,09, and paid out
to that date SlS,07s,9l, besides paying a
note of $40 03 20 the Georgia road for
steel rails to be put on the Eatonton
Branch, which showed that he had paid for
the company more than $4,000 more than
he had received from its earnings.
The Central committee bought what 1T
claimed TO be a majority of the Eatonton
stock, Mr., West said in beginning his ar
gument, and then endeaVored to secure
the control of the road, as shown by the
whole transaction, for the benefit solely
of the Middle Georgia and Atlantic. Mat
tiers grew worse rapidly, both parties
claiming to have a controlling interest
An arrangement was made between the
two parties, after much negotiation.
Messrs, West ana Gaudry representing
the Batonton people, by which the Eaton
ton Branch was sold to the Middle Georgia
and Atlantic, mad not to the Central COM
mittee. This agreement is in writing,
The Eatonton Branch was sold to the
Middle Georgia and Atlantic, ne said, for
&6S,000 cash. and then the Middle Georgia
and Atlantic guaranteed the payment of
that amount. The Eatonton Branch was
not the property of West and Gaudry, but
under the circumstances they had per-
feet right TO agree to de-
liver 1t to the Middle Georgia
and Atlantic. The Eatonton Branch
bondholders, he said, then had three Sc
curites. bond, a mortgage on the Eaton
ton Branch railroad and the guarantee of
the Middle Georgia and Atlantic, that
these bonds would be paid. The first of
these was worthless, he said because the
whole property had been conveyed to the
Middle Georgia and Atlantic. They had
the right to make the transfer. he said
as long as the property had no creditors,
and II had none. The mortgage was for
$4,000 a mile on good road but whether
IL would bring that or not could not he
told, As TO the third security the guaran-
tee of the Middle Georgia and Atlantic,
that corporation now says when it made
that guarantee, it was insolvent, as il
owed $4,000, whereas ii was worth from
$500 TO $4,000 mile.
The president of the road says be did not
consider the guarantee worthless, for if
he had he would not have put his sigma
ture to 1t. He considered 1t good because
1t was going paying concern, 1t might
not bring the value of the property at
foreclosure It sold out, but for that matter
neither would the Central railroad. 1t
would not bring fifty cents on the dollar
of it's present outstanding securities. The
property. therefore. must be looked on In
the light of a going paying concern, The
company had siXty-five miles of railroad,
and was no more insolvent than any other
railroad, which was going ahead and
making money IN that way.
Now the Middle Georgia and Atlantic
has sold out lock, stock and barrel to the
Central and has left behind that guaran-
tee no property whatever. Now We have
got the bond and the mortgage, and We
had the guarantee. The Middle Georgia
and Atlantic would never have been sold
TO the Central had it not secured the Ea-
tonton Branch. We were a part OF a going
concern. II Is evident that the guarantee
of the Middle Georgia and Atlantic Is
gone. and II we were to sue we would
not get a cent. The purchase money, the
bonds OF the Central, are TO be divided
among the stockholders of the Middle
Georgia and Atlantic. The Central Is TO
issue under it's contract 5000 of bonds on
aiAty-1ve miles of road and TO retain $685.
900 of them for bettermeNts. That Is rea-
sonable, and we take no exception to 1t.
Then the Central was to put in trust $685.
COO of the bonds for the purpose of retir-
ing the Eatonton Branch bonds.
The St6S,0e9 Eatonton bonds is a prior
mortgage, and the property was bought
subject TO that mortgage. All the rest Of
the bonds were paid as purchase money
OF the Middle Georgia and Atlantic.
Neither the $4,000 nor the Sl6S,OO0 was a
part Of the purchase money of the Middle
Georgia and Atlantic.
Mr.. West asked Capt. Cunningham
whether the Central would assume the
debt TO the Eatonton Branch as an OBJ
Igor, or would the Central guarantee the
bonds Capt. Cunningham replied he was
not on the witness stand.
Col Garrard said he was not on the
witness stand either but would endeavor
TO answer the question. The substance
Of his reply was that the Central had as
summed the debt by putting aside $l6S. 900
OF It's bonds, and had given the Eatonton
bondholders even better thing.
Ii the attorneys desired 20 dodge the
issue Mr. West said he would have to
proceed with the argument on that ques-
ton. lie said me would proceed 20 show
that the Central had not assumed
this liability FOR the guarantee. rhey
bought the property simply subject 40
the mortgage, he said. and will not have
Co take IL or pay the difference IL Il
should be foreclosed.
Mr.. West characterized the answer Of
the Middle Georgia and Atlantic as a lot
Of rot and rubbish. The main question
at issue, he said, was can the bonds Re
distributed In accordance with the deed
or can court Of equity hold that those
bonds be cancelled ana the others dis
tributod TO the creditors.
An adjournment was taken by agree
ment until tsmorrow al 70 O'Clock.