South Bend news-times. (South Bend, Ind.) 1913-1938, 1913-11-20
Transactions in Which Parent
Company Figured Assured
Profits to Men Who Approx
ed of the Purchases.
MILLIONS OF DOLLARS
IN THEIR POCKETS
Tip of Coming ReCeiverShip
Saved Friendly Bank Off,
CiaI Tie-up of Their InStitu-
tons Funds.

ST. LOUIS. Mo-, Nov. 60 n.
Nance treasurer OF the st. Louis,
Mexico & Brownsville railroad. a sub
sidiary of the ST. Louis < san Fran
cisco. telegraphed 10 the treasurer OF
the latter road that the Brownsville
road could borrow from a bank I'm
Kingsviile. Tex. if ne could De as
sured that the treasurer of the Frisco
would tip Off" Nance y hours be-
fore any receivership proceedings
were instituted against the Browns
Vile
This evidence was brought out late
Wednesday at the Interstate COM
merce Commission investigation OF the
Frisco receivership. Frank II.
Hamilton. treasurer OF the Frisco,
was on the stand and asked about a
telegram which Nance was alleged to
have sent.
In the telegram Nance asked per-
mission TO make an overdraft OF S15,-
600 against a 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. +. Brown. special exam
liner, showed from kilograms that
Nance borrowed $25, 900 from a bank
in Kingsville on June u. 1913, and
repaid it on July 4. The receivership
petition against the Brownsville was
filed three days later.
Men Cleared 100000.
The names Of five promoters who
were members OF the syndicate that
made $4,000 out OF the sale OF land
donated by citizens and towns OF Tex
as to aid in the building OF the
Brownsville road were given TO Com
missioner Clark Wednesday by A. T.
Perkins. syndicate manager. The five
men named were Benjamin +. Yoak-
UNI, chairman OF the board Of direc-
tors of the Frisco until the road went
into receivership; Samuel w. For
dyce, ST. Louis capitalist. Robert :.
Bookings president Of the board OF
trustees Of Washington university:
Thomas II. West. chairman OF the
board Of directors of the ST. Louis
Union Trust company and now a
Frisco receiver and Edward s.
Whitaker, a broker.
Perkins testified that the syndicate
sold the land and used part OF the
proceeds in making Improvements in
the territory traversed by the
Brownsville road. The purpose Of
these improvements was 10 develop
traffic. Later these improvem ents
were decided 10 the West Texas Alb
stract & Guaranty company which
the syndicate acquired.
Mr.. Perkins said the total profit Of
the syndicate that sold the Browns
Vile road to the Frisco was $1,000
600. each subscriber 10 the syndicate
realizing about % per cent profit.
There were 90 persons IN this syndi-
cate. Among them. according - the
testimony of Perkins. were :. " Eel
ton OF Chicago: David r. Francis Of
ST. Louis; the St Louis Union Trust
company. the Mercantile Trust COM
pany of St Louis, and r. G. Simmons
of St Louis.
Huge Profits Made.
According 90 evidence brought out
az the hearing Tuesday and Wednes-
day the syndicate profits made by the
construction of subsidiary lines and
their sale 20 the Frisco now totals
S7O38,0OO. In many Of these syn
dictate officers OF the Frisco. IL has
been brought out. were interested.
Treasurer Hamilton testified that
the Frisco borrowed on short time
notes in 1911 S6.00O.00O. $4,000 600 in
1912 and S1O.OOO.0OO in 1913. In
April 1913. the road sold 20 Speyer
q Co Of New York $4,000 600 gen
eral lien bonds. These bonds were
sold by Speyer * Co. 10 French in
vestors
He said that when the receivership
was instituted against the Frisco, the
road had between $500 600 and So
600, 900 OF unpaid vouchers for gen
eral expenses such as coal etc
Treasurer Hamilton also testified
regarding the $500 geo loan made BY
the North American company 90 the
'Frisco-the loan or which the re-
ownership proceedings We're based.
The loan originally was for 1925, coo,
according 10 Hamilton. and the orig
inal security was SS.000.0Q0 OF the
bonds OF the Arizona & New Mexico
Land Co. After the loan had been
reduced 10 S40G. 600 James Campbell
OF St Louis. president Of the North
American company asked for addi-
tional security. The road then put up
IS, 10000 OF the capital stock and
$3.50. 900 OF the bonds OF the New
Orleans & Texas railway.