Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1914-10-06
than did the revelations OF the looting

than did the revelations of the footing
of the New Haven system.
Three big Investigations are practi-
cally in shape now for public dis
closure, and these are expected to lead
to others. In fact, the commission is
using the power granted to it under
the authority to take the physical val
uation of the American railroads to go
into a thorough study of the financing
of the great trunk lines and their sub
salaries.
Following the revelations of the New
Haven case last spring, complaints of
other financial jugglery of railroad Sc
curities began pSuring in on senators
and representatives
The latter responded by introducing
resolutions instructing the interstate
commerce commission to investigate,
as it had in the New Haven case.
Two of these resolutions were passed
one authorizing an Investigation OF
the Rock Island, the other an investi-
CATION of the Rock Island, the other
an investigation of the Pere Marquette
and the Cincinnati, Hamilton & Day
ton.
Since then the agents of the COM
mission have been busy collecting
data to be presented to the commits
sion.
Accountants employed by the COM
mission have been delying into the
books of the three railroad companies
for weeks, and have about finished
their task. The roads have not at
tempted to obstruct this work.
Joseph w. Folk of Missouri, chief
counsel for the commission, will be
in charge of the investigation. For
days he has been doing little else than
preparing the cases to be submitted
at the public hearings. Mr.. Folk said
yesterday that the Rock Island inquiry
would be first. He thought this inves:
tigation would begin about the final
week in October.
The general story of the charges is
known to involve the banking firm
of Moore, Reid & Co, who bought the
control of the Rock Island for sum
said to S9O,O00,00O, getting stock to the
par value of S71,000,000. The firm is
said TO have cleared up S60,000,000 in
the transaction, which involved the
so-called Chicago * Alton deal.
The commission will attempt to
prove that Moore, Reid & Co. organ
lied two holding companies as part of
the device for disposlng of the Rock
Island at a huge profit. One of these
holding companies was Incorporated Al
New Jersey and the other in Iowa
Each was capitalized for $3.50, 100000.
The stock was declared to be fully
paid up, but, the commission alleges,
hn of 81
other with its own stock at par. In
other words, they traded even, and no
actual money changed hands.
Then, it is alleged, the financiers
sold the Rock Island to the Iowa
holding company, receiving in return
for the ST1, 0OO,0 600 Rock Island stock
the S15000O,00O New Jersey holding
stock, or an apparent profit
if SEQ, 100000. allowing that the Rock
Island stock was worth S9O,0OO,OOO.
The financiers then sold the New Jer-
sey stock to the public at an average
price of $50 a share.
After going into the financial de- |
tails it is the purpose of the commits
sion to show the physical result upon /
the Rock Island railroad property. 1t |
Is alleged that the stock transaction /
resulted in the virtual wrecking OF the /
road. Its rolling stock and right of ,
way have deteriorated badly, it is al /
eyed.
The Pere Marquette Cincinnati. /
Hamilton & Dayton case will bring in /
some of the most famous names in .
Wall street. The scandal grew out of
he efforts of a group of promoters 10
orm a north and south trunk line by
merging the Pere Marquette and the
,incinnati. Hamilton x Dayton.