The Brownsville daily herald. [volume] (Brownsville, Tex.) 1897-1910, 1903-07-15
SECRET HISTORY OF SAP CASE.
Continued from Page ons.)

and asking the Attorney General,
IN view of their having been au-
tborized If he believed them legal.
Judge Storey, the chairman, voted
for both resolutions, and the Com
mission agreed to send them both
TO the Attorney General, together
with all the data in hand relative
to the matter, and on the goth OF
March the chairman OF the Com
mission wrote General Bell a letter
and sent him the papers in the case
and the written motion of Mr.. May
fields and the resolution offered by
myself. On the same date on receipt
of a letter from Hon. T. H. Napier.
asking for information as to the
truthfulness of a statement about
the issuance of the bonds in ques-
ton, copy of the data and resolu-
tions sent to the Attorney General
were also given to the House OF
Representatives.
ION March 81 l received letter
from Hon. C. C. McChord, chair
man OF the Kentucky Railroad
Commission, in which he sent me
a certified list of the stocks and
bonds listed in Kentucky by the
Southern Pacific Company with the
Franchise Tax Board, showing that
the stock of the Galveston, Harris
burg d San Antonio and of the San
Antonio d Arkansas Pass Railways
were owned by that company, and
subsequent to the receipt of this
evidence, April 4, the Attorney Gen
eral replying to our communication
of the 10Th of March, advised US
that he thought the Commission
could maintain an action against
the Arkansas Pass road to cancel the
bonds in question, and to forfeit its
charter because of common owner
ship by the Southern Pacific Com
pany of its stock and that of the
Galveston, Harrisburg q San An
tonic, a parallel and competing
road. Accordingly notice was given
of public hearing as provided by
law, notice being issued on April Z.
The time for the hearing was after
ward extended on account of sick
ness. But on the 9th of April the
hearing was had and the entire day
WAS taken up in hearing testimony
and arguments of counsel for the
Southern Pacific Company and the
San Antonio & Arkansas Pass.
at developed on the hearing that
the Southern Pacific Company had
acquired the control of the Arkansas
Pass stock without paying anything
therefor and in the following man
ner:
"The road had been built mostly
by Texas people and Texas capital.
The road had been put into the
hands Of a receiver and the owners
were unable to make q satisfactory
adjustment of its debts with its
creditors. A committee of the share
holders was therefore appointed to
negotiate an adjustment of the
company's affairs and they pro-
ceeded to New York and after much
negotiations the Southern Pacific
Company was interested and made
the proposition to indorse the bonds
of the San Antonio d Arkansas Pass
up to the amount of $27 900 per mile
for 800 miles then constructed and
to be constructed, if the stock
holders in consideration for this in
dorsement of their bonds would
turn over to the Southern Pacific
Company the stock of the San An
tonic d Arkansas Pass. This was in
substance the arrangement made.
The bonds were Endorsed by the
Southern Pacific Company under
the mortgage, and the stock held
by Captain Kennedy and others,
whom it was said put 100000
into the road. was transferred to
the Southern Pacific Company, and
the road taken out of the hands of
the receiver.
"The attorneys at the hearing
practically admitted that the facts
in the possession of the Commits
sion would sustain and justify an
action against the road. But they
also assured the Commission that
the companies interested were ready
and willing to do practically every
thing that could be accomplished
Z l.. - IL. =. fo.fO:.. Il IL