The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1914-02-18
ASSOCIATED
PRESS BONDS
Organization Controlled BY a
Clique and is Mutual IN
Name Only is Charge
Made by Foulke.

L United RreSS Leased Vine SeTVlCo.1
HARTFORD, Conn, Feb. 18.-As-
serting that the Associated Press is
controlled by clique Of bondholders
and is mutual in name only, William
Dudley Foulke, head of the National
Municipal League and former chair
man Of the u. S. civil service commits
sion, made an appeal here last night
for action by Attorney General Nc
Reynolds upon the application Of the
New York Sun for federal investiga-
tion of the Associated Press. He
spoke before the Hartford Get-to-
gether club and discussed in detail the
methods and inside workings OF the
Associated Press. He was answered
by Don G. Seitz, of the New York
World. Foulke explained the bond
control Of the Associated Press as fol-
lows:
| Article VII, section / of the by
laws provides that each member may
cast one vote by virtue of his mem
bership and such additional votes as
he may be entitled to cast as the hold
| ier Of bonds issued by the corporation.
1 Article XIII, section 2 provides that
4 the corporation may issue bonds not
to exceed $150,0O0 and section 2 pro-
lvides that the directors may authorize
] the issue Of such bonds, to such per-
sons including themselves, as they
may deem advisable, these bonds how
ever to be redeemed If they come in
i to the possession of those who are
mot members. Section 3 provides
that the registered owner Of any such
!, bonds may waive his claim for interest
i and cast one vote for directors upon
each $25 of such bonds registered In
Ibis name, but shall not have the right
Ito vote upon more than $1,000.
/, 1T is perfectly clear that by tnis
J, section the control Of the corporation
] can be kept in the hands of the com
few persons (themselye
/. foften directofs) to whom the boart
undetermined to grant this power. Th'
4 annual revenue of the Associated
j Press is about s3,000,000. Thes'
bends could be paid any day. Is i
: not manifest that they are kept alive
in order to keep the control withir
! this inside ring? Suppose the fifteer
, directors each took $1,000 in these
!. lbonds. They would thereby be en-
1 titled to 500 votes and by dividing
-f few thousand more among those wh'
/ would aid them, they could overcome
the vote of the remaining member
j. and keep themselves in power indefin
: itely or do whatever else they nigh
r desire with the corporation. Their
d are occasionally changes in the diret
!. tors. but the pow5r of control Is a,
/, ways exactly where the few men VIII
: own the bonds may want to put it an
a single vote Of each member as
mere member becomes all but value
: LESS. 1t is the votes of bondholder
that count.
s "In the light OF this disclosure tn
n purely mutual character of the o.
!. sanitation seems illusory.''
Seitz, replying to Foulke, pointe
a. out that VIM r. Nelson, of the Kar
r. sas City Star and Samuel Bowles
I. the Springfield Republican, two dire
4 tors of the Associated Press. In whoI
Foulke had expressed confidence, ha
le been leaders in recent years OF Il
b, yestigations conducted by the men
bers into many Of the matters di
70 cussed by Foulke. No exception wa
\. taken by Seitz to the fact regardin
! bond control as quoted from the b.
a. laws by Foulke. Seitz devoted hin
self mainly to vigorous defense
~ newspapers against alleged infiuenc
~ from advertisers. He defended tn
"a profession in general and gave man
- Illustrations to bear out his conte1
ton.
er
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