The Montgomery advertiser., 1906-12-30
CHARGES OF
 CRAFT MADE M, J. & K. (. Litigation
 Sensation. ENTRIES WERE FRAUDULENT Allegations Are Preferred by New
 York Lawyer. Mobile. Jackson and Kansas City Has No Securities In Alabama Watch
 tan Be Touched By 

| Mobile. Ala, Dec. 29-T. L. Chad | bourne, Jr., a member of the firm of New York lawyers which is represent ing the receivers of the Mobile, Jackson and Kansas City Railway Company, filed an affidavit in connection with the bill, alleging that he was stock holder in the road and a large owner of stock in the Alabama Securities | Company, and was an active factor in the affairs of both concerns; that the Securities Company purchased the en- | tire stock of the Chicago and Gulf Rail- way Company for the sum of $270.000: | that Alexander Mcdonald, w. D. Strat- 1 ton and F. K. Stallo own or control a majority of the stock of the Securities Company. but that by reason of his interests in the Securities Company up to the latter part of 1903, he was en- tirely familiar with the transactions of the Mobile, Jackson and Kansas City road and the Securities Company.
 And owing to his interest as 6 bond and stockholder of the Chicago and Gulf Railway he has since the above date kept in touch with the transac- tions of Stratton, Stallo and Mcdonald and the companies they control.
 He alleges that they have made charges against the Mobile, Jackson and Kansas City Company in favor of the Securities Company for alleged ex-
 
 ing s1,163, 3,361.63 and that by virtue of their control of the railroad company and the Securities Company, they have had the former admit liability by con- tract with the Securities Company to the extent, of s500,O0O on fraudulent and unwarranted claims, and further that they caused the Securities Company to be credited with s3s4,651.51 on claims equally as unwarranted and fraudulent. Mir. Chadbourne claims that the Se- curities Company has no assets in Ala bama that can be reached by law and that the Mobile, Jack 0ft>.and Kansas City and Chicago and C al&, Companies are hopelessly tnsolvent F9SS
 E. R. Stewart, formerly auditor of the Mobile, Jackson and K nsas City Company, and who resigned a short time ago, makes affidavit to the effect that under instructions from the presi- dent of the road at the time he was auditor, he, was ordered to make fic- titious entries to the credit of perma- nent Improvement with countercharge against operating expenses so as sto make the earnings of the road appar- ently exceed its operating exT Ises and fixed charges, whereas 'iL act the earnings were not sufficient to cover oera. stg expenses and fixed charges. and that these fictitious entries caused ,ne books of the company to show net earnings instead of a deficit.
 VIII Build up Road.
 It was announced today by Messrs. I. and H. T. Smith, local repre- sentativcs in Mobile of Ambrose Mon- nell Thomas Mo rrison and John Me Leod, who filed tAe bill of complaint in the ChancerS Court on Wednesday evening against the Mobile. Jackson and Kansas City Railroad. its agents, officers and directors, upon which the road was placed in the hands of re- ceivers that the purpos' of the men named and the interests they represent is to build up the Mobile, Jackson and Kansas City to a high state of eficien- cy and to remove the deficiencies they claim now exist in the operation of the road.
 The New York attorneys of com plainant are Godkin and Chadbourn. and Sullivan and Cromwell. two of the leading firms of that city. They have a representative in Mobile at attorneys. MT. Harry Smith, of the local firm. stated that it was the pur- pose of their clients to build up the road not to tear it down; and the whole cause of complaint on the part of stockholders who applied for the receivership Is that the road is not carrying out its part as a comman car rleF uuueE luo present. Hl1udkeulelJI that it's affairs are fin a confused con- ditiOn and that the property Is thereby deprecating. This complainants pro- pose to amend.
 It became public that the order for the recivership was made after three afidavits had been filed in the Chan cery Court along with the petition. One of these affidavits is from MT. r, E. Dewey, now receiver and gen. eraI manager of the road. It charges fraud and gross mismanagement on the part of the present officers, nam- ing specific instances, and further charges that MT. Dewey was deposed as general manager because he pro- tetsted against the diversion of mon- eys into improper channels. The af- fidavlt is sensational in its statements of mismanagement.
 Information was obtained that Dewey was not party to the first movement for throwing the road into the hands of receivers. It is charged that q committee representing the stockhol- ders who are complainants, made ap- plications to the officers and manage ment of the road for inspection of tho books and statements as to It's con- dition and failing in obtaining these