New-York tribune., 1901-01-05
HONDURAS CASE IN COURT.
POLITICAL AND COMMERCIAL CONTROL
OF REPUBLIC INVOLVED.

The suit Of the Honduras Company of Georgia
against a corporation known the Honduras
Syndicate of New-Jersey. which was begun in
the New-Jersey Chancery Court several months
ago by the filing of a bill. and subsequently OF
| the answer thereto, came up in the Vice Chan
ceilor's Court at Newark esterday.
The defendant company is charged with TAX
ing the benefit of a violated confidence by the
New-York law firm Of Stetson. Tracy. Jennings
g. Russell, and thereby securing a contract with
Honduras which virtually belonged to the Geor-
gia company, and which the law firm, as the
| legal representative OF the Georgia company,
had been delegated TO obtain. The answer by
| the New-Jersey Syndicate company denies these
charges and asserts that the contract secured
was rightfully made TO it.
The contract in question includes virtually the
| political as we'll as commercial control OF the
Honduras Republic, The company agrees TO
fund the debt of SS0ooo.000 in return for which
enormous privileges ere given. The bill by the
plaintiff company reeites that the stockholders
OF the company were attracted by the oppor-
tunities tor immense profits presented in Hon.
duras waiting to be developed. It ascer-
tanned that those in charge of the Government
were disposed TO deal literally with capitalists
who would extroate them from bonded indebt-
edness. Negotiations were opened. and the Geor-
gia company organized by members of the
Contractors Association of Georgia and char
tered on December 4, 1895. The matter was
kept private. Negotiations with the Honduras
Government continued. and in January,
1896, the company retained as counsel the law
firm of Stetson, Tracy, Jennings & Russell as
being allied with and having the confidence OF
| leading capitalists in New-York. The company
also engaged the services of ex-Secretary of the
Navy Benjamin F. Tracy as special counsel.
To these lawyers, the bill says, the company
| laid bare its plans and it's reason to believe that
a great contract was within reach. The law
firm so impressed by the magnitude Of the
opportunity, the bill goes on to say. that it de-
clined a retainer preferring compensation in
connection with the development of the COM
pany's plans. Frederick 3. Jennings. of the
firm actually subscribed for one-eighth OF the
eompany's stock. Such men as H. Walter Webb
John @. Mccullough, Washington s. Valentine
and George s. Scott became interested. II was
proposed by Mr.. Jennings to organize bank 70
finance the companys projects and assist in
funding the debt OF Honduras. and the Com
mereial Bank OF Honduras organized on
August 5. 1896, with a capitalization OF
sl000O00, and with these men directors:
George s. Scott. Silas e. butcher, Jacob Baiz.
Samuel F. McConnieo. Jacob 3, Shipheard,
Frederick B, Jennings. BENJAMIN +. Tracy,
Frank Loomis Washington S. Valentine and
Samuel NJ. Taylor.
The bill proceeds 20 say that certain auxiliary
companies were formed under the laws of
Georgia, and that OF the second seventh and
eighth Of these companies Benjamin T. Tracy
was elected counsel. The prelininaries for a
contract were all arranged with the Honduras
Government. and the commissioners were TO go
20 Honduras to complete the contract, all OF
which was with the knowledge and approval OF
the lawyers engaged.
In the latter part Of 1896. the bill declares;
That your orator suddenly discovered that said
jannin F. Tracy in direct Violation OF their duty
Dyg 70 S EStST anS m e. S S 10 II % %M ss8 w2B
VI. Seward Webb, John Jacob Astor John g Me
tine, Nathaniel A Prentiss D. E MeMNani MSl; yea
others e nnoMn TO w. your orator 70 secure Tor them
selves and for a company they Proeu%gea % 70 o De
orator ali the benefit and advantage 70 be derived
II from SO Isyoraoe VAN Is u me
knowledge and information they cad derived from
E99ddF sen Said ' WashHeon RfS and Henry
s. sprsgHe to Honduras for for the express purpose
their own interests and In the interests Of the de-
or 10 the rights OF your orator.
The bill then continues
The said company. the Honduras Syndicate. was
mere suotsrtuge' ane IESS eaeh ana at OK dS sS
plan had emanated from your orator and belonged
4 Of aa a%ys y9as n oher
70 ignore your orator and, and 70 seek TO appropriate
TO their own use the knowledge, benefits and ad,
their duty counsel OF and associates with
your orator was fraudulent ineQuitable and void.
1t is then recited in the bill that Washington
s. Valentine and Henry L. Sprague April 8.
1897 made a contract on behalf OF the New
Jersey and Honduras Syndicate Company. organ
lied in November. 1896, with the Honduras Cow
ernment by which the syndicate eeded rail-
road banking and other privileges. The agree
ments of the Georgia company had included the
funding of the debt. an interoceanic railway. the
collection OF the customs revenues and the coll
onIzation of several hundred thousand immi-
grants all of which duplicated and incor-
porated In the syndicates plans a duplicate
bank was also organized, known as the CONNER
cial Bank Of Honduras, and a dependent COM
pany has since made arrangements 20 carry out
the terms Of the contract. These proceedings the
bill declares, actually and completely defeated
and superseded the Georgia Companys negotia-
tions, and made of no account all OF its lahors.
expenses and investments. The contract made
is for twenty-five years.
The bill concludes with the petition that the
defendant corporation may be adjudged TO hold
mt OF the Georgia company; that Ii be required
10 make an accounting Of profits and 10 transfer
70 the Georgia company every beneficial interest
in the contract.
appeared for the Georgia Company. and Charles
II. Corbn, Of Jereey City and John G.. johnson,
OF Phiiadelphla, for the defendant company.
The only witness examined yesterday was Jacob
R Shlpheard, the organizer OF the Georgia conf
pany and Philadelphia lawyer. Mr. Ship
heard described the organization Of his
company, and presented documents and exhibits
IL was developed by his testimony that the
Honduras Company OF Georgia was organized