The San Francisco Call. Newspaper, December 31, 1901, Page 1

UYL \;. This 9 v 53 % did. OLUME XCI.— ULSDAY, DECEMBER 3 1901 MINNESOTA COURT GRANTS AN INJUNCTION | THAT CHECKS GIGANTIC RAILROAD MERGER JAMES L. FRAZIER RESIGNS POSITION ¥ AS SUPERINTENDENT OF THE WESTERN DIVISION OF THE SOUTHERN PACIFIC He Is to Take Charge of the Toledo, St. Louis and Western Road, and Predictions Are Made in Railway Circles That Vacancy Will £ ~ENT Prvrsione, SOOTHAESN S PACIFIC 1901 THIEX ENGINEER Probably Be Filled by W. S. Palmer or B. A. Worthington S SUPERINTENDENT CQKES., IO SOOTEWESTERN. = + SUPERINTENDENT OF THE WESTERN DIVISION OF THE SOUTHERN PACIFIC RAILROAD SYSTEM, WHO TENDERED HIE RESIGNATION TO MANAGER AGLER YESTERDAY AND WHO IS TO TAKE CHARGE OF THE TOLEDO, ST. LOUIS AND WESTERN ROAD. AMES L. FRAZIER, superintend- ent of the Western division of the Southern Pacific Company, with headquarters at Oakland, has tendered his resignation to his superiors in order to become the general superintendent of the Toledo, St. Louis and Western Rallway. The resignation of Frazier came as a big surprise to the occupants of the “‘yel- jow buflding” at the corner of Montgom- ery and Market streets just before the close of office hours last evening. The resignation was placed in the hands of James Agler, manager of the Pacific sys- . That Frazier would sever his relations with the Southern Pacific Company was the last thought in the minds of Agler and his associates and the withdrawal of | he popular official created quite a sen- ation. The news spread rapidly through e various offices and was discussed gerly by those who heard it. No action s taken by Manager Agler on Frazier's signation, owing to the late hour at h it was received. The subject naturally caused consider- Jle surmise as to the probable successor f Fragier to the important position from hich he has resigned. ctions were made last evening in cllow building” that e succeeded by Warren S. Palmer, su- perintendent of the Sacramento division, ¢~ by B. A. Worthington, superintendent the coast division, both of whom are considered to be among the most efficieat rallroad men in the country. In the resignation of James Lewis Fra- zier the Southern Pacific Company will dose one of its valuable men. He was Frazfer will , born in Staunton, Va., in 1849, and grad- | uated from the University of Virginia as & civil engineer in 1870. He began his ca- | reer as a rallroad man in 1873, acting as assistant engineer on the extension lines of the Chesapeake and Ohlo road. He was assistant and resident engineer of the Cincinnati Southern road from Octo- ber, 1574, to December, 1877; from June to September, 1875, he was engineer in charge of the location of the Western road of North Carolina; from December, 1878, to March, 188), he was engineer in charge of the completion of the Cincin- nat! Scuthern Railway across Tennessee; in 18% he constructed the Elizabethtown, Lexington and Big Sandy road; in 1881 and 1852 he was engineer in charge of construction for the Alabama Great Southern Railroad, the Mexican National road and the Loulsville, Evansville and | 8t. Louis road; in 1883 and 1884 he was f chief engineer and superintendent of road | department of the Chesapeake, Ohio and Southwestern road; from October, 1884, to April, 15881, he was superintendent of the Western division of the Newport News and Mississippl Valley Company. In August, 1891, Frazier was brought to the Pacific Coast by the late Collis P. Huntington and was made superintendent of the Truckee division of the Southern Pacific Company system, with headquar- ters at Wadsworth. In August, 1892, he was promoted to the position of superin- tendent of the San Joaquin division, and in November, 189, was made superintend- ent of the coast division. Mastered Details, Made Friends. | For six years Frazier was in charge of | the coast division, making his headquar- ters at Third and Townsenggtreets, mas- tering every detall of his department and making hosts of friends. In October last Frazier received further promotion. When J. M. Herbert resigned his position as manager of the Pacific sys- tem of the Southern Pacific Company James Agler, superintendent of the west- ern division, succeeded him. Agler in turn was succeeded by Frazier on the western division, who added to his splen- did record by close attention to affairs. In assuming the duties of general super- intendent of the Toledo, St. Louis and Western road Frazier will have charge of 500 miles of heavy travel between Toledo, Ohio, and St. Louls, Mo. The post he will fill has for eome time been tempor- arily looked after by B. R. Stephens, Warren Sherman Palmer, one of the men who is likely to succeed Frazier as superintendent of the western division of the Southern Pacific Company, is a vet- eran in the service of the corporation. He is a clvil engineer by profession and grad- uvated from the State University in 1876, In that year he entered the employ of the Central Pacific road as an apprentice in the bridge and building department, and has served in the capacity of Jjourney- man, bridge carpenter, draughtsman, rod- man, transit man and chiet of party on location and construction work. From 1885 to 1890 he was a member of the firm of Palmer & Story, engineers and contract- ors, during which time he served as chief engineer of the Yreka road, the Colusa and Lake road and the Pajaro Valley road. In December, 1530, he was made resident engineer of the maintenance of Continued on Page Two. BALKS PLAN OF HILL AND ISSOCIATES Order Prevents Retiring of Northern Pacific Preferred. Judge Grants the .Applica- tion of a Holder of the Stock. Case Involving the Proposed Consol- | idation of Three Systems Will d | pr Be Fought Out in | the Courts. Simultaneously with the con- -vening of the Governors of | Northwestern States to devise | means to defeat the proposed e s > JOHY D LoNG SESY oF 7yE “,‘_ ANAV Y. | | consolidation of the Great | Northern, the Northern Pacific { and the Chicago, ‘Burlington and Quincy railway systems = | | Minnesota Judge has granted an injunction restraining the retircment of Northern Pacific preferred stock. The case is now fairly in the courts and || will be fought to a finish. The retiring of Northern Pacific preferred stock was one of the first moves necessary in the | merger scheme, and upon the | | outcome of the litigation will depend the success or failure of | the gigantic consolidation pro- ject of James J. Hill and his | associates. The suit for an in- junction was brought by one of | | the holders of Northern Pacific preferred. e = 3 . INNEAPOLIS, Dec. 30, Judge Elliott of the District | County | to-day granted a temporary order restraining the officers of the Northern Pacific Com- | pany from retiring the preferred stock of the company. The order was issued on the application of Peter Power of New York, who hdlds 100 shares of the com- mon stock. It was supposed that the failure of the action brought in the New York courts by holders of stock cleared away the. last obstacle to the retirement of the preferred on Janu- ary 1, leaving the Hill interest in con- trol of the road through its majority of the common stock. It is inferred, al- though it does not so appear, that the present action is brought in behalf of the Harriman interest to prevent vassing out of its hands for another 1 ‘ Court of Hennepin | | r, ern Securities Company is settled. The claim set up by Power in his suit is that the retirement of the preferred stock Is in violation of the agreement that such retirement would lay no ad- ditional burdens upon the common stock, and he holds that the certificates of de- benture bonds to be issued to effect the retirement of the preferred would become @ lien upon the common stock and thus work an injury to his property. It is understood that the block of 100 shares beld by Power is the only block of com- mon not controlled or definitely located upon one side or the other—the Harri- man people or the Hill-Morgan interest. Terms of the Injunction. The injunction restrains the Northern Pacific Railway Company from issuing or selling any certificates of indebted- ness or debenture or other evidence of indebtedness, or creating any indebted- ness or liability for the purpose of rals- ing money with which to pay or retire the preferred stock of the Northern Pa- cific Company, or any part thereof, or from using or appropriating any moneys or proceeds other than the ordinary or surplus net earnings of the Northern Pa- cific Company to the payment and retire- ment of the preferred stock of the com- pany, or any part thereof; and also from creating any indebtedness or lability other than the ordinary indebtedness and liability for the operating expenses of its railroad system, and the indebtedness and liability now existing which would be a preference or take precedence of the common stock of sald company; also from placing its property, or any part thereof, or the management of its rafl- way system or any part thereof, in the possession or under the control, elther Girectly or indirectly, of the Northern Securities Company; or from entering into any agreement or arrangement either directly or indirectly through the me- dium of the Northern Securities Com- pany or otherwise with the Great North- ern Rallroad Company, the Chicago, Burlington and Quincy Railroad Com- pany, or either of them, for the purpose of causing the railway system owned and controlled by the Northern Pacific Company to be operated in connection with or under the same rules or by the same authority as the Great Northern Ratlway Company and the Chicago, Bur- lington and Quincy Railway Company or either of them; or from entering into any agreement with these companies, or either of them, for the purpose of avold- m§ competition and fixing rates for the preferred | control | cr until the legal standing of the North- | 3 ALL BUREAU, 1406 G STREET, N. W. WASH- | INGTON, Dec. 30.—In well informed eircles the opinion | | grows that Secretary Long's | retirement from his position | as head of the Navy Department is slated | | for no distant day. This is not because @ iimiriimfedefeffnfdefoesfelufuledol @ | carriage of freight and passengers upon cither of their lines of railway. Hill’s Consolidation Scheme. The petitioh recites briefly the history of the Northern Pacific Railroad and the | division of its stock into common and preferred. It is alleged that the only dif- ference between the preferred stock and the common stock was that the preferred stock was entitled to the 4 per cent divi- dend prior to anything being paid on the common stock and the bill in this connec- | tion alleges that the preferred stock was | subject to be retired at any time within | twenty years after the time for reorgani- zation of the company and the issuing of the stock out of the surplus net earn- ings of the company and not otherwise; | that in other respects the rights of the | preferred and common stockholders were | identical. g The bill next recites the organization of the Great Northern and the Chicago, Bur- lington and Quincy lines and alleges that the Northern Pacific Railway Company and the Great Northern Railway Com- pany are parallel lines to the Pacific Coast and the Chicago, Burlington and Quincy Railway Company has a parallel line from Billings, Mont., to Chicago, and that all such lines are competing lines for the business qf the Northwest. It is alleged that the officers of the Northern Pacific Rallway Company dur- ing the last summer and since the plain- tiff became the owner of this stock, and without any knowledge on his part, went into a combination with the Great North- ern and the Chicago, Burlington and Quincy, the purpose of which was to con- centrate and consolidate the three systems under one management, and, knowing that it could not be legally effected, the direc- tors of the three companies, for the pur- | pose of doing indirectly what they could not do directly, caused to be organized the Northern Securities Comnpany, a New Jer- sey corporation with a capitalization of $400,000,000, which, under its charter, was authorized to purchase and hold stocks, bonds and securities of other corporations, the intention being to cause a majority of the stock of all three of the rallway com- panles to be transferred to the Northern Securities Company, and to be controlled by it, thereby controlling the three sys- tems of railways through the medium of the Northern Securities Company, sup- pressing competition, regulating the tarift rates and conducting the entire business of the three systems as one corporation. It is further alleged that thereupon the Northern Securities Company proceeded to advertise publicly, upon terms of ex- change, all the stock of the Great North- ern Company and that the whole scheme was illegal, in violation of the law of this State and the other States through which the railway lines pass, against the pubilc laws of the United States and of each of the States. g The bill also alleges that under and by virtue of the charter of the Northern Pa- cific Railway Company and under the pro- visions of the reorganization agreement, the preferred stock can be paid for and. retired out of the net surplus earnings e SECRETARY OF THE NAVY LONG MAY RETIRE FROM ROOSEVELT'S CABINET SOON AFTER THE FIRST OF THE YEAR Well-Informed Circ'es in Wash'ngton Believe the Date of His Resignation Is Near and That Charles H. Allen of Massa- chusetts Is Certain to Becom¢ Chief of the Department — of any friction between the President and the Secretary, but the resignation of the Secretary will result from an understand- ing ,he had with Mr. Roosevelt immedi- ately after the latter’s succession. Dur- ing the lifetime of President McKinley the Secretary of the Navy yielded to his friendship for the Canton statesman and postponed the date of his retirement, al- though it had long been known that he sought the opportunity to quit public life, When Roosevelt entered the White House he and the Secretary of the Navy reached an agreement as to the date of the lac- ter’'s withdrawal from the Cabinet. The date of the change has not been an- nounced, but no one will be surprised if it comes early next year. There appears to be little doubt in offt- cial circles that Charles H. Allen of Mas- sachusetts will be Long's successor. As Assistant Secretary of the Navy and later as Governor of Porto Rico he made an enviable record, and rumor connects no other name with the navy portfolio; in fact, a Senator close to the President has said that Secretary Long's successor would be a New England man and inti- mated plainly that Allen was the one President Roosevelt had in mind. % o+ CHIEF OF THE NAVY DEPARTMENT, WHOSE EARLY RETIREMENT IS EXPECTED., AND THE MASSACHUSETTS MAN WHO IS SLATED FOR THE CABINET POSITION. i = — of the Northern Pacific Rallway Company and not otherwise; that notwithstanding these provisions, the directors of sald company, for the first step of carrying out their plan of transferring the control of the defendant corporation to the Northern Securities Company, have served notice upon the holders of the preferred stock that on January 1, 1902, they would retire such preferred stock. The bill alleges further that since its reorganization the Northern Pacific Com- pany has conducted a successful and profitable business and has paid 4 per cent on preferred stock and is now pay- ing 4 on the common out of the earnings, after paying the fixed charges and the operating expenses; that there is a fund of about $3,000,000 set aside to secure pay- ments of dividends on preferred stock and between $2,000,000 and $3,000,000 of a general surplus; that it has.now on hand exceeding $3,000,000, derived from the earn- ings of the road,-wherewith to pay the $75000,000 of the preferred stock at par, but that in order to retire such preferred stock the directors of the company are threatening to issue and sell certificates of ' indebtedness or debenture bonds amounting to $75,000,000 of the Northern Pacific Rallway Company and out of the proceeds pay off the stockholders of ‘the preferred stock at par January 1, 1902, It is alleged that the Northern Pacific Rallway Company has caused to be sent to each of its preferred stockholders a notice that it would retire the whole of the preferred stock at par on the first day of January, 1902, and that the trans- fer books of the company were closed on Tuesday, December 10, 1%01, at 3 o’clock, for the retirement of the preferred stock, as aforesaid. The petition alleges that it is proposed — to substitute for the present preferred stock, which In no way constitutes a lien on the property of the Northern Pacific Company and is not a charge against the earnings of the company, and has no prior right over the common stock, ex- cept in priority of dividends, a converti- ble negotiable security or debenture bond, bearing interest at the rate of 4 per cent per annum, which sald amount of 4 per cent per annum is a fixed charge against the earnings of the company and its prop- erty and must be paid whether the earn« ings for any year amount to 4 per cent on sald issue of convertible certificates of indebtedness or debenture bomds or not, and under which, if default is made 'n the payment of said interest or any payment of the principal when due in 1907, or at any time prior thereto, un- der the provision of said certificates of Indebtedness, or debenture bonds, the en« tire property of the Northern Pacific Railway Company may be sold to satisty the judgment or judgments which may be obtained thereunder and all equities and rights of the common stockholders extingulshed. The bill sets forth that the scheme has already provoked litigation. which is now pending, and plaintift swears that by rea. son of public criticism other serious litiga- tion will be instituted unless the defendant railway company be enjoined from carry- Ing out its illegal scheme and design, and in this connection it ig alleged that pro- ceedings are about to be Instituted agaln®t the Northern Securitles Company. th® Northern. Pacific Raflway Company. th® Great Northern Company and the Chi- cago, Burlington and Quiney Rafiway Continued on Page