Railroads -- United States; Railroads -- United States -- Finance
The temporary securing of their position by the receivership allowed
the Danville people to hit back at the Central in its weakest point—
the details of the sale to the Terminal of the Georgia Central Company.
On August 19 the Advisory Committee of Seventeen of the Terminal
securityholders declared that the investigations of their sub-committee
showed that certain trustees of the company, with their friends, had
profited to the extent of between three and four million dollars in
this operation.[371] Toward the end of the year tender of the Georgia
Company stock and bonds was made back to the original vendors and was
refused.[372] In December suit was begun to set aside the purchase on
the ground that there had been no ratification sufficient in law or
equity to bar the stockholders from cancelling the transaction. The
plaintiff charged that “the said combination and plan so formed by and
between its president and divers of its directors [referring to the
purchase of the Georgia stock], confederating with the other syndicate
defendants for the purpose of selling their unsalable and discredited
securities to the plaintiff at such prices as yielded them an enormous
profit and necessarily imposed on plaintiff a heavy yearly loss,
was contrary to equity and good conscience, and that the pretended
contract dated October 26, 1888, ... and all the acts done in pretended
purchase of the stocks and bonds of said Georgia Company ... and the
taking from the assets and money of the plaintiff of over $7,000,000
cash ... to put into the pockets of the said faithless directors, the
syndicate defendants, and their confederates, were all acts planned
... and performed by said Inman, or under his direction, in the
execution of such original fraudulent scheme, combination, purpose, and
confederacy....” And so the plaintiff prayed the court to decree the
contract of purchase void.[373]
These accusations and counter-accusations, justified though many
of them were, had little direct bearing on reorganization. In this
progress had completely ceased. At the same time some progress was
urgently required. The Richmond Terminal, the Richmond & Danville, and
the Central of Georgia were in the hands each of a different set of
receivers, unpaid interest was piling up, and the year 1893 was to show
a marked decline in earnings. Necessity and mutual distrust dictated a
second appeal to Drexel, Morgan & Co. to undertake the rehabilitation
of the property. On February 2, 1893, the following letter was
addressed to the firm in question:
Messrs. Drexel, Morgan & Co.,
Public-domain text, read in full here on John Shaqi.
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