The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-08-21
RECEIVER GETS
THE WALSH ROAD
Southern Indiana Company
Unable to Raise Money
to Pay interest.
PROCEEDINGS KEPT DARK
ANTAGoNiSTic CREDITORS ARE
GIVEN NO OPPORTUNITY.

Chicago, Aug. 20.-Federal jurisdic-
ton now extends over the Southern In
diana Railway company through the
appointment of receiver in the United
States circuit court for the road. which
has long been regarded as the best of
what are known as the John r. Walsh
railroads.
On a petition presented by counsel for
the First Trust d Savings bank of Chi
Cago. the representatives of the Chica-
go clearing house association. Judge
Christian G. Kohlsaat late last night
appointed NJ. ]. Carpenter, formerly
president of the Chicago & Eastern IL
linois Railroad company, receiver Of
the Southern company.
Failed to Pay interest.
Failure to meet the interest on the
bonded Indebtedness of the road was
the proXimate cause of the petition
and the court order. For months there
have been rumors that a receivership
was the only solution of the financial
difficulties of the road, which were
actuated by Industrial depression which
made II difficult to pay operating ex
penses.
The Southern Indiana was the first
railroad acquired by John r. Walsh in
extending his banking business from
banking lines to a wider financial eX-
pansion, and the money used TO develop
the road and finance the other railroad
enterprises formed a large part of the
charges In the trial which preceded the
conviction of the aged banker on
charge Of misappying the funds of the
Chicago National bank. of which he
had been president.
Amounted to Millions.
The receivership which now covers
the Southern Indiana road alone will
probably be extended to take in the
Chicago Southern Railway company,
which was designed to connect the
Southern Indiana road with Chicago.
motion asking for an extension of
the receivership has been presented to
the federal court. and will be argued
on Saturday. Southern Indiana trou-
bles recall 10 those who have watched
the Walsh enterprises the spectacular
closing of the Chicago National bank
Dee. IS. 1905. after n long session of the
directors of the Chicago clearing house
who had been notified by National
Bank Examiner Bosworth that excess
sive loans had been made from the
bank of which Mr.. Walsh was pres
iNtiAN. W lLlt ldliiOtuH Ill WI lltIl ne W uS
largely interested.
Criminal Action.
The aggregate Of the loans amounted
into the millions. The three railroads
principally named in the court proceed
ings which followed were the Southern
Indiana. Illinois Southern and the Wis
consin & Michigan Railway companies
Through the roads and the feeders pro-
g.. Il a. Ia
trial Of Mr.. Walsh for misapplication.
he designed to become a power i'm the
railroad world.
The Southern Indiana road tapped
the Bersford stone quarry, one of the
best paying ventures held by Mr.
Walsh.
One of the strong points made by the
government attorneys in their arguments
before the grand jury which convicted the
former banker was that the Chicago Ma
tional bank and the Home Savings bank.
as well as the Equitable Trust company.
which were practically controlled by John
r. Walsh. had been drained of funds to
supply money with which TO develop the
railways. Mr.. Walsh on the witness
stand declared his belief that the roads
were good business propositions and that
his Judgment in investing money in them
would be supported.
In the adjustment which followed the
long days OF investigation preceding the
trial in the federal court last fall, num-
Der of notes OF the Southern Indiana road
was given 10 the clearing hOnse assOcia-
ton and these were the basis on which
the petition for the appointment of re-
ceiver based.
Receivership Necessary.
The petition on which the receiver was
appointed cont<cns no reflection on the
operation Of the road by John r. Walsh
and the compliments assert that court
action was necessary 10 preserve the
or. dit and resources of the road, which
has suffered from the Industrial depres-
sion which followed
The Southern Indiana railway is the
holder of all of the stock of the Chicago
Southern Railway company, which was
designed 10 permit the Indiana road to
enter Chicago.
The action in Chicago was simultaneous
with the filing Of a similar bill in the
western federal district at Danville. H..
and IN the district Of Indiana, at In
The appointment of z. 9. Ritsher. who
has been long retained as counsel for Mr..
Walsh. as attorney for the receiver. is
pointed to as proof that the receiver
ship is satisfactory TO Mr.. Walsh and
his interests as wen as To the clearing
house and other creditors.
Proceedings Kept Secret.
An unusual feature OF the court pro-
ceedings was the secrecy employed. The
petition on which the receiver was named
was taken late at night 10 Judge Kohl
saats home and a deputy clerk OF the
court was summoned to transcribe the
order The silence was 10 forestall any
attempt OF antagonistic creditors to begin
foreclosure suits which would hamper
the adjudication OF the whole properties.
Not until ate in the day. when the three
actions ia the different judicial districts
were we'll under way and the intervening
petition OF the Chicago Southern road had
been filed, was information given out of
the courts order taking over control Of
the road.
TIE Southern Indiana road was organ
Anal "a