Selections From The Splinters - Volume 7
At a called meeting of the Board of Directors, held on April 8, 1879, a resolution was adopted to ask George Sealy for an extension of time for the payment of the note for $250,000.00, "and to enforce the payment of which the property and franchises of this Company are advertised for sale on the 15th of this month". Another resolution was adopted to the effect that if Mr. Sealy should grant the extension of the loan, the Company would seek an additional loan of $500,000.00 with which to extend the road to Brenham.
At a called meeting of the Board of Directors, held on April 17, 1879, a letter was received from Robert Mills, Trustee under the Deed of Trust of December 16, 1878, notifying the Board that on April 15, 1879, at noon, he had sold the entire property of the Gulf, Colorado and Santa Fe Railway Company at public outcry, in front of the court house door in Galveston. Th property was sold to George Sealy, the highest bidder, for $200,000.00. After deducting the cost of the sale, the balance, $197,851.50, was applied to the payment of the note for $250,000.00, and the note so endorsed. The President, Mr. Kopperl, stated that he had on the day of the meeting paid George Sealy $13,000.00 on account of the Company's note. As George Sealy had made demand for possession of the purchased property, the Board adopted a resolutioin surrendering possession to him at once. One part of the resolution reads:
"That the present corporate organization of said Company constituted by this Board of Directors does now cease and determine, and that the right to such organization devolves upon said Purchaser and his Associates".
The first entry in Minute Book No. 2 of the Gulf, Colorado and Santa Fe Railway Company contains the articles of association and organization adopted by the Stockholders and Corporators of the Company at a meeting held on Saturday, April 19, 1879. In these articles, George Sealy declares that his associates in the purchase of the Railway are:
Ball, Hutchings & Co. Isadore Dyer M. Kopperl Julius Runge Sommerville & Davis J. D. Rogers & Co. R. S. Willis Leon & H. Blum J. J. Hendley W. Gresham H. Rosenburg M. Lasker Moody & Jemison C. E. Richards Wallis, Landes & Co. H. Kempner S. Heidenheimer W. F. Ladd
The articles also contain the following declaration:
"And the said parties, including said Sealy, do hereby make known and declare, that all rights whatsoever therein or thereto on the part of former Stockholders and Corporators of said Company, and all claim of whatsoever character against the same existing prior to said Trustee's Sale are extinct and at an end by said sale".
The following further declarations are also contained in these articles:
"And that the said parties of these articles are, and constitute the sole and only Stockholders and corporators of the said Gulf, Colorado and Santa Fe Railway Company, and that they have, hold, possess and will exercise all the franchises, right, powers and privileges heretofore conferred by the State of Texas on the Gulf, Colorado and Santa Fe Railway Company by the charter of said Company enacted by the Legislature of the State of Texas, May 28th, 1873, and all amendments thereto, and all acts relating to said railway or said company, and by all laws of said state relating to railroads, or otherwise, among said rights being the right and franchise to be a corporation and to preserve and continue the said corporation of the Gulf, Colorado and Santa Fe Railway Company, which right and franchise they do now hereby exercise and put into full effect. "It is expressly declared, that this corporation is in no way liable or responsible for any act, contract, obligation, debt or responsibility of said corporation under its previous organization, but is responsible only for its own acts from and after the date of said Trustee's Sale and purchase by said Sealy. "The amount of money invested in the construction of said railway prior to said sale having exceeded One Million of Dollars, and the parties to these articles hereby agreeing and binding themselves to pay, on call, to the Treasurer of said Company, for the immediate further extension of said railway the additional sum of Two Hundred and Fifty Thousand Dollars, in cash, in the proportion and amount respectively hereinafter stated, the aggregate amount thereof, One Million Two Hundred and Fifty Thousand Dollars, is hereby adopted as the basis upon which to state and fix the respective shares and proportions of the parties hereto in the Capital Stock of said Company; and on the payments by the parties of their relative pro-rata amount of said Two Hundred and Fifty Thousand Dollars hereinafter specified, shares in the Capital Stock by said Company, and entered on its stock book to the said parties hereto respectively."
The deed from Robert Mills, Trustee, to George Sealy, conveying the entire property of the Railway Company, is a part of the minutes of this first meeting. The deed from George Sealy conveying the entire property to the newly organized company, appears on Pages 20 and 21 of Minute Book No. 2. The original deeds are in the custody of the Secretary of the Gulf, Colorado and Santa Fe Railway Company. The deed from Rober Mills, Trustee, to George Sealy, is Dated April 15, 1879. It was recorded in the Deed Records of Galveston County, Texas, on April 26, 1879, in Book 29, Pages 337, 338, 339, and 340; in Brazoria County May 3, 1879, in Book "R", Pages 717, 718, 719, 720, and 721; and in Fort Bend County on May 12, 1879, in Book "M", Pages 217, 218, 219, 220, 221, and 222. In the Secretary's office, it is on file with the title papers for Galveston County, in support of Deed No. 1-44, which is the number assigned to the deed from George Sealy to the Company. The deed from George Sealy to the Gulf, Colorado and Santa Fe Railway Company is dated April 23, 1879. It was recorded in the Deed Records of Galveston County on June 25, 1879, in Book 29, Pages 556, 557, and 558; in Brazoria County on July 1, 1879, in Book "S", Pages 48, 49, and 50; and in Fort Bend County on July 5, 1879, in Book "M", Pages 310, 311, and 312.
At this first meeting, April 19, 1879, a resolution was adopted declaring that is was a lawful stockholders' meeting, "of all the present stockholders and corporators of the Gulf, Colorado and Santa Fe Railway Company"; and they proceeded to "complete their reorganization of said Company" by electing a board of directors. The directors elected at the meeting were:
John Sealy Walter Gresham W. S. Davis George Sealy M. Kopperl S. Heidenheimer J. E. Wallis H. Rosenberg J. D. Rogers W. L. Moody Julius Runge R. S. Willis Leon Blum
At a called meeting of the new Board of Directors, held on Tuesday, April 22, 1879, for the purpose of organization, the following officers were elected:
John Sealy, President R. S. Willis, Vice-President C. C. Allen, Secretary George Hall, Treasurer
New by-laws were adopted at an adjourned meeting of the new Board of Directors, held on Wednesday, April 23, 1879.
The Board of Directors, at the meeting of April 26, 1879, recommended the issuance of bonds and the execution of a deed of trust. The approval of the stockholders was given at their meeting on May 27, 1879. John S. Kennedy and Charles M. Fry, both of New York City, were named as trustees.
The Board of Directors immediately resumed construction of the road; purchased much material; and engaged Walter Gresham to secure right of way from Galveston to Belton.
(Minute Book No. 2 was abandoned, for no stated reason, and the records in it, beginning with the reorganization meeting of April 19, 1879, were re- entered in Minute Book No. 3, which contains the records continuously after that time, to and including the minutes of a special meeting of the Board of Directors held on June 30, 1904.)
At the meeting of the Board of Directors held on August 9, 1881, an appropriation was made to pay the claim of Foster & Thomson, Attorneys, New York, for services in regard to the old contract with Dennistoun, Cross & Co., which was never put into effect.
The Board of Directors, at their meeting of May 14, 1883, recommended, and the Stockholders, at their meeting of August 1, 1883, approved, the issuance of Second Mortgage Bonds, and the execution of a second trust deed to secure them. At that time Five Hundred and Thirty-six miles of road had been constructed.
The road was prosperous until about 1884. The report of the President, presented at the Stockholders' meeting of October 7, 1884, recited that the past year's business had been disastrous to all railroads, due to short crops, and general business depression. On January 1, 1885, the company borrowed $300,000.00 from the National City Bank of New York, at four months, giving Second Mortgage Bonds as security. Arrangements were also made to borrow further sums from Ball, Hutchings & Co., Galveston.
In 1885, the trustees under the first mortgage questioned the legality of the issuance of certain bonds which the Company had requested; and a bond in the sum of $100,000.00 was given by the Railway Company, with George Sealy of Galveston and Percy R. Pyne of New York as sureties, guaranteeing the deposit of second mortgage bonds in that amount, to protect the trustees. The question raised was that the trustees believed that the bonds should be issued on total main line mileage only, while the railroad had certified its total mileage to include its permanent side tracks. The stockholders bound themselves to secure George Sealy from any personal loss because of his signing this bond.
The Directors, at their meetings of April 7, 1885, and April 10, 1885, recommended, and the Stockholders, at their meeting of June 15, 1885, approved, the execution of a deed of trust---a second deed of trust---and the issuance of second mortgage bonds, to be dated June 15, 1885, with the Farmers Loan & Trust Company of New York as Trustee. This was to take the place of the second mortgage provided for in 1883. All the bonds issued under the mortgage of 1883 were destroyed in New York, in accordance with a certificate dated Dec. 14, 1886, with the exception of Bond No. 502, which had not then been presented for exchange into the new issue.
On March 3, 1886, George Sealy, President of the Gulf, Colorado and Santa Fe Railway Company, executed an agreement with Wm. B. Strong, President of the Atchson, Topeka and Santa Fe Railroad Company, and the Finance Committee of that road, agreeing to transfer not less than nine-tenths of the stock of the Gulf, Colorado and Santa Fe Railway Company to the Atchison, Topeka and Santa Fe Railroad Company, The Atchison, Topeka and Santa Fe Railroad Company to assume the Gulf, Colorado and Santa Fe Railway Company's bonded indebtedness, and to exchange its stock for that of the Gulf, Colorado and Santa Fe Railway Company, the total stock to be exchanged being eight millions.
An explanatory agreement signed by George Sealy and Wm. B. Strong under date of March 30, 1886, sets forth:
"The main object and intent of this agreement is to provide for the earliest practicable connection between the lines of the two companies through northern Texas and the Indian Territory".
It gives the arrangements for transfer of stock in some detail. Most of the stock was to be deposited in escrow with the Farmers Loan and Trust Company of New York until Jan. 1, 1887.
The originals of these two agreements are filed in the office of the Secretary of the Gulf, Colorado and Santa Fe Railway Company at Galveston, under Contract No. 4899.
According to a copy of a printed circular, dated at Boston on December 10, 1886, calling on the Stockholders for the payment of their obligations under the transfer agreement, George Sealy acted as the agent of the Stockholders in making the agreement with the Atchison, Topeka and Santa Fe Railway Company.
Wm. B. Strong, Isaac T. Burr, and A. W. Nickerson of Boston, were elected Directors of the Gulf, Colorado and Santa Fe Railway Company at the meeting of the Board of Directors held on June 14, 1886. (According to the agreement of March 3, 1886, the number of directors was to be reduced to seven, of whom four were to be residents of Texas.)
At a called meeting of the Directors held on May 14, 1887, Wm. B. Strong was elected President of the Gulf, Colorado and Santa Fe Railway Company.
The separate existence of the Gulf, Colorado and Santa Fe Railway company had ended.
Elinore M. McDonough. Galveston, Texas. March 26, 1927.
Volume 7 Splinters pages 126-131 transcribed in altered form for the web by Johnnie Welborn, Jr.
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