The Montgomery advertiser., 1906-03-28

 l to include the power of making con | tract such as they entered Into twentI years ago; that the Louisville ant Nashville has operated the South ane North with due regard for the inter ests of both roads. and that the charge against them Is the result of selhsf motives on the part of the prosecu tor
 Claiming. that under the laws of the State of Kentucky, In which the Louis vtlle and Nashville was chartered, 1t had the power to amend it's charter, so that it could operate. lease or pur- chase railroads. not lying within the confines of that State. On March 6. 1878. this charter was so amended that. with the approval of a majority of the stockholders. the directors might have the power to operate any railroad nee essary to their protection. As an arr gument that the law has granted t.ieni this power. it points to the fact that the Louisville and Nashville has been operating the South and North Tor twenty years. During this time, 1t claims that the Louisville and Nash vile has always done all that foreign corporations were required to do by the laws of Alabama, in order to carry on business in the State, and to that end has from time to time filed instru- naents with the Secretary of State of Alabama. designating the places of business of the road, and the agents in charge.
 south and North History.
 Going over the history of the South and North Railroad, the reply states that the road was incorporated in 1854. and that on February 26. 1872, the char ter of the road was amended so as to allow the Louisville and Nashville to build for them road between Decatur and Montgomery, and to own a major ity of their stock. This amendment was accepted by the stockholders. Since that time, the south and North Railroad has accepted the benefits of the combination of the two roads In the manner provided by the eonstitu- ton Of Alabama.
 At the time the Louisville and Nash vile undertook the building of the road from Decatur to Montgomery, $2, 2,000,000 worth of preferred stock was issued to the former road, to se- cure them for the expenses incurrd in the construction of the line. When the road was completed, the Louisville and Nashville furnished the equipment necessary for It's operation. The re- ply points out that when the road was first built, its earnings were not suffi- cient to pay the interest on the bond ed indebtedness of the South and North, and that funds were advanced by the Louisville and Nashville to meet these obligations, s0F that now the in- debtedness of the former road to the latter amounts to in the neighborhood of $i2,000. 900.
 Good Faith of Defendant.
 The South and North Railroad. the argument continues. could never have operated without this help from the Louisville and Nashville. It has not at the present time sufficient equip ment to operate alone. and 1t would take several years for 1t to acquire this equipment.
 It Is further urged by the Louisville and Nashville that 1t entered into the arrangement with the South and North in good faith, and that it has contin- Red to carry out the conditions in the contract between them In good faith. Relying upon the acquiescence of the State of Alabama in recognizing the terms of tho contract 1t states that 1t has made expenditures and incurred liabilities in building continuous roads from Cincinnati to New Orleans, in which the South and North, from De- eat0r to Montgomery. forms a connect ing link. That in addition to these roads, 1t has built feeders to the South and North line. and encouraged the es- tablishment of industries along the line of this road and that 1t now has many long time contracts with these industries for the transportation of raw materials which 1t can not carry out if 1t is busted in accordance with the quo warranto proceedings insti- tuted by the prosecuting parties.
 In conclusion the road urges that the operation of the South and North by the Louisville >and Nashville has not in1urIousiy affected the State. that it's equipment is good. and that its trains are operated so as to give the public the best available service. It main talns that the organizations of the two corporations have been kept separate. and that the Louisville and Nashville in it's operation of the South and North has acted for the best interest of both roads An custer at this time. 1t states, would result in great incon- venlence to the people or tne State.
 History Os Litigation.
 The reply of the Louisville and Nash vile to Judge Sayre's opinion Is only one of many papers in the proceedings which have been carried on in the courts during the last year. On March 10, 1905, Henry B. Gray, of Blrming- ham, who owned ITO shares of the South and North stock, filed a bill in the equity division of the City Court, seekinE an accounting from the Louis- vile and Nashville of its management of the road. and praying for the ap- pointment of a receiver for the South and North until the matter should be On March 25, a motion was made for the appointment Of a pending the litigation, and Dpcn this being denied, the matter was carried into the Supreme Court of the State of Alabama, where 1t now rests. Although the appointment was denied, | however, the accounting asked for, was ordered by the court An injunction was later sought by the prosecution restraining the Louis- vile and Nashville from operating the south and North. during the eontinu- ance of the litigation to oust the for ner road from its position with regard 0 the latter.
 The quo warranto proceedings. ask ng the Louisville and Nashville to ex- plain on what grounds they base their rights to operate the South and North, were filed several months ago. The Louisville and Nashville filed an an- swer to this, which Judge Sayre in his opinion recently, declared did not account for their legal rights to their position. The reply of is in response to the oppor unity presented by Judge Sayre for a further explanation of the position of the Louisville and Nashville in the matter.
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 LOW RATES VIA. l.. & N.
 HN. Fra-