New-York tribune., 1901-04-05
SAYS S. M. WEED DECElV ED
SAN DOMINGO CONCERNS MUST SHOW
WHY THEY SHOULD NOT GO
INTO RECEIVERS HANDS.

Vice Chancellor Pitney has granted an order
to show cause why the San Domingo Improve
ment Company and the San Domingo FINANCE
Company should not be placed in the hands of
receivers The application was made on behalf
of the German-American Investment Company
of New York. The bill filed in Chancery
charges Smith NJ Weed of Plattsburg, n. Y.
and Charles w. Wells and Willard Brown, OF
Brown & Wells. No. IL Broadway. this city.
with operations that jeopardized the interests Of
the German American Investment Company by
wrecking the two San Domingo companies. the
Banoue Rationale de ST. Dominique. a French
corporation being also involved in the loss oc-
casioned by the operations.
The Improvement company has authorized
capital of 81 100000 and the Finance company
also one of 81 100000 The German American
company has paid up capital of 81 ,Uo,OOO- All
three companies were incorporated in 1894. when
concessions were secured from the republic OF
San Domingo granting the right TO collect the
revenue. TO issue money. TO build and operate
railroads. and own public and private fran
chises One of the projects was the construc-
ton Of a railroad from Puerto Plata to Santiago.
The Improvement company began the work and
made a contract with the German American
Investment Company, empowering it 10 act as
financial agent In New-York The Improve
ment company advanced a loan Of S2OooO0 to
build the road In the fall of 1899 there was
$3.50 600 due to the Investment company which
it could not collect, and in December compro-
mise made by which the amount was scaled
down to SI}, 800, to be paid by the return TO the
Investment company of its stock owned by the
directors and stockholders of the San Domingo
companies Sixty-five thousand dollars of the
stock was returned. and afterward $1,000 was
paid in cash. About this time Weed. Brown and
voted out of office and the present officers
elected. They found among the assets
S13T 900 of script certificates of the San Do
mingo Government. the arrears of interest,
amounting to S14,9S0. having remained unpaid
since August 1895. When the government was
communicated with a reply was returned that
the San Domingo Finance Company had received
from the government the funds TO pay all inter
est charges to August. 1899. and that because
of the non-payment of interest charges on ST.
100000 of script the government was about to
cancel it's contract with the Finance company.
The fact was also discovered, it is alleged. that
Weed. Brown and Wells had organized the San
Dominican Railroad Company. and had broken
the original construction contract with the
Drake & Stratton Construction Company, of
Nev-York for the road between Puerto Plata
and Santiago. In February 1900 the invest
ment company officers learned il is alleged.
that the San Dominican Railroad Company had
confessed Judgment to the Drake & Stratton
Construction Company for $4,000. dating the
judgment two years back and securing it by a
transfer Of the assets of the Improvement and
finance companies.
The bill charges Messrs. Weed. Brown and
". is with having Intentionally organized cor
porations TO deceive the public. and charges that
the hypothecation of stock and other assets had
been fraudulently carried on. without the knowi-
edge Of a ma iority OF the stockholders of the two
san Domingo companies
Chancellor Pitney granted A preliminary
Injunction. restraining the defendants from as
posing OF any of the assets or interfering with
the business of the companies
Charles w Wells. cepresident of the de-
fendant companies. said yesterday
II is the result OF an old difficulty with the
German American company. We are very Eiad OF
an opportunity 70 try the question or SolVehGE or
Insolvency in the courts We are strong man.
cially. The Improvement company Was orSdh.Zed
in Jersey nine years ago 10 acquire tne prop
ertv of Westerndorp & Co, a Dutch banking
house We had the collection Of the revenues
Of the republic Of San Domingo as security Tor
bonds We loaned many millions 10 the govern
ment We successfully built railroad We or.
ganZed finance company for the purpose OF
making a market in Europe Tor the bonds or the
republic We still retain those bonds. having heeu
unsuccessful in efforts 10 dispose OF them
We owe the German American Investment Com
own none of our bonds. Their allegations are
ally fa1