Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-01-25
Seek to Have Forfeited Parent Com
pany's Charter.
SERIOUS CHARGES ARE MADE
Attorney General Explains Action
Against the st. Paul, Minneapolis
and Manitoba Line.


General Young today began mandamus pro-
ceedings in the supreme court to compel the
st. Paul, Minneapolis and Manitoba Rail-
road Company to show cause why it's char
ter should not be forfeited. This company,
formerly known as the Minnesota and Pa
cif1c Company, is really the parent company
of the Great Northwestern Railway Com
pany, and the Great Northern is joined in
this ISSUE as 1t is the owner of the Manitoba
company's stock.
Attorney General Young has given the As
ISOLATED Press a digest of the allegations
set up in the billfled in the supreme court
The complaint covers about eighty type
written pages, and goes into all the transac-
tions Of the Great Northern Railroad Com
pany with its constituent companies form
ing the merger known as the Great
Northern Railway Company. attorney Gen.
eral Young says:
I'VE have commenced an action in the
name of the state against the st. Paul, Min
neapolis and Manitoba Railway Company
to compel forfeiture of its charter for the
reason that ever since it transferred its
tenances to the Great Northern Railway
Company on February l. 1890. 1t has ceased
to perform the functions for which 1t was
created and has therefore forfeited its right
pany
Great Northern Party.
1--WE have joined the Great Northern Rail-
way Company as party to this action be-
cause 1t is the owner of the stock of the
Manitoba company and for the further rea-
son that in the alleged purchase of the
property, the assets of the Manitoba COM
pany. by the Great Northern company, a
very large amount of water stock was is-
sued by the latter company, which we claim
Is void under the law Of this state. upon
" a IL ra md civ, t.,
Issuance have been paying large dividends.
We ask that this stock be declared void and
the payment Of further dividends thereon
be prohibited.
I'VE have proceeded with elaboration in
this matter on account of the magnitude
OF the interests involved and the great i'm
portance of the questions, both as to the
state and the companies affected. The
Great Northern company was created by
the stockholders of the Manitoba company,
and at the time of the transfer of the prop
critics the stockholders in both companies
were Identical 1t seems that the Great
Northern company was created solely for
the purpose Of making 1t possible to in
hate the capitalization of the system by
Northern at price in excess of their value
1t is easy to see why, under these circum-
stances. the Great Northern Company
should pay premium of 5000, 900 on the
pany.
Refuse to Pay. @
When the gross earnings tax on rail-
roads was raised from to per cent in
1905 the Great Northern company refused
to pay the increased rate on that portion
Of its road in this state which was original
ly constructed by the Minnesota and Pa
cific Company. The latter company had a
charter from the territory in which 1t was
provided that the company never should be
called upon to pay more than 3 per cent
on Its gross earnings. The company be-
came bankrupt, and In 1879 the Manitoba
company purchased its road and franchise,
ever since the purchase the Manitoba COM
pany has claimed that it acquired, by the
purchase. the same immunity from any
raise In Its rate of taxation that the Mime
sofa and Pacific had.
Last March, when the taxes for 1905 be-
came due of this road, the Great Northern,
which operates the road under an alleged
lease from the Manitoba company paid
state commenced an action against 1t for
$1O,OOO, being the unpaid / per cent of its
taxes under the new law. In that suit i'm
munity from any increase above per cent
in its taxes is claimed. under the charter of
the Manitoba company, by virtue of the
rights 1t claims to have acquired at the
purchase OF the road in 1879. The suit is
not yet disposed of. The railroad taxes for
1906 will be due in a few days and there
will be an additional amount greater than
that above mentioned in dispute for that
year.
No Right to Exist.
eve are convinced that the Manitoba
company is no longer entitled to exist as a
railway company, and that the speediest
way to dispose of it's claim to exemption
from the rate of taxes paid by other rail-
way companies is to have its charter wiped
out, in which event the Great Northern
will be obliged to pay taxes at per cent,
the same as other companies.
1--WE are also of the opinion that the
Great Northern should not be allowed to
continue to pay dividends on water stock,
and that 1t should be required to show
whether the large amount of stock which
appears to be fictitious has any right to
further recognition as a part of its CAPT.
talization.
This suit will involve also the question
of the company's right to create lot of
subsidiary companies composed Of its own
stockholders, to build extensions and then
issue stocks and bonds at will without any
public supervision, and also the right of
the Great Northern company to divert the
proceeds of the sale Of its capital stock to
the purchase Of the stocks and bonds Of
such subsidiary companies"