Year: 1868

before JuuBe bidtCuioru.


Ruftls Hatch Us. The chicago, Rock Island ana
Pacific Rdtlroud COnapany.-After afew Introductory
observations by Mr.. O'Conor in reference to some
passages in the discussion OF the previous day. the
legal arguments were yesterday morning resumed in
this case.


Mr.. Burrill proceeded to sustain the paintif7s
case. He contended that his client, Mr.. Hatch, the
plaintiff being the owner OF seventy-fve thousand
shares, did represent the company. 1t had
been alleged that the capital stock Of the
consolidated company in April, 1867, should be
fourteen millions Of dollars, whereas he conended
that there were about eleven millions or those shares
never issued at all 1t the intention OF the
directors OF the consolidated company to extend the
road one mile beyond the city OF Des Mones toward
Iowa, and he would undertake to satisfy the court
that no such intention ever existed on the part OF
those directors. The whole project to extend the
road to the Missouri was held In profound secresy
from the shareholders OF this corporation prayed
the court to restrain the directors from issuing an
and to impound those $4,000 shares often re-
ferred to. He would undertake to satisfy the
court that 1t should interpose Its authority and
restrain the directors In the issue OF shares or the
raising Of an increase Of capital whether the legality
illegality Of their action should be established 1t
stated that the Executive Committee OF the direc
tors OF this consolidated company were five In num-
ber namely, MeSsrs Durant, Cooke, Grant, Tracy
and Dow; but he would undertake to satisfy the
court that John f. Tracy held the entire management
direction and control OF the corporation irrespective
of the presence or influence of any other person. the





issue, and they were all thrown upon the market on
one day, and thereby as counsel charged, perpetrat
realize large sums by their short sales and carry
out the system, as counsel asserted, OF fraud anu
1alseho0d by which they reaped large profits.
Mr.. Dow in reply to an affidavit or Mr.. Johnson,
made q remarkable statement that when asked as to
the amount Of the capital stock OF the company he
stated that he had entirely forgotten the 49, 900 shares
on that occasion when he was speaking with Mr..
Johnson the subject Of the capital stock OF the
corporation. After tisose $4,000 shares mad been
10 m
Executive Committee refused to give a word OF in
formation the subject; they refused to show their
books and those books were not be found either In
New York or Chicago or in the State of Illinois,
They kept all things secret they made mlsrepresenta
kept in obscurity ana ignorance on the question
of their property, and refused all explanation
by those gentlemen of the Executive Committee
or rather by Mr. John f. Tracy himself alone. He
removed those books, he closed the transfer books
and removed all those out OF the way, and beyond
the Jurisdiction of the State; he appointed new
secretary and treasurer without the concurrence or
the slightest knowledge on the part or the share
holders OF the corporation. And ne would ask, was
a board OF directors to meet when and where they
pleased, and hold their deliberations and execute
their own designs outside the jurisdiction of the
State in which the headquarters or the corporation
is situated, and do all things as they pleased. with
out the supervision of their shareholders and nde-
pendent OF law2 The learned gent eman then read
sections from the statute on railroads ana eX racS
from decisions bearing on the case, according to his
view OF things as they stand on the present motion,
and continued contending that this was not an Iowa
corporation The New York Legislature might as
well attempt to legisate with respect to this corpora


ion and declare 1t illegal for the Iowa Legislature
to declare that this stock valid. No one could
pretend that there was any power in the Legislature
of the State of Iowa over the property OF this corpo-
ration, except much OF IL as lay in that State.
This company could not issue any more stock than


1t was entitled to issue prior to the consolidation Of
both companies. Counsel called attention to the
case OF Black, cited on the motion to remand, q
case in which cooperation was formed under
the laws ,II Of Indiana and ONO: I sue; such Ia a
have any legal existence In o State except by the
laws OF the State. The manner in which the bill
had been procured by the directors In the Legisla-
ture OF Iowa to legalize their actions showed said
the learned counsel, that they were anxious to do
something to protect themselves in any manner they
could. Counsel then advered to the question OF the
removal Of the books Of the company from New
York. 1t was done, he stated without the consent
of the Executive Committee, and the testimony went
to show that Mr.. Tracy had attended q meeting OF
the books to be removed by the secre-
tary. He contended that Tracy never con-
the company, and seemed to do with them just what
he pleased This was an action brought by parties
representing the shareholders to investigate the con-
duct OF the Board OF Directors While Mr.. Burr was
stating the question OF jurisdiction OF the court Mr.
OConor said that there utter want OF capacity
IN the court to give relief with respect to the alleged
r said that they were not seeking to punish this
corporation for any alleged criminal offence. They
merely seeking to recover property, and II he
now In the courts Of Iowa he could not get the
relief his Honor could give them Suppose he went
TO Iowa; he would on0 find freight depot and a
road; but he found no board OF directors there-no
President there. Then he might be told To 20 to li
nois. But there no board Of directors there
either. And was he to be told that the laws of the
State could not reach the board, who ut william
street. in New York city, conducted the business Of
the company? He denied that, because corporation
created in the state OF Iowa, where 1t had no
property, 1t could not be reached in another State,
where its business conducted and its board OF
directors sat and held their meetings.
The arguments had not concluded at the rising OF
the court.