The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1915-07-09
STOCKHOLDERS SAY
ROAD PROFITABLE
In Their Resistance to Application to
Have keokuk and Des Moines
Turned Back They Make
Several Claims.
SITE TERMS OF LEASE
Receivers In Their Application Claim
Road Is Doing Its Best and
Could Not Be sti-
muIated.
SITE TERMS OF LEASE

Denial is made by the stockholders
Of the Keokuk and Des Monies rail-
way company. that the road canhot be
| profitably operated by the receivers
| under the present lease, in their ac-
ton filed in the district court of the
United States for the northern dis
trict of Illinois, asking that the road
be not turned back to the stockhold-
ers.
1t is claimed ny these respondents,
Henry !. Clark, Herbert II. Clark and
Josiah H. Clark, members Of the firm
Henry Clark and Co., Ada H. Clark
and Abraham Sartorious and Samuel
Einstein. that the road can be oper-
ated profitably and would yield large
revenue over and above the rentals.
A copy of the petition filed by H.
u. Nudge and j. NJ. Dickinson has
been received here, together with the
answer of the stockholders. In this
answer the stockholders say:
Claims Of Mismanagement.
IF it be fact that the operation
of the Keokuk road under such lease
is shown by an examination Of the
earnings and expenses of the Keokuk
road to have been Improbable, as
alleged by the receivers. such fact Is
due to the unjust methods of accou.it-
ing OF the Rock Island road and to
the waste and mismanagement in the
operation Of the Keokuk road. and in
the unjustifiable diversion of BUSH
ness from the Keokuk road shown in
said complaint
Your respondents do not admit
that the Keokuk road is of more ad-
vantage to the defendent and its re-
ceivers than it would be to any other
railroad system with which it con-
meets or might be connected.
Liable to Damage.
Your respondents further show
that by reason of the said waste, mis-
management and diversion of bust
ness the said defendant should the
receivers be permitted to renounce
said lease and to discontinue opera
tons Hereunder would be unable to
surrender to the Keokvk road its rail-
road. bridges. buildings. equipment
and other property in as good condi-
ton as when It received same at the
Va t2lo ICA - "a cAAN
lease.
Your respondents further show
that under the provisions of the afor-
said lease the defendent has guaran-
teed the prompt payment Of each and
every one OF the coupons attached to
outstanding bonds OF the Keokuk road
by direct endorsement on said bonds;
that the amount of said bonds out
standing and in the hands of innocent
holders is s2,75O,00O, which bear in
terest at the rate of five per cent per
annum; that the said holders of the
coupons of the bonds OF the Keokuk
road would have cause for action
against the defendent to recover dam
ages for the breach OF the defendants
guarantee thereof.
Some More Allegations.
Your respondent further shows
thke under section of article 2. OF
the provisions of the aforesaid lease
tie defendant is obligated to make all
necessary alterations and repairs
and that It will suffer no act
which will operate to impair the
rights and franchises OF the Keokuk
road
Your respondent further alleges
that defendant has failed to
maintain or replace the equipment OF
the Keokuk road"
The Receivers Side.
In their petition respecting the Keo-
kuk and Des Moines lease, in which
Jacob II. Dickinson and H. u. Nudge
ask that the road be separated from
the Rock Island, the receivers say
that the rentals to be paid by the
Rock Island to the Keokuk road in
cluded not only % percent OF the
gross earnings realized from ~. oper-
alton OF the mileage OF the keokuk
road, but included certain additional
sums. The petitioners in paragraph
six Of their petition state the follow
ing:
Your petitioners are also not ad-
vised whether the provisions Of said
lease, pursuant to which the Keokuk
road and the holders of It's securities
I became and are now entitled TO 5~r-
tcipate in certain OF the earnings OF
the defendant not derived from or in
connection with the Keokuk road are
or may be adjudged unlawful under
the act Of congress known as the
sherman act; but yonr nett.
TONERS submit that such questions
may arise in connection with the pro-
visions of said lease whereby the