Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-12-29
BLAME HIGH FINANCE
Investors Say Mobile Lines Ac-
counts Were DoCtored.
A COMPLICATED SITUATION
Fear of Second Mortgage Caused Petit
ton for Receiver.
MANY BONDS SOLD ABROAD
Over Half the Total of $4,000, 900
Floated in London as Prime
American Securities.
MANY BONDS SOLD ABROAD

NEW YORK, December 29-The intrca-
cies in the affairs of the Mobile, Jackson
and Kansas City railroad, which was
placed in the hands of receivers on We'd
nesday. were far from being cleared up
yesterday. There appeared, as the af-
fairs of the company were inquired into,
many wheels within wheels, the exact re-
lations of one to another being difficult to
determine. The interest In the annual re-
port of the road aroused the previous day
by the discovery in it of one of the most eX-
traordinary income accounts ever published
by any corporation was heightened yester-
day by the further revelation that appar-
emily the report in presenting the income
account of the whole road gave the earn
ings of both divisions while deducting the
fixed charges of only one-half of the "rop-
erty.
The interest of the banking community in
the receivership was increased by the fact
which was brought out yesterday that no
less than 81 800. 900 of the bonds of the
road out of a total of 100000 hau been
foated in London and Paris as a prime
American security. These foreign sales of
the bonds were arranged for the most part
through the French Finance Corporation.
which was organized some years ago for
the purpose of introducing American secur-
tiles to the French market Prince A.
Poniatowski is the president and one of the
directors of this company, and the other
two directors are c. X. Beekman and s. 8.
Menken. The last two are law partners of
ex-District Attorney Philbin in the firm of
Philbin. Beekman & Menken. The only re-
lation of the French Finance Corporation
to the road now in the hands of receivers
was said to be that of bankers who acted
In the sale of the bonds abroad.
The Floating Indebtedness.
1t was reported yesterday that the float
ing Indebtedness of the Mobile Jackson
W iS cd at
10000, is held by many banks, either on
direct notes of the railroad company or on
notes of the Alabama Securities Company
the construction company which built the
road.
The fact that three of the directors of the
Oriental Bank are directors in the railroad
brought out intimatlons that the bank was
nj some way concerned with the affaisr of
the road. This formally denied by r.
w. Jones, jr., president of the bank Mr..
Jones said that the bank was not involved
in any way whatsoever by the receiverShfp
of the road, and that his and the connec-
ton of other directors of the bank with the
railroad was due to the fact that Alexander
Mcdonald. one of the pank's directors, was
the chief stockholder in the railroad. He
explained that 1t was at Mr.. McDonald's
request that he and Charles Z. Levey had
become directors of the railroad. Mr.
Jones said that he had now only nominal
interest in the railroad property. that he
had had larger interest formerly, but that
he had sold out about a year ago.
1t developed yesterday that the committee
headed by Ambrose Mcneil, in whose behalf
the proceedings for the receivership were
instituted, had for long time been work.
ing for a reorganization of the property,
and that on one previous occasion papers
for the appointment of a receiver had been
drawn up. This step postponed. rep
resentative of the plaintiffs said yesterday,
as a direct result of assurances from the
management of the railroad that the work
of putting the road In proper financial and
physical condition would be FASTENED.
The Receivership Proceedings.
The present receivership proceedings were
resorted to, it is said, when il became evil