The Bridgeport evening farmer., 1909-06-09
FRAUDSCHARGED TO TRACTIONCO..
City of Waterbury in Suit Against Con. necticut Company Claim $559, 900
 Was Paid for $5O,000.
A. M. Young and Fellow Directors Charg. cd With Having Paid Bonds Over to Themselves as Directors of the Flee. trical Association.

LII h SQDolllQtS0 COIUpIdlHI lO p0
 filed by counsel for the city of Wa terbury in its action to recover cer-
 tain moneys from the Connecticut Company by reason of an agreement
 made years ago, allegations of fraud and wrong-doing are made against the old Waterbury Traction Company and it's successors. The case rests on an agreement by which the company was to pay the city per cent. of the ex- cess receipts of the company after it had paid it's stockholders and bond holders 6 per cert. The action is de- scribed by the Waterbury American as follows:
 '.In the proposed substitute com plaint allegations are made that the Waterbury Traction Company and it's successors wrongfully, fraudulently and illegally increased their capital stock and issued bonds for the purpose of preventing and hindering the city of Waterbury from getting any of the earnings of the company. There has been talk of this kind frequently, both in political campaigns and in the Gen eral Assembly, but this is the first time that the matter of alleged water ing of stock has come into the Superior court and it will be Interesting to watch the outcome.
 According to the new complaint the Waterbury Traction Company in 1893 ioCucQ SouVVVO WOILIl OI JULIUS etiio O year later increased its stock from $50, 900 to $500, 900.
 "A feature of interest in the new complaint is the allegation that trical Association, Inc, agreed to fur nish labor and material for the cleo trical lines in Waterbury. The ma jority of the stock of the Waterbury citation was owned by the same men, it is claimed, A. M. Young, Charles H. Newhall, John c. Bartlett and M. P. C1ough. In consideration of the labor and materials the Traction Com pany, it is claimed, delivered to the Electrical Association $5590O of the $500 900 issue of bonds above men toned This association, it is further alleged, was not a manufacturer of materials for use in eQuipping cleo in purchasing material and employing labor for the Traction Company. The same directors of the Traction Com pany who issued the bonds were the Association, so If these a1legaf1ons are true the directors could have fixed the contract up in a. single morning.
 ''It is claimed that the actual cost of equipping the lines with electricity as the motive power did not exceed $50,- 000 although the Electrical ASsocia- tion got it's half million dollars worth of bonds for the work. As the statutes
  road company from issuing bonds to a value greater than 75 per cent of the actual cost of construction and equipment of the railroad, it is claim ed this agreement was illegal and void. The total cost to the Traction Com pany of its railroad lines down to the of motive power to electricity did not exceed $1O0. 900, it is claimed, which, added to the 5000o above men, toned, would make a total cost of con- struction and equipment of $150O00.
 'Yet in spite of this, the complaint goes on the company represented to | the public and the city that the cost | was $559, 900.
 "The complaint tells of the various issues of stocks and bonds later by the | successors of the Traction Company | and claims that the gross receipts an nually from the Waterbury lines are s1, ,00O, GOO.
 sIn it's petition for judgment the complaint asks that the court ascer- tain and determine the amount act 1ally invested in the stock and bonds ,f the Traction Company and also de- termine whether the various issues of stocks and bonds were legal or illegal | Under the prayer for judgment it is possible that the court will go into all | the intricacies of the various deals af- 'ecting the trolley. lines of Waterbury and perhaps of the lines outside"