The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-06-28

cihc Railroad. 1t SHOWS tndl on Tie -
of April, 1893, Speyer e Co., through one
of their members, attended the meeting
and cast vote for 100000 shares OF stocR'
1000 shares were voted by BretneI1oii'
90 900 shares of which, within sixty days,
had been purchased from Jane Lathrop
Stanford to obviate her opposition 20 tns
refundng plan and other plans OF SAID
Huntington and his associates were IN.
cluded in the stock voted by Speyer "
Co: also $1,000 shares represented by the
Banbury committee con Ah his ID hu nInses
That by these votes were elected Isaac
l. Requa, j. C. Kirkpatrick' Charles r
Hunt, George R: Bqrdick kios George md I'd
Charles H. Troiiiet. That all these direccc
tors were clerks employees and agents Oh
Speyer & Co. and their associates IN lne
banking business, employed by thelI
correspondent, the London Paris ana
American Bank. in which they, are all
bookkeepers, messengers, etc: Ihat Al. tn ar
were put in there for the purpose OF car
rying through this Huntington-Speyer re-
adjustment plan, and they will do so I'M
less reStrained by court. .,o+ .,o Com
trail Pacific Railroad Company owed IN
bonds, giving a list of the mortgages by
the United States, and $50, 4S5, 900 to be re-
funded or paid out. 1t sets out the author,
ity given to the commissioners appointed
by the Goyernment to set{le me ne, cam ann
tied the claim by accepting twenty notes
of the Central Pacific Railroad company
one of which is payable every six months
for $3.50 S35 IS each, and that Speyer
Co. advanced the money for the frSt
four notes. 1t charges that the whole
scheme was gotten up prior 70 the is. Isl
of February 1899. which was the day the
Government made the settlement, al
though the papers were. all dated after
ward-one on the Sth day of February
and the other of February IS, 1899. These
papers state the agreement between ire
reimbursement managers, as they are
called. viz: the foreign bankers the, Cen
roll flo ail
Banbury committee.
This plan sets out numerous bonuses
and premiums to be paid en- refunding the
old bonds fo~ rev ones to be issued I'M
der a new mortgage TO be executed for
500 900 900 and n second mortgage for
$25 100000 A great portion of the second
mortgage bonds is used up in premiums
for the surrender of the old bonds. some
twenty million dollars of which do not
mature and are not payable for eighteen
years to come.
The Central Pacific Railroad Company
is to issue according to this plan, ac-
cumulative preferred stock to the amount
of s20. 100000, to have per cent dividend
before any dividend can be declared on
the common stock, but in the case OF
foreclosure and sale the holders of the
accumulative preferred stock, which
would be the Southern Pacific Company,
| as they propose to buy, it, to Sc
cure the sum equal to the aggregate
par value of the accumulative pre-
ferred stock. and the Southern Pacitie
3
stock of the Central Pacific Railroad by
paying them in Southern Pacific Company
bonds to an equal amount; that all the
shares of the Central Pacific Railroad
Company represented by the certificates
of the Banbury committee, amounting 20
81 900 shares, are to be paid for IN stock
of the Southern Pacific Company share
for share.
The bill claims that this contract is IL
legal; that there is no law in California
for the issuance of preferred stock, and
! ic no prON-iSiOn in the articles of
incorporation of the Central Pacific Rail
road Company allowing it, and that SUCH
preferred stock would be illegal If issued
without the consent OF the complainant,
as it would violate the contract between
him and the Central Pacific Railroad
Company when he became a stockholder.
Alleges that the stock of the Southern
Pacific Company is worthless if the com
pany possesses no money, has no prop
erty except stock of the Southern Paclnc
of California, of Arizona and New Mex
leo, on none of which have any of these
companies been able to pay any dlVi-
dends and cannot now. pay any. The
bonded Indebtedness of the Southern IA
cific Company and of these corporations
exceeds the value of all the property of
the Southern Pacific Company. That the
only security for the payment of its bonds,
aggregating $40 600 900, is only collateral
mortgage on the shares of accumulative
preferred stock and on the common stock,
which may be transferred to the Southern
Pacific Company by the Banbury com
I
Gates That this device of exchanging
shares of Southern Pacific Company
stock for Central Pacific Railroad Com
pany's stock is to enable the Southern Pa
cific Company to again get control of the
Central Pacific and stop all competition.
Sets out the premium to be given for
the different classes of bonds ranging
from S29 in cash and $50 in new mortgage
bonds on every 500 of the older securities
to $50 in cash and SIS in mortgage bonds,
and in one case Sal in cash and $500 in new
hon dc IN "a
$1,000 of bonds of that particular class.
That the value of the amount of bonuses
and premiums paid according TO this plan
out of the second mortgage of $50 ,OOo 600
will be 1913 435, 200 in bonds and $500 500 &c
in cash out of the 500 900 900 to be paid to
the Central Pacific Railroad Company for
It's preferred stock $12 600 900 shall be used
to pay the expenses of the reimbursement,
and out of the second mortgage bonds
S11 305, coo shall be used to provide cash
and money to execute the readJustment
plan.
The bill claims that this new indebted
ness of s125 100000 is illegal and fraudu
lently made up to take up bonds issued in
fraud of the Central Pacific Railroad
Company. That the bonds on which the
bonuses and premiums are to be paid are
Jointly held by Huntington and his asso-
ciates and the Pacific Improvement Com
pany; that besides the SIPS 900 of any
indebtedness under this plan there is ST.
9S1 900 of bonds now secured on the prop
ertv of the Central Pacific Railroad Com
pany not provided to be paid, so that I'M
der the plan the debt will soon amount TO
$l42 9S1 600 while the present debt before
the refundng is only SIG. .715 As. After
applying the sinking funds now in hand
to the debt which is now due the real
debt is only about $1O2 1853 -: The COM
plainant objects to taking the sinking
fund now pledged to pay the present debt
and turning ii over to the trustees of the
new second mortgage.
Alleges the scheme of increasing the
debt Simply provides a corruption funu
which may be used to persuade the hold
ers of the Banbury certificates amount
ing to 377 900 shares to transfer them to
the Southern Pacific Company, to the
control of said Huntington and his asso-
ciates. that is, to. the Southern Pacific
Company which thus becomes the Sue
cessor OF the Central Pacific Railroad and
destroys the value of that railroad to the
public as . competing line.