The Birmingham age-herald., 1913-11-20
SAYS RECE|VERSH|P
PROCEEDINGS WERE
TIPPED OFF TO ROAD
Treasurer of System on the
Stand in Frisco Receiver
ship InvestigatiOn-Big
Loans Were Made

st. Louis, November 80. H. Nance,
treasurer of the st. Louis, Mexico and
Brownsville railroad, a subsidiary of the
st. Louis and San Francisco, telegraphed
to the treasurer of the latter road that
the Brownsville road could borrow from
bank in Kingsville, Tex, if he could
be assured that the treasurer of the
Frisco would Tip off, Nance 70 hours
before any receivership proceedings were
instituted against the Brownsville.
This evidence was brought out late to-
day at the interstate commerce commits
sion investigation of the Frisco receiver
ship. Frank II. Hamilton, treasurer of
the Frisco. was ON the stand and was
asked about a telegram which Nance
was alleged to have sent
Wanted Overdraft
In the telegram Nance asked permis-
sion to make an overtlraft of $15,001
against Kingsville bank. Hamilton, in
his testimony, said he did not remember
whether he gave Nance the advance tip
on the receivership proceedings against
the Brownsville line but d. K. Brown,
special examiner, showed from kilograms
that Nance borrowed $4,000 from a bank
in Kingsville on June u, 1918, and repaid
it on July 4. The recelvership petition
against the Brownsville line was filed
three days later.
The names of five promoters who were
members of the syndicate that made $780,
900 out of the sale of land donated by
citizens and towns of Texas to aid in
the building of the Brownsville road were
given to Commissioner Clark today by a.
I. Perkins, syndicate manager
Perkins testified that the syndicate sold
the land and used part of the proceeds in
making Improvements in the territory tra-
versed by the Brownsville road. The pur-
pose o fthese improvements was to de-
velop traffic.
Later these improvements were decided
to the West Texas Abstract and Guar
anty company, which the syndicate ac-
ouired
Mr.. Perkins said the total profit of the
syndicate that sold the Brownsville road
to the Frisco was $1,000, 600, each sub
scriber to the syndicate realizing about
IS per cent profit. There We're SO persons
in this syndicate. Among them, according
to the testimony of Perkins, were S. NJ.
FELTON, of Chicago, David r. Francis of
st. Louis, the st. Louis Union Trust conf
pany, the Mercantile Trust company of
st. Louis and e. c. Simmons of st. Louis.
According to evidence brought out at
the hearing yesterday and today, the syn
dicate profits made by the construction of
subsidiary lines ana tnelr sale TO the
Frisco now totals $7,03S,0 In many of
these syndicates officers of the Frisco,
1t has been brought out, were interested.
Secured Big Loans
Treasurer Hamilton testified that the
Frisco borrowed on short time notes In
1911 S6,00O000, $9,00O,OO0 in 1912, and s10.-
100000 in 1913. In April, 1918, the road sold
to Speyer & Co. of New York So, ,000 900
general lien bonds. Ths bonds were sold
by Speyer & Co. to Fre-1ch investors. He
said that when the receivership was insti-
tuted against the Frisco the road had be-
tween S2,500000 and S3,000,000 of unpaid
vouchers for general expenses, such as
ccal, etc.
Treasurer Hamilton also testified re-
garding the 100000 loan made by the
North American company to the Frisco
the loan on which the receivership pro-
ceeds were bases. The loan originally
was for $625,000, according to Hamilton,
and the original security was 100000 of
the bonds of the Arizona and New Mex
leo Land company. After the loan had
been reduced to 100000 James Campbell
of St. Louis president of the North Amer
lean company asked for additional Sc
curity. The road then put up S5,000,000 OF
the capital stock and $250000 of the bonds
of the New Orleans and Texas railway.