Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1914-07-27
ROCK ISLANDS
DIRECTORS MAY
FACE BIC SUITS
Interstate Commerce Commits
sion Has Started to Inves-
tigate Roads Books.
LIKE THE NEW HAVEN CASE
Shareholders May Be Advised to Be-
gin Action to Recover About
$4,000, 900 From Directors.

completely surprised by last weeks
news that representatives of the in,
terstate commerce commission had
suddenly and unexpectedly dropped
down on the New York Offices OF the
Rock Island system and demanded
certain books and papers, with the
idea of making thorough investiga-
ton of that company's financial and
physical condition.
There is not the slightest doubt now
that searching investigation, such as
has just been completed in New Haven
will be made by representatives OF
the government in Rock Island.
1t should not be a surprise, either,
if, after the Rock Island investigation
is over, shareholders of the Rock Is
land are advised by the commission to
start suit against their directors to
force restitution. That was the ad-
vice just given to the New Haven
shareholders. and legal steps already
have been taken to follow it.
Urge Suit Against Directors.
Lawyers who know something about
what has been going on in Rock Island
since the Moore-Reid management as
sumed control in 1902 do not hesitate
to predict that the outside sharehold-
ers could recover in the neighborhood
of s2O.000,o0O by bringing a civil suit
against the directors.
Most of the company's directors are
very wealthy men. Here is a partial
list: William H. Moore, D. G. Reid,
F. l.. Hines, president of the First Ma
tional bank; James Speyer, senior
partner of the international banking
house of Speyer & Co.; A. ]. Miller,
partner in the foreign banking firm of
Boissevain & Co., which represents
the Holland shareholders; Ogden
Mills, capitalist; Benjamin Strong,
Jr., president of the Bankers Trust
company; James Mclean and Arthur
Curtiss James, partners in the very
wealthy firm of Phelps, Dodge &c
Co., and E. S. Moore, brother of Will
liam H.
These men, If necessary, could raise.
S20,000,0O0 with as little effort as
would be required for the ordinary
everyday business man to get hold of
$40.
Could Recover $7,5oO,oo0.
without question the sum of $780,
900 could be recovered by the holdeds
of the old Chicago, Rock Island & Pa
cific railway securities at one swoop.
The amount Is involved in the pur-
chase and sale of the Frisco. The Fris-
CO was Illegally purchased and illegally
sold by the Rock Island directors. At
this time 1t is not necessary to go into
the details of how that property was
acquired.
Rock Island is not as bad off as some
people have tried to make the outside
Rock Island bond and stockholders
believe. Since the reorganization was
Unexpectedly proposed last January,
members of the so-called bond and I
stockholders protective committe 6. |
have been working to create the inn |
preston that a drastic reorganization |
would be so severe that new low rec
ords for both the bonds and the stock |
would result. They did, as a result of |
the agitation.
Until Tuesday of last week 1t was
confidently predicted on all sides that
the proposed reorganization plan |
would go through. Then something |
happened, for 1t was announced that |
the proposed plan had been abandon
ed.
There is an explanation of why the
so-called protective committees sud-
denly abandoned the proposed reor-
ganization. A few days ago a promi-
nent Rock Island official went on rec
ord as saying that his company was
not in need of funds, and that 1t was
entirely unnecessary to impose the
So, 100000 annual fixed charges by SELL
ing the s3o.oOO.OO0 new preferred
stock
He declared that the new preferred
stock could be sold in small blocks
as needed, and IL that plan were car
ried out the large commissions de-
by the underwriting syndicate
would be avoided. At that stage the
interstate commerce commission
on the door and asked for the
books, etc.