The Commoner.
24
VOL. 15, NO. 9
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iOnUIllSSlOri DCOrCS JlYOCK ISlSriU. TTTDERAI, C-mnnSSTON SHOWS TjOK1 rT? t?orrrr t.
, Following are press dispatches and ia addition was to be paid a fcon
from Washington, under date ol'us of $500,000 at the expiration ot
Aug. 17: hhe contract, he was giren bonds of
The Interstate Commerce commfe-the lailway company of a par value I
sion today handed down a report on! of $450,000. , j
the finanical transactions and the op- "C. H. Warren, Tice-president, was I
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FEDERAIi C03DIISSION SHOWS IiOSSES OF BOOK ISLAM)
jnzxvLawjxv xvt ki?
liOi
ri lB
- . - '-'
eratfon of the Kocfc Island Railroad grren oy me railway company xau.- q
Company under the Reld-Moore syn- 000 of the common and $105,000 of
dicate and the history of the man- the preferred stoci of the New Jersey
agement which finally placed tne company ana ?3v,uuv w cu. q
Figures taken from Interstate Commerce Commission report-
Total loss on transactions, abont 20,000 000
Expenses of maintaining and bousing companies; more ' '
-J" ; .;; ' 290,000
Frisco deal, approximately 6,500 000
Alton deal, approximately ; 6,370000
Trinity and Brazos Valley Railway deal, more than. . . 450 00 00
Consolidated Indiana and Dering Coal Companies, at '
east 1 onn nnn.
e
$20,000,000 is charged to have been railway company $30,000 in bonds of j Miscellaneous and unexplained VxpendituVes '. ';'.'.. 79'
caused by the syndicate. It is point- the Iowa company, then wortb $24,-'q ........ t,o&6
road in a condition of bankruptcy. "R. R. Cable, a member of the ex- nnntrihnfinn. nr nf,,iHnC rt nfRna n,f" " V " . 7'"'":r
An aggregate of losses amounting to ecutive committee, received from the Tenner transaction ' ' oi!?'1!aa
Miscellaneous and unexplained expenditures. : 79'ro?
a --.. '-ii".u v
ed ont that the Rock. Island, from 500 for his service in the ajwmisitf on I , r r r n, r t r ?. tv ,-n.,-. W
holntr n Ow rfs asm nnf of the of the Rnrlinfnn Psr T?anif?c ant) I vwwvvvvvwuui
"" O - - j-- (? - - - . 0w., . J..-. .
finest railroad properties in the coun- Northern Railway Company, and he
bonds by common carriers, whether
directly or through holding compan
ies devices or otherwise, is again demonstrated."
'
try, with its stock selling in the mar- was paid by the latter company SSS.-hras then in the hands of a receiver
fccts of the world at around ?200 a 000 in the same transaction. and racing a debt cf $8,000,000.
share, now is In the hands of re- "Robert Mather, president, was' "To company cr.rried as assets
ceirers, with its stock down to $20 giTen $25,500 in cash. George t. DOnds ot (he Toledo, St. Louis and
a" share, although its earnings have Boggs, director and secretary of the Western Railroad Company, at a book
steadily increased and last year were board of directors of the railway Taluatiori of -56,000,000, secured only
the largest in its history. company, was given $15,000 in cashby stock of the Chicago and Alton
Nowhere in the report does there wnen he retired (rom the secretary-" Railroad Company, which had a mar
appear a hint of a basis for criminal sbjp of tue jny company lket TaIne on Jne 30, 1915, not in
prosecutions, although it is regarded When the .1 stock of the ra!1. excess of $1,600,000.
as certain that the findings of the ymyaUiilt "The directors also reported as as
commission will go to the department JJJ J TshlrZt toe Devalue of sets the Per cent debenture bonds
i : :' u . ., ,TM:efit of such officers of the company "Another misleading and obiec-
The acquisition by the Reld-Moore jas the president shall elect and deter- tionable practice of the railway corn
syndicate of $20 000,000 of Rock Is-jmine j was th f u
and stock in 1901 is mentioned as The contributions to officials of Lw roll the true amounts paid to its
the beginning o-the story of manipu- tho railroacl nnmnjiriv in anoaa rt,.nflfiPPr H
lation by which the road essentially tneir salaries aggregated about $1,-1 "The publication of misleading
ZZ: ?!Ltt'- Ports to stockholders can'nT bl
"A
significant transaction
syndicate gradually became members !
Af Ihn tmar,1 nf .HrnMnra onrlhvfhol A Slgamcani iraHSaCUOn WaS
organization of two holding com-; i?arowine out of the action of C.
panics, and the creation of an execu-; ?:Teimer' a stockholder, who made
tlve committee the successive steps ?e?nfds on 'he mrs o the com
in depreciating the property succeed- J. a list o its stockholders,
ed. Capital stock was several times I JJ wayf C3m.?an7 paid .Vernier
increased, the debt was swelled and;9.1.'0 , ostensibly in consideration
the net income was reduced. Be- hi delTlvery to it of securities of
t,i f, !, A..maMA,i "k. i, the rew Jersey company and of the
report, many millions were given !liW!?r5om?aS' VxTlHed at M00.j
'away by the executive committee. r"mo T " ora8Ka central
railway and of the Nebraska Con-
Whcre Commission Failed structlon company of a nominal value
The commission confesses failure f ?00f000. Neither the Nebraska
to determine just how much Messrs. ilren , Jailway company nor the Ne-
Reid and Moore and the r nartners """"' vuwucuon company nad
Succeeded In taking out of the Rock
Island. The comment of the com
: mission Is that whatever their gains
"may have been, the holders of Rock
Island 'stocks and bonds have that
which. Is of little value.
'' It is.decl. r. . that misrepresenta
tion of assets was a regular practice
of the company, and that misleading
. reports were published to fool the
stockholders.
The commission, suggests that the
terms of the Clayton anti-trust act
should apply to directors of railroads,
so that ho director could serve on
. the board of two competing compan
ies, nd also that there should be a
law under wh'2h railway officials
''should bo held to accountability as
strictly as government officials.
A limit on the issuanco of stock
and bonds also is "urged. The mate
rla.l part of the report follows:
"Many largo contributions were
'ma'dti to officers and directors ot the
railway company. J. E. Gorman", first
'vice-president, was secretly paid $18,
750 per annum.
C. A. Moore, chief engineer, re
ceived a salary of $15,000 per annum
and a secret bonus of $3,000. Upon
"the retirement of R. A. Jackson 'as
general solicitor ho was given $100,
00Q in cash.
Great Bonus to Loreo
"As an inducement to L. F. Loree
to. relinquish after 10 months' ser
vice a joint contract with the railway
company and the Frisco, under which
he was to receive a salary of $75,000
: per annum for r. period of five years
any road or other tangible assets, and
ineir siock n without value.
"The payments to Venner were in
consideration of his refraining from
further prosecuting in the courts his
opposition to the syndicate plans."
The c&mmission finds that the to
tal loss to th3 Rock Island in the Al
ton deal way $6,370,000. In th
Trinity and Brazos deal it is shown
that the Rock Island invested $4,-
uu-i,ios, practically all of which rep
resents loss. In the Consolidated
Indiana -Coal Company the company,
by its large advances, Incurred a loss
not yet determined, but approximate
ly several millions. The interest loss
already is $400,000. The net loss of
the Rock Island in the Dering Coal
Company is fixad at $906,420, with a
probable additional loss in securities
of $2,500,000. Of the investment of
$12,000,000 in the Rock Island Im
proviment Company the commission
says the Rock Island sustains! frronf
loss. t
These items and others show nr.
aggregate loss -to the railway com
pany of more than $20,000,000.
In addition is to be calculated that
prior to June 30, 1914, the railway
company paid to financial institu
tions, in connection with the issuance
of bonds, commissions accrrGcnfino-
more than $1,200,000 and suffered
discounts of more than $17,700,000.
The railway company included
among its assets certificates of in
debtedness of the Trinity and Brazos
Valley Railway Company, carried at
book value of $3,694,863.87. The
Trinity and Brazos Valley Railway
re-too
severely condemned, and the indi
viduals guilt of such acts should be
subject to a just penalty.
"The syndicate decided to put the
railway into a receivership. The
board of directors was not informed
of the intention, and at no meeting
of the board wn any authority given
for any such action. Members of the
board of directors not in the confi
dence of the syndicate and stockhold
ers were kept in ignorance of the fact
that such a bill had been prepared."
The report says in conclusion:
"The property of the railway com
pany will be called upon for many
years to make up the drain upon its
resources resulting from transactions
outside the proper sphere in which
stockholders had a right to suppose
their moneys were invested. This
record emphasizes the need of rail
way directors who actually direct.
A director of a railroad is a quasi
public officer, who occupies a posi
tion of trust. A dirpnMr wi ok
mlts blindly to the exploitation of his
company is a party to its undoing,
and he should be held responsible for
wf ome f CtS as if ne had a Personal
instead of an accessory interest De
fore the fact.
"It is inconceivable that a director
of ordinary business prudence and
sagacity would sanction large exnen
diturds without an inquiry fs to the
purpose of such disbursements
So long as this situation exists
however, it suggests the need of a
laW ?KnaiP such directors of re-
Sn?ibJIltyifor the dissiPation of cor
porate funds.
"The Clayton anti-trust act will
S? LLU awftil for any Person a
the same time to be a director in
two or more competing corporations
ti,; ;;r" ru "u a tai, sur-
pront aererrfiirnff no-
Plus, undivided
more thnn 51 nit Ann 1 ....
formoney reward. trust
By this case the need of some lim
nations on the issuance of sS "nd
PRESIDENT ADVISES NEW
JERSEY
The Washington staff correspond
ent to the Chicago Tribune sends the
following special under date of
Sept. 7:
The White house made public a
letter written by Secretary Tumulty
to Sheriff "Gene" Kinkaid of Hud
son county, New Jersey.
Secretary Tumulty's letter fol
lows: "I received your letter inviting me
to be present at the meeting of the
Hudson County Democratic commit
tee, scheduled for Sept. 11, the ob
ject of which, as you state, is the in
dorsement of the president. It was
my understanding when we discussed
this matter some weeks ago that the
meeting you had in mind was merely
a meeting of the Hudson county com
mittee, for which you were anxious
to procure the services of Senator
Lewis of Illinois as the speaker.
"I had a talk with the president
about this matter, and he deeply ap
preciates the generosity of these sug
gestions, but New Jersey is his own
state, the men who would act in this
matter are his own personal friends,
and he feels that it might seem as if
he were taking advantage of the ex
traordinary situation now existing to
gain some personal advantage
such an expression of confidence by
them.
"As I said in my letter to State
Chairman Grosscup a year ago, this
would be inconsistent with his whole
thought and spirit, and he shrinks
from it as from something that would
embarrass him rather than help him.
"I feel confident that you will un
derstand the spirit in which he says
this, and that in urging the dem
ocrats of Hudson county not to do
this he is not abating in the least his
deep appreciation..
"Of course, if your meeting has no
connection with an indorsement of
the president and is one to be held
under the auspices of the democratic
county committee and shall be par
ticipated in by all factions In Hudson
county, I will gladly aid you in pro
curing as a speaker the services of
either Senator James or Senator
Lewis."
RHEUMATISM
CURED
I will Rladly fiond any Rheumatism sufferer a
Slmplo Herb Rcclpo Absolutely I-reo t nan '
Conquer Kneumntism to n positive ccnaini.
linvo given it lo many sufferers who belle cu ui
cased hopeless, yet they found relief irom
suffering by taking theso ulmplo herbs. . nc"a.
mo ol n severe attack of muscular and lni nnuu
tory Rheumatism. It also subdues Sciatica iw
Nouralgla and purines the blcod. 1 knovr J u ".'
consider It a G od-Sond after you have put it w ' "
test. Thorn Is nothing injurious coutalneu
and you can see for yourself oxactly w",,ltS
taking. I will gladly send this Recipe -abiuwjr
free to any snflercr who will send nnm,a
dross. If convenient, euclosoa two-cc.ntsiaixu'.
W. A. SUTTON. G51 Orchard Avomu
JLos Auroles, Callioruj-
iy
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131