South Bend news-times. (South Bend, Ind.) 1913-1938, 1914-07-13
INTERESTS SEEK
To GET CONTROL
OF WABASH LINE
Pep. Townsend Claims That
information Indicates Plot
to Loot WabaSh-PittSburgh
Terminal Company.

WASHINGTON, July 13.-Charging
that information which he has receiv-
ed indicating that the plot 10 loot the
wabash. Pittsburgh Terminal Rail-
road company was the goal aimed at
almost from the beginning OF the
project. Rep. Townsend Of New Jer-
sey. pointed out Sunday in an exclus-
i've interview the need Of an immedi
ate investigation OF that railroad by
the interstate commerce commission.
The difference, he said, between the
New Haven loOting and the Wabash
Pittsburgh manipulatiOns may be one
OF intent merely and the plan from an
early stage was TO acquire the former
property BY plain robbery under legal
form.
Mr.. Townsend intimated before the
house interstate and foreign com
meTce committee, which is considering
his resolution demanding investiga
tiOn, restitution and prosecution of
the lOOterc, that unnamed interests
were consplring to obtain control OF
the property at a sacrifice sale.
Hearing On "Wednesday.
on next Wednesday the committee
Will conduct a preliminary hearing 10
ascertain part of the testimony which
would be forthcoming in a later inves-
tigation. Joseph Ramsey. jr., former
president OF the Wabash, Pittsburgh
and Wheeling and Lake Erie railroads
has volunteered to waive immunity
and Will appear before the committee
as a witness. others named by Con-
gresham Townsend in connection
with his demand for an investigation
as the managers who organized the
syndicate are George Gould, Louis
Fitzgerald, Myron T. Herrick and
James Hazen Hyde.
THE investigation" said Mr.. Town
81
ton since the banking house involved
instead OF being already on the de-
fensive, seems 20 enjoy astonishing
favor in high quarters.
There is circumstantial evidence
TO create the suspicion that the wreck
Of the Wabash. Pittsburgh was the
goal aimed at almost from the begin
ming.
Part of the Gould System.
1.-THE Wabash Pittsburgh was ere
ated as a part of the Gould interests
in their efforts 10 provide an adequate
freight and passenger entrance into
Pittsburgh for the Gould system of
railroads. Such an entrance was JUS
tifiable on business grounds. Prior TO
the construction work, very favorable
freight contracts were made through
Carnegie and others and the under
taking was largely in response to the
earnest requests and promises of sup
Pittsbur gin.
Nothing in the mass of data which
has come to me since 1 introduced the
resolution calling for an investigation
leads me to suppose that the property
underlying the $50, 900 four per
cent bonds issued was not more than
full security for the bonds. That
is the queer thing about this tangled
tale Of high finance that l want in
formation on.
The most respectable bond houses
in New York, Boston, Philadelphia
and Baltimore recommended and
sold these bonds TO their most con-
servative clients at from % to 95.
They believed them worth the price
and l believe they were too. 1 have
sound expert advice that the physical
property of the terminal railroad
company was worth more than $780,
100000 and the franchises. freight
contracts and other assets made them
worth much more.
Is Financial Wreck.
Nevertheless the company is now
in the hands of receivers, the interest
on the bonds has not been paid for
years and receivers notes are prior
TALLY able TO earn interest on more
than the full value of the bonds, is a
financial wreck. L want to know who
wrecked il and why.
1.-The interstate commerce COM
mission is the logical body TO intervene
and have control Of the reorganiza-
ton. The bond holders can do moth
ing by themselves because they can
not unite for a common defense.
II we as nation are To enjoy fl
nancial health some legal or admin
istratVe process must be found
whereby when interests having prac-
teal control OF a corporation so ar
range its finances that insolvency is
inevitable the same guilty interests
shall not then be able 10 take ad-
vantage OF that insolvency TO appro-
pirate the property of small investors
az a price far below its Nalue y