Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1914-10-17
Probe Begins Under ResoIu-
ton Adopted by United
States Senate With View to
AScertainlng Facts,
HIGH FINANCE GETS
BIG SHARE OF LOOT
One Deal Involving Only S9,-
100000 Results in Loss of
More Than S6,000,000 to
Stockholders,

fsv aoHnins JOURNAL srtoiAl trssto wlrsi
Washington, Oct l6.-An apparent
loss of $500. 600 In one bond trans-
action: losses. indefinite In amount but
aggregating many millions, n the ac-
lquisition of the Frisco lines and the
Chicago a Alton railroad and a loss
.of S756. O00 on the stocks and bonds oi
the Deering Coal company were dis
closed tOdav at the hearing of the In
terstate Commerce commissions n-
'vestigatlons Of the financial operations
Of the Chicago. Rock Island 4 Pacific
railway. Only two witnesses were eN-
lamned.
The hearing IL for tha purpose Of
inquirlng into charges made on the
floor of the senate that through the
manipulations OF "A small number OF
.fnancicrs ard stockholders the Rock
Island had suffered enormous losses
lAs a result of the charges the senate
adopted a resolution directing that an
Investigation be made by the commits
sion. The foundation FOR the inquiry
was laid 10y experts of the commission
who had gone over the books OF the
railroad.
il was believed todny that the hear
ing Will continue for only q day or 80
land be resumed later on
Detailed Investigation.
Frederick g. Sharood. al examiner
Of accounts for the commission, gave
In detail the wcsulfa of his inVestiga~
itlon OF the books of the system. con
sisting of the operating company and
the two holding companies.
Mr.. Shafood testified as to the sal
aries received by various officers. Ns
chairman Of the board 4. r. Gable
received annually an amount varying
from s24,0 900 to $4,000: W. y. Leeds
ias president. also received s21, coo for
Ia time and later $4,000 a year r. T..
Winohell as third vice president was
paid S25, 900 wear and as president
$4,000. b. +. Yoakum. as chairman
tof the board WIS paid $4,000 year.
and l.. +. Loree received S37.500
A voucher for $4,000, the proceeds
lof which are paid to Robert Matther
counsel for the railway company was
offered in evidence
File Had Disappeared.
''The index shows the amount was
paid for campaign purposes the wit
ness said "but | was unable to find
the correspondence file respecting the
matter. The file had disappeared.
Two other vouchers for $4,000 each
also were Offered IN evidence No in-
formation was obtainable as To the
iuse to which that money had been
iput, Sharood said.
Describing the acquisition Of the Sc,
Louis Kansas city & Colorado road
bv the Rock Island in 1902. Sharood
isaid David K. Francis and lonn
Sohulin. of 81. Louis, gave s2,000,00O
in Rock Island stock for 5000 900
in st. Louis, Kansas City q Colorado
bonds. and that the Rock Island also
assumed an Indebtedness of $500
00O from the absorbed road
Average Cost Per Mile.
"The average cost Of that line to the
Rock Island he added, was SbN-
9SS a mile.
"Thlt. of course, includes 81 Lous
terminal facilities ana trackaee fa-
lcilities over the Wabash - counsel Tor
the Rock Island suggested.
"Of orrse." Sharood answered
MIR. Sharood declared the loss to the
Rock Island railroad was Gust about
ss5,085. 600" and that it was carried
on the company books as an asset
In explaining the acquisition of the
Chicago x Alton road by the Rock ~
land Railway company, he said
Heavy Loss In Alton stock.
"My estimate Of the loss to the rail-
way company on the Chicago & Alton
transaction Is sG.370.S41 and that too
on an Investment Of only a little over
sg. .O0O, ,000"
The examiner said William H.
Moore was given voucher Of The
Rock Island Railway company for
Ia bout $1,000 Ia reimburse him FOR
llogses sustained In supporting in The
market the bonds Of the Rock island
Railroad company"
Mr.. sharood submitted an agree
lment dated May 6. 1903. BY which the
Rock Island Railroad company exc
euted bonds Of SIG, 500. 600 10 be de-
lposlted with J p. Morgan 4 Co..,
bankers Of the Frisco transaction.
How Stock Was acquired.
The firms commission was said %
have amounted to i.997,625 The
Il stock If The Frisco 50 acquired IT
4sf20 a share, the examiner said. sub
lsequently was sold or transferred 20
liz. f. Yoakum aud his associates for
is37.50 a share or S10.S52. 900. II be-
icame necessary for the Rock Island
railroad before it could turn over %
Mr.. Yoallim the Frisco stock 70 OBJ
tain $500. 600. That was borrowed
Sharood said. Of the First National
Bank OF New York.
| Counsel Folk for the commission,
brought out that the president Of that