Kingsbury County independent. (DeSmet, Kingsbury County, S.D.) 1894-1929, 1910-02-18
DRAKE
ALLEGED GOAT IN
FINANCIAL TRICF
Story of Sale of Three I"
Road, Told for First Time,
Proves Interesting.


-
Chicago, Feb. 1l.-Financiers and rail.
road men OF national reputation are in
volved in a dazzling tale OF high
finance" told in a brief which Otto
| Gresham, as administrator OF the es-
tate or John S. Cooper. filed in the
appellate court.
The brief reveals for the first time
what is said to be the inside story OF
the sale OF Indiana, Illinois and Iowa.
or the Three Us railroad. The plain
tiff. defeated in the lower court in a
suit for fees claimed by the Cooper es-
tate, draws n picture in defense of his
case by which he hopes to obtain re-
versal Of the adverse decision OF the
trial judge.
Characters in Plot.
The dramatis personae are:
Theodore p. Shonts, former chairman
Of the Panama canal commission, and
now president of the marlborough sys-
tenn OF New York.
Francis M. Drake, Shonts' fatherin-
law, one time owner of the Three Us"
railroad, and former governor of Iowa.
JOY Morton, president of the Inter-
national Salt company, brother OF Paul
Morton.
Paul Morton, former secretary OF the
navy, n now president Of the Equic-
able Life Assurance society.
William G, Brown, president of the
New York Central railroad.
Robert Mather. former president of
the Chicago, ROCK Island & Pacific
railroad.
John S. Cooper, Chicago attorney.
Details of Service Demanded.
The last of these, though dead, is in
many ways the most important, for fees
alleged to have been earned by him
In the Three Us transaction are the
basis of the suit.
The declaration filed in the municipal
court last May was dismissed by Judge
John H. Hume on October S, because
the bill of particulars failed to give a
detailed statement OF the dates on
which services were rendered. The
plaintiff admitted that Mr.. Cooper be-
ing dead. he could not supply the miss
ing information. but filed interrogation
les demanding information under oath
from the defendants. These. the judge
ruled, they did not have to answer
The case was appealed that the decla-
ration may be reinstated and brought
to trial.
Tells Startling Story.
In order to show that the defendants
pOSStSS lHItTllldkiOA VI SuCH a. CHAR
acter that they do not need a more
explicit bill of particulars, Mr.. Gres-
ham has filed his brief, telling a start
ling story Of clearing $4,000, 900 profit
on the investment for a short time of
$500, 900 of borrowed money.
The Three rs" road runs from
S~treator, ILL.,, to South Bend, Ind,
where 1t connects with the Lake Shore.
Mr.. Brown was vice president of the
latter and Mr.. Shonts was general
manager of the former read when the
sale was effected.
1t is alleged that they conspired to
divert traffic from the Three rs"
road, sending freight by circuitous
routes to and from it's stations to avoid
the use of it's tracks.
hen when the o was doing the
least possible business they are said to
have got Paul Morton to go to Center
vile, Ia, to Drake, Shonts' fatherin-
law, and buy the road from him for
IS, 1000, 900.
Drake Paid Bonded Indebtedness.
The road had 5000, 900 capital stock
authorized, of which SIS, 000, 900 had been
issued n 1000 900 was still in the
treasury. The purchasers are alleged
TO have borrowed 81, SOC, 900 by p~ledging
the whole 5000, 900 of stock. The addi-
tional $500, 900 necessary to pay Drake
his ~, 000, 900, as the brief was OBJ
tanned by taking that amount from a
fund of $500, 900 which had been earned
by the road in rebates, but which, IL
is alleged, had been concealed from
Drake, it's owner.
Drake was also required to pay off
q bonded Indebtedness of 81, 800. 900. The
81, 500, 900 borrowed from Redmond, Kerr
q CO.. is said to have been repaid i'm
mediately and the stock redeemed with
money obtained by issuing new bonds.
Gifts of Stock.
Having obtained the road, tactics are
Brown, as vice president Of the Lake
Shore, and Shonts. through gifts of
stock to traffic officials of other roads,
are alleged to have obtained all posi-
BILE traffic for the ''Theree rs" in thi
way, according TO the brief, quadrup-
ling It's business.
With it's old bonded Indebtedness
paid off, It's traffic and val
liable to the Lake Shore as a feeder.
the road, through the influence of MI.
Brown, 1t Is said, was sold to the Lake
Shore and the profit was $4,000, 900. says
the brief. And for his services in the
matter, Mr.. Gresham Is OF the opinion
thai the attorney whose estate he rep
resents earned 500, 200.
To show how little actual money was
required to finance the purchase of a
railroad system, IL is set forth in the
bill that Mr.. Brown at the time had
nothing but his salary and was &c.,
00Q i'm dpht