Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1910-09-20

Of STOCKS
CHARGED
NEW FEATURE INJECTED
INTO FREIGHT RATE PROBE
Alleged Initiation Designed to
Conceal Large Sums Paid to
Stockholders Without In
creaSing Divided Rate.
IBy MornIng Journnl sreInI Lea.ea wlrel

tBy Morning journal Special Leased Wire
Chicago, Sept. 19-Alleged stock
initiation and manipulation. designed
to turn owe to the stockholders large
sums Of money without putting in
the company's reco'd any evidence
of more than passing for dividends,
was the subject int which the in
terstate commence commission delved
today at the continuation of its hear
ing Following the suspension Of the
general advance a freight rates Of
western lines scheduled to take effect
September LIST.
The stock manipulation feature OF
the inquiry was Suggested by Com
missioner Clemcntsa and was immed-
lately taken up by the commissions
attorney, Frank Lpn. and Attorney
Atwood of Kansas Gty, who appeared
for the general Shippers committee,
which is fighting tie increase. Con-
trOller Bluevolt, Of the Illinois Cen
trail railroad, was The witness from
whom the disclosuNs which followed
were obtained.
Commissioner Clements called the
witness attention u figures he had
furnished on direct examination by
the railroads counel. The commits
sioner said:
you say, Nj. HauVelt, that in
lS91 your capital stock was 100000
600 on 2.S75 niles OF road. ana in
1910, on only about1, 700 miles more
it was 100000 Also that in
1891, the bonded Indebtedness was
only SCI. 600, 900, willie in 1910 it had
reached $t76,0 )0, 90. Why is this ?"
"Well was the answer, what
would appear o bi the excess went
to improve thu roadway and for
equipment ant ptchase of other
roads"
And how WIS TIN stock raised Tor
these purposes sold'" continued the
commissioner. "Wis it on the open
Market"
Part of 1t WIS. lat most of IL was
sold to the stockholders at par"
WAS there yer declared a stock
dividend"
"Oh, ! am suie thee was not. That
would amount 60 tc same as any
other dividend YOU ee. The Illinois
central stock talcs represented real
values, o must SC, in dollars and
cents
Hero ATTORNEY Lyd sought to have
the witness diffcrcnute between Civ
ing stockholders a. s,ck dividend on
them stock with more than
par at parity. The cntrcller insisted
there was a vast difference, even il
the result were the anne I'm cash TO
the stockholders, Whlh ne admitted.
This part OF the testimony opened a
new disposition OF corporations
and Mr. Line, fter asking If it
was to make the stok approach the
cash value. and Enlightened it was
not allowed the sttorey 10 delve into
the par stock IDEAS.
If your stock aol, at lao in the
open market aked the attorney
and you gave d TO 'our stockhold-
at 100, what lccane of the extra
so per cent of ii vahe?"
why. IL went o thi stockholders.
was the answer.
Then the uphot f IL was your
company added . It's iapital stock by &
stock goat Jar. when ID
needed money. hen could have =
sold less stock n Tho open market.
satisfied its nees and kent the cap- .
.tal stock downSiving less capital to d
figure dividendslpon isn't that So ." .
Controller Buvelt was unwilling a.
such an imprcson shosld prevail. he
said, and he cNained Ia saving ii
suppose We dumped $4,000. 600 h
IN stock on tf markef az once. n q
send sslue way below par
consider g. good business policy g
.o sell where % were sure il would o.
par sniScep control 81 the q
'oad whore itras" 1
Attorney Afnod asked how much 81
the commy's S2S5.00O.00 in
stocks and beds had thus been sold {.
II mar since 10. "a
The reply Rused other attorneys p
the shiprs 10 examine the rec 90
'rds that halbeen submitted by the
company. n nlauyeit answered.
II find q sun was $4,000. 600
iar value +
That. sol In small dahs on the 81
market. or II all could have been a
odd al mgiet prices. would have "a
mounted tahout "a third or n half r,
IN aiition % that figure. q
wouldn't g. :.