Rogue River courier. (Grants Pass, Or.) 1886-1927, November 28, 1913, WEEKLY EDITION, Image 3

Rogue River courier., November 28, 1913, WEEKLY EDITION, Page PAGE THREE, Image 3

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Newspaper Page TextFRIDAY", XOVEMRER 28, 1913 DECREE HANDED DOV OKIFT CASE IN The decree la the Golden Drift cise (also called the Ament dam lit igation) which was decided a few days ago by Honorable F. M. Calk ins, judge of the circuit court of Or egon for Josephine county, was on Friday eutered by the clerk of the court. This decree involves more proper ty than any other decree entered in this judicial district and is probably the most Important lawsuit ever tried out in aouthern Oregon and has a far reaching effect on this commun ity, owing to its hearing on land and realty values. The' suit was brought In November, 1909, by George . Sanders, acting on behalf of himself and eastern stockholders heretofore commonly called "minority stockholders" who become, by this decree just entered, the real stockholders of the Golden Drift Mining Company. Mr Sanders furnished the Courier a statement as to the causes of the suit, as follows, to-wit: "The Golden Drift Mining Com pany started business in December, . 1901. C. W. Ament came to Grants Pass In the fall of 1901, and took an option on the 'Dry Diggings' and com menced selling stock In the city of Chicago after December 20, 1901, In February, 1902, a dividend of 1 per cent a month was paid and the stock widely advertised as a divi dend security. Four such dividends were paid In 1902 and two more In 1903. As a result of these dividends several hundred people were Induced to purchase tock at 40 cents per share, which price was shortly raised to $1.00 per share, the stockholders naturally believing that they were getting a security based on a going property operated at a large profit, which was Indicated by the monthly dividends. In this manner approxi mately $300,000.00 was by the stockholders invested in Golden Drift stock and the use of the funds In trusted to the Ament management. "In the winter of 1902-03 some mining was done by using the water of Jones creek and fabulous reports given out as to the value of the Dry Diggings. In 1903 the construction of the Golden Drift dam was start ed, ostensibly for the purpose of working the Diggings in a large way. During this same year the stockhold ers discovered tnat the Aments had organized an irrigation company called the Advance Power, Electric & Irrigation Company, which contem plated the use of the Golden Drift dam for irrigation purposes and sup- plying Grants Pass with electric pow er. The terms for use of the dam were to be fixed by the Aments, and the Aments owned all the stock of the Advance Power, Electric & Irri gation Company, besides having pre viously Issued to themselves on the Dry Diggings option all but seven shares of the Golden Drift stock. "The Advance stock was offered for sale at 40 cents per share but the project fell flat and stockholders stopped buying Golden Drift stock. This was the first loss of confidence in the Ament management that was apparent. When the dam was con structed large returns on the Golden drift stock were promised and divi dends were to be paid again. How ever, on completion of the dam only a few weeks of actual mining was done and no dividends were forth coming to those who had Invested In Golden Drift stock. "In 1905, shortly after the dam was completed, a 'bond Issue' of $165,000.00 was placed on .the prop erty without the stockholders' con sent thereto, and the pretended bonds so Issued at that time werej used for the Bole benefit of the Ament family. By putting bonds in nocn ior personal loans, Ament got over $50,000.00 more. "After this pretended bond Issue a financial statement was Issued and sent to stockholders for the apparent purpose of pacifying them, which statement Bet forth that the net value ol the Golden Drift property belong ing to the stockholders was the re markable Bum of $2,394,066.26, which led the confiding stockholders to believe their stock was worth at least $1.50 per ghare. "For a period of several years thereafter no practical use was made of the dam and power plant notwith standing the local people wanted ir rlgatlon and the company owned sev eral hundred acres of mining ground which a prospectus sent to stockhold ers said was worth 50 cents r" cu bic yard. A number of Investing stockholders had In the meantime 'ill III GOLDEN COURT FOUR YEARS visited the town and Inspected the properties and could not understand why such a valuable asset with about 3000 horsepower going to waste could not be made to earn Its own maintenance instead of being eaten up by expenses and salaries to the Aments. During all this time the Ament family and employes, with no financial Interests in the property, composed the board of dlsectors and the stockholders' letters and anxious Inquiries went unanswered or their request for real information, such as a stockholder has a legal right to, was evaded or Ignored. "The next move on the part of the Ament management brought about the crisis. In the spring of 1909 the stockholders received a notice of a stockholders' meeting to amend the charter and asking them to ratify a deal with the Josephine County Irri gation & Powtr Company giving an option on the Golden Drift property for $290,000.00. The stockholders, "better Informed as to local conditions, could not conceive of a reason for selling all the principal asset of the company for $290,000.00 In face of the last statement giving the net value of the property at $2,394, 066.26. A number of the stockhold ers wrote the Aments for full particu lars about the sale, a copy of the Ament contract, etc., all of which was denied them for no reason other than It was not good for them to know the Inner workings of the com pany. "Notwithstanding large sums of money had been furnished to the Aments, the people furnishing same were without representation on the board of directors, and were depend ent entirely for Information on what the Aments saw fit to give them, none of which was specific or direct. This failure, and the realization on the part of the stockholders that what they considered the only valuable asset the company had, was to be sold, caused them to create an organ ization among themselves, which they did in the form of a protective com mittee. This committee wrote to the management of the Golden Drift Mining Company and were still denied the Information asked for, which any stockholder was entitled to, and C. W. Ament personally wrote to them to the effect that they had a delicate situation to handle here locally, and that they should send some competent man here to Oregon to make the Investigation and report. This committee selected Geo. E. San ders as their representative and ne gotiations for a better deal for stock holders with representation was started August 1, 1909, and not be ing able to secure a reorganization cn equitable terms, the agent of the stockholders filed the suit and had a receiver appointed for the Golden Drift Mining Company. "When the stockholders first heard of the Josephine County Irrigation & Power Company they naturally thought is was another Advance Pow er, Electric & Irrigation Company deal, a dummy corporation to deprive them of the irrigation business, and after the Investigation by Sanders the local company was found to be a set of earnest men with their own money invested, working to an end that the valley be given Irrigation. No effort was made by Sanders or the stockholders to Interfere with their option or contract." "The same day the receiver was ap pointed the big flood of 1909 washed away the wing dam on the north Bide and carried the pump house and pumps and dynamo Into the river and deprived the community of Irrigation for the year 1910. The stockholders afterward fur nished the necessary funds to the re ceivership and put the plant back In operation for the irrigation season of 1911, and settled the matter with the local irrigation company by buying out the local company. The decree handed down by the court gives over to the Golden Drift Mining Company the real estate in volved in the suit, and also gives It the right of redemption of proivrty from the foreclosure sale previously had in the circuit court. It cancels the blocks of stocks and bonds held by the Amen's, and gives Judgment against C. W. Ament. C. G. Ament and M. C. Anient In th sum of $102, 362.89, together with the costs and disbursements of the suit. Notes held by the Aments against the Gold en Drift Mining Company to the ap proximate amount of $30,000 are annulled, as are also all book ac counts held by th defendants against the Golden Drift Company. The decree Is a sweeping victory for the stockholcLers and undoubtedly marks the beginning of a new era In their affairs. As this was the biggest lawsuit ever tried In southern Oregon, a few per tinent facts are of Interest: Suit was filed November 23, 1909, and receiver appointed. Decree was entered November 17, 1913. It took from June 1 to August 17, 1910, to try the suit on Its merits, and forty- five full days were actually spent In the courtroom taking testimony and the depositions of about one hundred stockholders were taken In Chicago, Illinois, and vicinity. The case was tried before F. Roy Davis ns referee. The record in the case consists of 1822 pages of testi mony. There were about 400 separ ate exhibits, with as many as 2000 written documents under one exhibit number. It took the court reporter over five months to transcribe his notes, and it probably took the court as long to go through and pass on the case. It would require an ex press wagon to move all the books and records and exhibits. On November 30, 1910, the court made an order Issuing receiver's cer tificates to repair the dam and work. was started by Mr. Sanders the next day. Resides the petition for re ceiver's certificates, the court alan passed on a score of petitions, de murrers, etc. The cost of court attendance was about $500.00. The record cost about $2,000.00 The expert tees and ex penses were over $2,500.00, as it took about five months to make the accounting. The attorneys' fees for the plaintiffs were over $10,000.00, and since the suit was started the stockholders have spent nearly $100,- 000.00 for the repair, improvement and maintenance and care of the properties. The attorney for the plaintiffs was Honorable A. E. Reames of Medford, Oregon, and for the defendants, The expert accountant for the plaintiffs was Geo. W. SoranBon, as sisted by Earnest H. Lister, and the expert for the defendants was Harry L. Andrews, who has been secretary of the Golden Drift Mining Company and C. W. Ament for some years past. Mr. Snrannnn wm nopnllnrlv for th work. . h -h TT.flof The Chicago-Rogue River Cora States post office Inspector for the pre- vtn ino I- . ' uiuu jvuio 1U VllUi K3 ui mail Important United States prosecutions In connection with the fraudulent use of the malls. The Golden Drift Mining Company owns over 1,000 acres of land at or near Its plant on Rogue River, besides the lands given the company by this decree. The power and Irrigation plant three miles east of the city orig inally cost, according to the Golden Drift Mining Company's books, about $210,000.00, and with the improve ments made since the receiver was appointed the cost to stockholders Is approximately $300,000.00, without counting Interest on the money In vested. Nearly all of the stock of the Golden Drift Mining Company is now owned and controlled by The Rogue River Public Service Corpora tion. In their fight for their rights the stockholders have bad their allotted share of trouble. Their victory comes to them only after a great sacrifice of time, effort and money. The fight was started by an original commit tee of three, of which Wm. Zimmer man was chairman. This committee selected and designated George E. Sanders as their agent in Oregon. Just after the suit was filed and receiver appointed. Zimmerman was found to be using his position to recover his personal Investment without re gard to the protection of other stock holders. Zimmerman employed an attorney of this city as his private attorney for the purpose, but the attorney would not act after knowing conditions and turned the matter and papers over to Mr. Reames, attorney for the stockholders. About this time Zimmerman further complicated matters by dying, and the. stockhold ers elected a new committee of seven members, which committee carried on the fight until they became con siderably In debt, and to relieve them selves they organized The Chicago Rogue River Company and secured the financial assistance of about 250 other stockholders, who provided the money Tor the Indebtedness and an additional fund of about $15,000 to carry on the litigation. Another rea son for the organization of The Chlcafro-Rogue River Company was the purpose of financing the repairs on the Golden Drift dam and causing stockholders 'to purchase receiver's certificates issued therefor. The Chicago-Rogue River Company expended approximately $50,000.00 on the properties, which sum was paid for In cash, and expended con siderable more money by the use of credit, which expenditure run the company heavily in debt The direc tors of The Chicago-Rogue Rivr Company failed to pay this Indebted ness and filed a voluntary petition In bankruptcy In June. 1912, which was done without the consent or knowl edge of tho stockholders, and the act of bankruptcy was afterwards severe ly condemned by the stockholders, which Included a number of rich men. This condition of affairs had a very depressing effect on the community and left over one hundred creditors unpaid. To relieve the situation Mr. Sanders went east and took the matter up with the larger stockholders, with the result that they and other stock holders have paid all the helpless and unsecured creditors and since have continued to provide money for the are of the property, and provided mor.ey for the care of the ditches, sc the farmers could have Irrigation this ptst season. As the decree just entered places the control of the Golden Drift prop erties In the hands of The Rogue River Public Service Corporation, a statement about that corporation Is of Interest. The Rogue River Public Service Corporation was organized last win ter by Mr. Sanders and some capital ists residing In Indianapolis, Indiana, and Chicago and DeKalb, Illinois. After organization the corporation paid up local creditors of the Golden Drift Mining Company before the re ceivership and creditors of The Chicago-Rogue River Company and took over the property and lands of the Oregon Water and Tower Company, which property Includes the power plant, water works and city lighting plant at Gold Hill and also the prop etrles of the High Line Ditch Com pany and Gold Hill Canal Company. Many of the stockholders of the new corporation were formerly either stockholders, bondholders, or certifi cate holders of the Golden Drift Min ing Company, and It was a desire to protect the small and helpless stock holder from loss on their original in vestment. AH of the stockholders of the Golden Drift Mining Company, other than those Involved in the suit Just decided, weer invited to Join In the new company and protect them selves, as were also the stockholders f" l? tah "VaT. t result that about 300 original stockholders of the Golden Drift Min ing Company who had invested their money In the Golden Drift Mining Company are now stockholders of The Rogue River Public Service Corpora tion and with the result that the new corporation now owns and controls the Golden Drift Mining Company, The Chicago-Rogue River Company and the Oregon Water & Tower Com pany. The Chicago-Rogue River Company In turn owns the legal title to the Josephine County Irrigation and Power Company property, and the Oregon Water & Power Company in turn acquired the tltlo to the Gold Hill Canal Company's property. The aforementioned companies rep resent the entire Investment In power and Irrigation development In the lower Rogue River valley. Either the Golden Drift Mining Company or the Josepulne County Irrigation and Power Company succeeded to the rights and business of the following companies: Advance Power, Electric & Irriga tion Company. Grants Pass Orchard & Irrigation Company. Rogue River Valley Improvement Company. Rogue River Irrigation & Power Company. The result of these purchases that have been made by The Rogue River Public Service Corporation Is that the new corporation now embodies all the Investment and effort that has been put forth In the Irrigation and power business In this part of the valley to the end that a plan of. com plete development can now be car ried out without the annoyance and delays Incident to conflicting Inter ests. DECLARE WAR ON COLDS A crusade of education which alms "that common colds may become un common within the next generation" has been begun by prominent New York physicians. Here is a list of the "don'ts" which the doctors say will prevent the annual visitation of the cold: "Don't sit In a draughty car." "Don't sleep In hot rooms." "Don't avoid the fresh air." "Don't stuff yourself at meal time. Overeating reduces your resistance.' To whkh we would add when yon take a cold get rid of it as quickly as possible. To accomplish that you will find Chamberlain's Cough Remedy most excellent. 8old by all dealers. AmIuMp Joh work st Courier rffi j The Fact Remains No amount of misrepresentation by the peddlers of alum baking powders, no jug gling with chemicals, or pretended analysis, or cooked-up certificates, or falsehoods of any kind, can change the fact that Royal Baking Powder has been found by the offi cial examinations to be of the highest leavening efficiency, free from alum, and of absolute purity and wholcsomcncss. Royal Baking Powder is indispensable for making finest and most economical food. PROTECTION' IS ASKED AOAIXST CONSCRIPTION (By a United Press Staff Correspondent.) Mexico City, Nov. 24. Scores of Mexicans appealed to foreign diplo mats here today for protection against conscription Into President HuerU's army. A remarkable feature of the case was that most of the appeals came from women whom the president Is drafting Into the service for duty as cooks and nurses. Ills conscription methods, though primitive, are effective. Squads of soldiers are sent out to scour the streets and ransack the cafes for likely candidates, and whenever one is seen, he or she Is impressed straightaway Into the service. There are no formalities whatever. Among the applicants for aid at the United States embassy were sn aged woman and her two daughters, all of whom had been called on for commissary duty. Charge d'Affalres O'Shaughnessy, like the rest of the foreign diplomats here, was compelled to tell these and other applicants for protection that, Inasmuch as they were citizens of Mexico, he was powerless to do any thing for them. Reports were received today of two Inconsequential battles between federals and rebels. Berlin, Nov. 25. A petition for tha enfranchisement of women was jnmong those presented when the relchstag met today. SAVING REGULARLY every MONTH $1, $3, $10, s)2 whatever sum may be S)ured -means a Competence in liter years. In thin unto Ixuik the fund Is secure and inny le started with a dopoult of one dollar or more drawing 4 per cent. Interest. GRANTS PASS BANKING & TRUST CO. OFFICERS AM) DIRECTOR. Claus Schmidt, Preftldent Marshall Hooper, Cashier Jos, T. Tuffs Goo. U. Riddle f Opportunity is not bothered with the sex question. It only asks, "Can you grasp and hold me?'' With every pahUig week some one or more of our customers are nl.Ie to graup an Opportunity for in vetmnt mmle pemlble through their IiunIiicha connections with this bsnk. You kliould hank here. JOSEPHINE COUNTY BANK T. R. OKNK.LL. Pretlrnt 1. L. CALVERT, Tire Pres. WARRANT IS OUT FOR AFFINITY EARLES ARREST Now York, Nov. 24. Officers arm ed with warrants charging kidnap ing were awaiting today here and in Uoston the arrival of the trans Atlautlc liners Marquette and Fin land, on one of which they believed they would find Ferdinand Plnne Earlo, Charlotte Herman, his afllnlty No. 3, and Earle' nine-year-old son by his first wife, whom the pair are accused of having stolen from a French boarding school. The first Mrs. Earle Is a French woman and whon she and Earle parted she took tlu'lr son, and as soon as he was old enough put him In a boarding school near Paris. He disappeared from there some time ago and on receiv ing an appeal from his frantic moth er tho police unearthed evidence In dicating that he had left with his father. Tbey asked his arrest and extradi tion on a kidnaping charge. In addi tion to this, he would be amenable to New York law If he landed there with a kidnaped person, and still further, resldonts of Monroe, N. T., his home town, were preparing tar and feathers for htm If he re turns there. POLK'S GAZETTEER A limlnoM rlfctorjr f oh City. Town anil Vlllim In Ormn and Wnnlllnnlon, (Ivlnff iJcmTlptl v Hkxti'b uf h plan. Loc ution, Hh!iiln Farllltli-i anI a C!n?i f I ell IMrnclory of nch Uuilnmi And rroruiftlon. II. I. I'OI.K CO., Inc. HiMI, l."'l. Geo. P. Jester, Vlce-Preldent L, A. Leaner, Ass't Cashier O. 8. Rlnnchard Herbert Smith RAM II. IUKliH, VmUUi GEO. R. DICKINSON', At Cashior.