The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1910-09-24
Suit Filed Today at Logans-
port. in Cass Circuit Court,
at the instance Of Governor
Marshall.
A FRAUD ALLEGATION
MADE IN COMPLAINT
Alleged Certificate Of Incorpor-
alton Was Obtained from
the State Through False
Representation.
,Amcrican News Service,

,Amcrican News Service,
Logansport, Ind. Sept. 24.-Alleg-
ing that the organization Is not a
bonaflde corporation of Indiana that
its directors are all non-residents OF
Indiana and that the concern Is a
stock jobbing proposition. suit was
filed In the Cass county circuit court
today at the instance OF Governor
Marshall asking the appointment OF a
receiver for the Chesapeake and Ohio
Railroad Company OF Indiana and re-
vocation Of It's charter. The corpor-
alton was formed a few months ago
to take over the property of the Chi.
cago, Cincinnati and Louisville rail
way. which was sold for $6,0O0.O00 by
Receiver Goodrich on the federal
courts order.
The Chesapeake and Ohio Railway
Company OF Indiana recently filed
mortgage for forty million dollars In
favor OF the Mercantile Trust Com.
many Of New York.
Dissolution 10 Asked.
Dissolution Of the organization il
asked for on the grounds that It OBJ
tained certificate Of Incorporation
from the secretary Of state on false
ssprssentation and that It was form
"a for fraudulent purposes.
The mortgage given to the Mercan-
tile Trust Company, covers all the
property alleged to be held by the
corporation. but which the suit al.
leges 10 actually held by the Chesa-
peake ana Ohio Railroad company, .
foreign corporation. Copies Of the
mortgage were filed In all the coun-
ties Of Indiana through which the rail.
road runs. including Wayne county.
The complaint alleges that the pur.
chase price was furnished by the
Chesapeake and Ohio railroad. for
eign corporation. which could not &C
quire and hold property In this state
under Indiana laws. and that said cor.
poration connived and assisted In the
formation Of the c. and o. Railroad
Company of Indiana, to which the
property was transferred by the par
ties, who bought It at receivers sale
from Goodrich. This. the complaint
declares. was merely IN evasion Of
the Indiana laws.
Regarded ~ . Blind.
The road cuts diagonally across
state from Cincinnati to Chicago pass.
ing through Richmond. Muncie. Ham.
mond and other towns. Upon this
stretch Of railroad the mortgage will
cause the issuance Of approximately
100000 worth Of bonds per mile. The
entire road was sold at foreclosure re.
Gently for approximately $6.0O0.00O,
The Incorporation of the road under
its new name and subsequent actions
are regarded by the state as a blind
for interruptions financial operations
II 10 believed by the states attorney
that the road bearing such an indebt
edness would consider itself entitled
70 excessive freight rates and also
would have . plea for reduction oi
taxes. But these are only incidental
claims.
BY issuing the mortgage or trust
deed. the right Of way and all property
OF the road was transferred to the
trust company In New York to secure
the payment Of the Issue of $4,000. .OO(
worth of bonds. II Ia now claimed
that the road IL in the hands of the
same directorate as that of the regular
Chesapeake and Ohio company. The
practical claim Of the state 10 that
the new corporation is fictitious
one.
Aan a.
reasons for his action a. follows:
"One Of the things the people have
been blowing about for . long time
is watered stocks and bonds. and nj
anyone has done so far is to talk. II
ia Hike inveighing against larceny ant
never arresting anybody who steals
II sounds nice on paper and tickles
the ear OF the people. But 1t doesn'
stop things. Two years ago tried L
get recommended to the legislature ,
revision OF the corporation laws OF In
diana so ax to prevent the watering O.
stocks and bonds. I accomplished
nothing then"
Called "custlne q Melon"
From private information and from
facts on face Of this proceeding Is NJ
effort to cut . melon. as they say OF
Wall street. II II an attempt. yer,
apparent. to permit New York trus
company boldly to pick up an Indians
corporation and carry It out Of tn,
power Of the Indiana authorities. ant
this d manifestly against the policy o
this ttata. Il was never the intention
a. the Legislators that . corporation
oeGnai1od IN this state should be re
1ovea 70 New York and permitted 4