Show DARK DONGS BY I THE N PllGiOftS P Investigation Reveals Some Very Olever Financiering NEW FACES WERE SEEN IN THE COURT ROOM I Some Startling Testimony Given By Edcs A Witness Who Fails to Remember Certain Deals Because He Fails to Remember The Villsird Syndicate Syndi-cate and the Bonds Why One of the Gentlemen Interested in the Deal Did Xot Care to Testify New York May 11 Several new faces were visible in the group of lawyers law-yers directors and witnesses in the Northern Pacific investigation case today to-day Among them were C W Wright one of the Northern Pacific railroad directors direc-tors and A C Spofford president of the Rocky Fork Cook City railroad and private secretary to Henry Vii ard v1S Spofford was to have testified I yesterday but was excused on account of the absence of his counsel 1 D Searles vicepresident of the Farmers Loan Trust company was recalled and asked whether he had been able to find any record of the increased capital capi-tal stock of the Rocky Fork Cook City railroad company from 740000 to 2000000 Mr Searles said that the company had no such record and that the increase must have been made before be-fore the stock came into the companys possession Janies McNaught senior counsel for the receivers stated however that he had the minutes of the meeting of the stockholders and directors at which the increase was authorized and was ready to submit them at any time The dates of these meetings were April 5 1889 and May 4 1889 Edes on the Stand Edward Edes secretary and treasurer treas-urer of the Rocky Fork Cook City company was replaced on the stand C W Wetmore president of the North American company asked permission per-mission to appear as counsel for the witness He stated that iha books of the old Oregon Transcontinental inquired in-quired for yesterday were among the old numbers of the North American I cOmpany He was perfectly willing to permit any of them to be produced by Mr Edes which had any bearing on I I the case under consideration but wished to be present to see that no I others were presented After some discussion as to whether Mr Wetmore should not rather appear ap-pear as a witness himself Master Carey decided to allow him to act as I counsel and the examination of TVIr Edes proceeded Er Edes procured various books of the Oregon Transcontinental I Is continental which were put in evidence evi-dence He was requested to refer to those portions of the books of the company which showed in what way it was concerned in the placing of the bonds of the Chicago North Pacific Why Bonds Were Issued After much discussion it was finally developed that when the Chicago North Pacific issued its bonds to obtain ob-tain funds for the purchase of the various va-rious properties comprising i they were deposited with the Farmers Loan and Trust company The Oregon Ore-gon Transcontinental acting as financial finan-cial agent of the Chicago Northern Pacific advanced the latter some 7000000 or 8000000 and opened subscription I sub-scription lists for the bonds As the later were paid for most of them at DO cents on the dollar the Oregon Transcontinental gave orders of the Farmers Loan and Trust company to purchasers for the delivery of the S bonds For these services as financial finan-cial agent the Oregon Transcontinental Transcontinen-tal received a commission of 3 percent per-cent At that time January 18 1890 an agreement had been made between the Northern Pacific the Wisconsin Central and Chicago Northern Pacific Pa-cific by which the latter should be formed and leased to the Wisconsin Central and subleased to the Northern North-ern Pacific The reason for the introduction I intro-duction of a temporary financial agent was mat the options for the purchase of the roads and properties afterwards after-wards consolidated into the Chicago Northern Pacific company were about to expire and it was necessary to obtain an advance of money from such an agent in order to insure them Minutes of the meeting of Oregon Ore-gon Transcontinental directors for January Jan-uary 18 1890 showing these sOwing facts were read in full They created something of a sensation as they showed that the tle plan of leasing the Chicago Northern Pacific to the Northern Pacific was ful ly understood before the formation of the former company and that it was formed for ithe purpose of so leasing it This has already been denied by the Chicago Northern Pacific people 1 These books of the old Oregon Transcontinental Trans-continental have never been before seen I by the counsel on either side until the present investigation The minutes of the meeting of Oregon Transcontinental committee in New York January 22 1890 and May 26 1S90 were also read They recited the various steps in tlss formation of the Chicago Northern Pacific and gave lists of the property held tion by that company after its form I Was a Cute Move I Throughout the minutes showed that I every step in the formation of the Chicago Chi-cago Northern Pacific was taken with the advice and instruction of the Northern I North-ern Pacific and with the intention of leasing the Chicago Northern Pacific i to the Northern Pacific Pacifc Wisconsin Central company The 20 000000 of bonds of the Chicago Northern North-ern Pacific were sold at 90 per cent and should have brought in 18000000 but only about 9000000 appeared on the books of the Oregon Transcontinen tal as havIng been received and there was nothing to show from which purchasers I pur-chasers this had come I cord of what the purchasers paid Mr Edes testified that during his work as financial agent for the Chicago Chi-cago Northern Pacific the Oregon railroad and Transcontinental railroad had borrowed some four and a half millions from the Wisconsin Central The money was paid back a few months later and the transaction is only of interest In showing the intimate inti-mate relations existing between the Northern Pacific Wisconsin Central Oregon Railway and Transcontinental railroad and Chicago Northern Pacific Pa-cific all pretty much controlled by the same parties and the way in which they loaned moneyxto each other Mr Edes said Mr Pettit 6n the list of subscribers to these bonds I find c p < c r a subscription of over 4000000 by the Deutcher bank J H S Steam Henry Villard and associates Was this subscription sub-scription ever paid I dont know replied Edes I suppose sup-pose it formed part of a lump credited cred-ited to the case Have you nothing to show that i was received Not here said Edes the checkbook check-book may show Very well replied Mr Pettit Now here is a subscription of C Io Colby for himself Mr Rockfeliow Mr Trevor Mr Abbott and Mr Colgate Col-gate for 7000000 Have you anything to show that this sum was ever paid Nothing replied the witness unless un-less the check book does so But my dear sir said Pettit you did not receive millions without making mak-ing a record where they came from Well they came from the subscribers subscrib-ers to the bonds said Edes but there is no record of separate payment by them Why He Refused Mr Spoffords refusal to testify was based upon the presumption the present pres-ent hearings were really instituted in order to obtain evidence to use against Mr Villard and others and that the circuit court of Wisconsin had no jurisdiction to institute and prosecute the inquiry and that the clerk of the district court of southern New York had not power to subpena him At the request of Mr Pettie the sub pena under which Mr Spofford was I called was read Master Carey then saying he was powerless in the matter mat-ter and that it must be referred to the United States court Mr Edes then took the stand and produced pro-duced toe cneck and deposit books of the Oregon Transcontinental which i was hoped would show who paid the money received for bonds of the Chicago Chica-go Northern Pacific The books showed the deposit of 8130356 on June 3 1890 to the credit of the subscription for the Chicago Northern Pacific bonds This sum had been deposited in five different sums in the same bank on the same day An itemized account showed these were made up of a score or more small sums Against eight of these aggregating aggre-gating 826537 were marked the letters H V This Mr Edes said meant that they were received from Mr Villard None of the other were so marked I Very Bad Memory 1 Now said Mr Pettit you have only received about half of this 18000 000 that you should have received where is the other half I dont know Well who did not pay up 4 dont know I What is your recollection My recollection IsI dont recollect Dont you remember anyone who didnt pay up No Out of the half that did pay dont you recollect anyone Yes Mr Smith Davment What is the total of Mr Villards So far as I can see here it was 826537 paid on June 2 Were any subsequent payments made on account of these bonds o Yes said Mr Edes 4334150 was paid on June 26 Who paid it I Well i was paid on account of the purchasers of the bonds but I do not know the individual payers The money so received and deposited by the Oregon Transcontinental was paid over to D S Wegg on the same day Mr Wggg being one of the trus teeis f4fetb stbtdchpldejg i 4hp va rjQiig properte then being consolidated into the Chicago Northern Pacific The Search Grew Warm The search for the persons who did not pay for their bonds grew warm and the lawyers and witnesses got very much tangled up in intricate questions mostly on figures Finally Mr lIC aught counsel for the receivers suggested perhaps the records of the transactions with the United States Trust company of the Chicago Northern Pacific would throw some light on the subject and asked for their production tomorrow morning The meeting then adjourned until tomorrow morning at 10 oclock Mr McNaught afterwards explained i that it would probably appear that the I missing 7000000 for the bonds had been obtained through the United States Trus company and of course would not appear on the books of the Oregon Transcontinental Some discussion took place over a pencil mark on the books referring to this matter which Mr Edes said had been made by the bookkeeeper from information given him by Edes The object of the question asked was to show that Mr Villards syndicate received re-ceived 11000000 of bonds for a nominal sum while other purchasers paid the market rate All receipts from subscribers sub-scribers were lumped and no itemized list o payments were kept so far as can be learned I was very difficult t show whether the Vlliard syndicate did or did not pay for their bonds |