The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1918-01-08

John l. Beggs, and the United Rail
| ways Company Of st. Louis.
| Plea Not in Collision.
A statement is contained in the
| is not in collision with the United
| ton is made to the effect that "the
preferred stock shall be entitled eacL
year to dividend Of 5 per cent on
the par value thereof" and shall be
cumulative.
"By virtue of said agreement your
orator and all other holders of said
shares of preferred stock had and
| have a specific interest in the net
earnings of defendant railway" says
the petition. "and the right to insis.
that they shall not be directly or in
directly deprived of any profit and
said dividends, except for such pur-
pose and in such manner as Is lawful
and necessary for the benefit of de-
| PENDANT railway.
THAT 1t was and is the duty of the
officers and board of directors of de-
| PENDANT railway and each of them not
| to contract liabilities nor to dispose
Of the assets of defendant railway in
any manner as to impair it's net earn
ings, except in the legitimate manage
| ment Of its affairs. and to manage
| its finances to the advantage of the
railway. but that Notwithstanding the
duties of the officers and lessees Of
defendant railway in the premises.
the defendant officers and directors
| therein have caused the railway to
| incur and assume unfayorable and
extravagant contracts and to encour-
| age and permit extravagant expendf-
| ture and loss Of revenue without any
| valuable or adequate consideration
| to defendant railway, but to the dis
advantage of said company and OF
the stockholders therein and to the
advantage of the hereinafter de-
scribed one interest"
Then the petition recites that the
company is burdened with excessive
and unsound financial arrangements.
that it faces heavy bonded obligations.
| that its claim and legal departments
are expensive, that it pays too much
| for It's electrical power, because OF
which conditions it can not pay its
taxes. Recital is made of the fact
that the company had been successful
prior to 1910, had earned large
profits" and had paid annual divi-
dends.
! The charge is made in the petition
railway company, which has inter-
locked with the boards of directors
| of the power companies, "at all times
| hereinafter mentioned were working
| in harmony and were working III
concert with the object of acquiring
and maintaining control of the oper-
alton and finances Of the railway" 1t
further is charged that they were
concerned in and each had an interest
prejudicial to the interests of the
defendant railway and of it's prefer
red stockholders" and that occupy
! ing said dual and interlocking posi-
lions in the several defendant COM
panies required the railway to pur-
chase electric energy from said other
companies" for a term of ninety-nine
years when the railways company
| owned its own power plants.
! 1t Is claimed that the power con-
tracts compelled the company to pur-
chase about 42.400 kilowatts or more
I per day over and above the capacit..
of its own plants, which was placed
at $1,000, a total of 7S,400 kilowatts.
1
pany discontinued the operation and
development Of it's own power. Now.
| it claims, one-half Of the power Is
taken from the Electric Company OF
Missouri and large part Of the other
one-half from the Union Electric.
The consumption Of the railways com
pany was placed at $4,000 kilowatts.
At the time of the contracts, which
| are given as October 26, 1908. with
| the distributing company, and Do
cember, 1909, with the Union Electric,
| 1t is claimed in the petition that the
! railway company's power plants were
worth $2,OO0,00O. AS a result Of the
contracts, the petition says, power
costs many hundred of thousands OF
dollars more.
The petition. which is 10000 words
in length, recites that w. v. N. Powell
son, director of the United Railways
and president and general manager
became identified with the Keokuk
dam after resigning his st. Louis in
/ terests. A contract was made with
the distributing company for 644,544
kilowatt hours for $1,O7s,20O per an
mum. OF this, the petition charges,
the railway is sold 294,771 kilowatt
hours Of electric energy at s6S7.5
1 for each of the first five years. After
that period the basic price is to be
the cost of mine run coal In Illinois.
| Cost Of Power Uncertain.
The board of directors said, ac-
cording to the petition, that the cost
of power is less than $25 per horse
power per annum, but as matter or
! fact it is in excess of $41. For II
the distributing company pays $50
The $25 cost is said to be 4.6 mills