Las Vegas optic., 1914-10-17
DANIEL 6. RIED Was
MAN IN CONTROL
EVIDENCE IN THE ROCK ISLAND
CASE is GIVEN BY Nc
MURTRY

Washington, Oct 17.-5ome details
concerning the acquisition and sub
sequent sale of the Frisco lines at a
loss of millions were develop today
when the investigation into the finan-
cial operation of the Chicago, kock
Island & Pacific was resumed before
the interstate commerce commission.
George McMurtry of New York, a
| director Of the Rock Island operating
company and of the New Jersey hold
ing company of the Rock Island, gave
] testimony tending to show that the
board Of directors practically was
dominated by Daniel G. Reid. The
witness said he knew personally little
concerning the financial operations of
the several companies.
Upon cross examination Mr.. McMur-
try said that as usual in such com
pany operations he relied on the re-
ports of the executive committee
which had direct charge Of them
Mr.. Folk inquired why the system
had gotten into so serious tangle
of financial difficulties, and wanted to
know if it were not because of an
over-issuance of securities.
Il am not capable of answering that
Question" replied Mr.. Yoakum, q
don't know enough about the present
!condition to furnish proper answer"
The loss to the Rock Island railway
through its purchase and subsequent
sale Of the stock Of the Frisco lines
was the difference between $61.5O ard
$3.50 a share, according to B. F. Yoa-
kun of New York, who conducted the
negotiations for the Frisco stock
holders. The total amount of actual
loss, Mr.. Yoalum thought, was about
$7,5OO 900.
Mr.. Yoakum became member of
the various Rock Island boards when
the Frisco stock was acquired. He
said that while the control Of the
Frisco was in the Rock Island, com
petition between the two lines did not
cease,
What was the reason for the re-
purchase of the Frisco by you and
your associates?7 asked Mr.. Folk.
We'll, l believed in the Frisco and
believe in it yet l dealt concerning
the matter with D G. Reid, principal
". We agreed on a price Of $3.50 a
share, and my associates and paid
for it in cash. Personally, | took
about 10000 shares"
Did you get the actual stock when
iIXou, paid your money?" Mr.. Yoalum
was asked.
''You bet did" replied Mr.. Yoa
kun. Il was not member of the
board of directors Of the Rock Island
Company when the loan Of $7,5O0.OOt
was authorized. The dissolution be
tween the Rock Island and Frisco was
entirely friendly and it resulted, d
course. in a dissolution Of other com
mon interests"
Discussing the acquisition by thu
Rock Island of the Chicago & Alton
Mr.. Yoakum said he participated Il
that purchase as one Of the directors
of the Rock. Island.
Il purchased mucn OF the Altol
stock in my name through six d
seven brokers. Other blocks Of thu
stock were purchased in the names
of w. D. Leeds and William H. Moore
TO get a majority Of about 100000
shares and a railway property is
J pretty good job. OF course we had t
} keep the matter quiet"
r WAS not Mr.. e. H. Hartman II
control Of the Alton at that time?
asked Mr.. Folk.
Il think he was"
"Mr. Hartman was IN Europ
then" suggested Mr.. Folk. was tha
the reason you were quietly purchas
ing the property2D
We'll" said Mr.. Yoakum. 1t wa
a propitious time to make the pul
chase"
Mr. Yoakum explained that h
and Messrs. Reid, Leeds and William
III. Moore became members Of the AZ
ton board and also members Of tn
Chicago & Eastern Illinois board, be
cause the properties were contr0lle