From the beginning the NHL had had a lot of turnover in franchises. In their first year they lost the Montreal Wanderers only a few games into the season after their home rink burned to the ground. In 1919 the Quebec Athletic Club, formerly the Quebec Hockey Club of the NHA, finally started play in the NHL. They would only last a season before their franchise was revoked and sold to a group in Hamilton. In the '20s the NHL expanded to the United States for the first time, adding teams in Boston, Pittsburgh, New York, Chicago and Detroit. All was going pretty well in the NHL until the Depression set in.
In 1930 the Pittsburgh Pirates moved to Philadelphia to try to stem losses. The plan didn't work and the team suspended operations in '31. The NHL lost another team to suspended operations in '31: the Ottawa Senators. One of the league's founding clubs, the Senators played in by far the smallest city in the league and they simply could not afford to compete anymore. The team resumed operations in '32 but by '34 they simply could not make a go of it in Ottawa. The Senators moved to St. Louis, Missouri and changed their nickname to Eagles.
The Eagles didn't fare any better, finishing dead last in the '34-'35 season. The owners submitted a request to the NHL to suspend operations again however on October 15, 1935 the board of governors met and decided to buy the franchise outright and fold it. What followed was a dispersal draft of the Eagles' players. There were 23 in all under contract, not all of them playing in the NHL. 18 were drafted by the eight remaining teams.
Well, seven of them anyway; the Black Hawks refused to participate, thinking the whole thing was a bit of a farce.
|1||Pete Kelly||New York Americans|
|2||Bill Beveridge||Montreal Canadiens|
|3||Carl Voss||Detroit Red Wings|
|4||Glen Brydon||New York Rangers|
|5||Joe Lamb||Montreal Maroons|
|6||Bill Cowley||Boston Bruins|
|passed||Chicago Black Hawks|
|7||Chuck Shannon||Toronto Maple Leafs|
|8||Eddie Finnigan||New York Americans|
|9||Irv Frew||Montreal Canadiens|
|10||Maynie Peterkin||Detroit Red Wings|
|11||Vernon Ayres||New York Rangers|
|12||Bill Taugher||Montreal Maroons|
|13||Ted Graham||Boston Bruins|
|14||Cliff Purpur||Toronto Maple Leafs|
|15||Polly Drouin||Montreal Canadiens|
|16||Hank Lauzon||Montreal Maroons|
|17||Jim Dewey||Toronto Maple Leafs|
|18||Mickey Blake||Toronto Maple Leafs|
I have seen conflicting sources about which Montreal team chose Henri "Hank" Lauzon (who ended up playing a fruitful minor league career with the Hershey B'ars/Bears of the AHL). Some say Maroons, some say Canadiens. He ended up not playing with either. The Trail of the Stanley Cup, perhaps the most authoritative source of hockey lore prior to expansion in '67, noted that Lauzon went to the Maroons.
Bill Beveridge definitely went to the Canadiens and was sold almost immediately to the Maroons.
The teams paid the league for each draft choice, with each player carrying a particular draft price. For example Bill Beveridge had one of the higher prices (The Trail of the Stanley Cup had noted the prices but it appears I have lost my notes...) being that he was the starting goaltender. Lauzon, Dewey and Drouin carried lower prices because they weren't even playing in the NHL. (Drouin played with the Canadiens the next season.)