The Wilmington daily Republican. (Wilmington, Del.) 1890-1902, 1899-09-14
BAY STATE
ON THE RACK.
Shareholders and Bond
holders Have Hearings
in Suits to Secure
Accounting.

Following almost upon the announce
ment Of the death of Cornelius Vandebilt
the fact is disclosed that suits are pending
involving William G. Whitney's control
of the stock Of the gas companies merged
in and controlled by the Bay State Gas
Company Of Delaware The connection
, is only remarkable In the fact that Mr..
Whitney is the fatheIein-law Of one of
Mr.. Vand,rbilt's daughters
Back Of hearing begun In Philadelphia
yesterday lies long sores of financial
manoeuvres by which the stock Of the Bay
State Gas Company of Delaware was in
creased from *5.O)O, 900 to 100000. 00a. In
these suits, to which no publicity is given,
the allegation is made that this increase
was fraud upon the shareholders.
In the hearing yesterday the question of
income was at issue. In other words, cer-
tain suing income bondhollers were trying
to ascertain why they had received 10 n,or-
est Oh their bonds since. May 1898. Other
aud similnrsu suits have been brought in the
past. but in the hearing yesterday Il novelty
was introduced-the books, or what pur-
pored to be the books. Of the Bay State
Gas Company were produced. An order
to produce thom had been made by judge
Dallas, and after much delay the books
were brought In to court. 1t was expected
that in this suit, rs those in past, the com.
pany would settle rather than produce its
accounts.
Counsel for the suing bondholders are
said to believe the books produced yoster-
day arc not the real account books of the
Bay State Gas Company. The inference
is that they bcieve them spurious set of
books prepared for the occasion.
1t is also declared that the voting power
of the stock Of the original four gas COM
panic; of Boston, which was vested sepa-
rately in the Bay State Gas Company Of
New Jersey, was fraudulently transferred
to William G. Whitney and that subsc-
auent litigation by which this transfer
wa: sought to be set aside was collnsive,
and that the decision by which Mr.. Whit
ney's title was confirmed was the result of
fraud upou he part of J. Edward Ad-
dicks, President of the Bay .Sta'e Gas
Company-and companies.
| In the bill of complaint fled early last
year by Jacob Edwards and others, of Bos-
ton, owners of income bonds of the Bay
State Gas Company, the allegation is
| do thnt ha If
received 20 interest thereon siuca May l,
! 1858, because the earnings of tho company
! have been diverted by J. Edward Addicks
from their legitimate channel.
In tracing for the first time the history
Of these marvellous transactions, in which
the capital Of n company owning practi-
cally nothing was increased from 800, 900
to 500, Oo0, O0o they disclose tale of finau-
ciering the like Of which has probably beon
unheard ofsince the days of Lows South
Sea bubble.
MUCH OUT OF LITTLE,
To begin at the beginning the present
| Bay State Gas Company Of Delaware, into
which have been merged the Bay State
Gas Company Of Massachusetts, and three
other Boston gas companies, wasf ormerly
and originally known as the Peninsuar
| Investment Company. Its capital was
nominally 100000. 10 ii were transferred
nll tho obligations as well as the assets of
the Bay State Gas Company of Now Jer.
sey.
Addlcks had therefore agreed with the
Bay Sta'o Company of Massachusetts, to
erecI gas works for 1t in Boston on receipt
Of $3.50, 900 in cash and S4,50O,o 900 in bonds.
He erected the gas works and got tho cash
and bonds, which latter be transferred to |
the Bacon Construction Company an Or
ganizatiOn in which he held IA. $50 out Of |
n total of 1900 shares and of which he |
was chairman.
Tho transfer was maze to the Pennsular |
Investment Company by certain inter-
mediarics. And tho Psnir sular Invest
Company of Delaware tho third of its
name.
All the stocks of tho original four gas
companies in Boston were long ago hy-
pothccated to the Mercantile Tru t Com
pany Of New York, but held separately
wa, he power TO vote these stocks, which
wns later made the subject Of the Trans
fer to Mr.. Whitney. Upon tho receipt of
those stocks the Mercantile Trust Com
pany issncd Boston United Gas bonds to
the amount OF SO 0O0,0J0
Amid this clouds OF transfers, retrans-
fer. hypothecations and sales, one fact re.
mained nspicuous-ihe actual property
Vt tho original companies was In no way
increased. There were, moreover, all the
original stock and Indebtedness of tho old
companies still in existence the Bay State
Company of Massachusetts, the Boston
Gas Light Company. tho Roxbury Gas
Light company and the South Boston Gas
Light Company.
Mr.. Addicls was, according to the com.
plainants, in nowise abashed by this great
loGl Of indebtedne IS. Tho stock OF tho
Bay State Gas Company of Delaware.
which had in some manner swollen from
slOO, ,0Oo to s5,0OO,00n was suddenly in.
creased from s5,OOo,O to sl5. .OO),O)O.
In this increase the original holders of
the stock assert they were in no way con.
sui cd received no portion of tho new stock
and no portion of the proceeds of the sale.
But from Sl5, 100 OOo to $50. .OO0C0J was the
next step, and the Bay State Company
was then listed at that enormous capital
ization. Upon this modest basis he CON-
pany ran along for time, livoly trade
was done In its shares on tho New York
Exchange, and the prico veered and luc-
uated between SIC so and $40 n share.
Meanwhile sundry bondhoders Of the
became concerned for their se-
curlty. They saw their interest falling
constantly In arrear while
the shares Of tte company increased.
Suits were begun, chiefly in Delaware, in
each OF which an examination or inspect
ion Of the company's books was demanded
In every ono Of these suits the flercest re-
sistance was made to the exposure Of the
accounts-in every one, too,
when the Court ordered, or was about to
order the books produced, q settlement
,p = i,on rf In hnpto a |