Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-10-17
ROCK ISLAND K. K.
DIRECTOR FOLLOWED


member of the Rock Island boards since
1902. has not resigned and has no imme-
date intention of so doing.
George T. Boggs, assistant treasurer of
the Rock island Company of New Jersey
and director in a few of the Rock Island
subsidiaries, said he did not regard rail-
road rates as a tax upon the public, be-
cause the public received full value for
their money He believed directors
should be permitted to exercise their
judgment IN matters of policy unham-
pered by public interference.
This opinion was evoked by series OF
Folks questions following Boggs' state
ment that he approved the s7,50o,OoO loan
to the Rock Island Railway Company.
He said he approved both the purchase
and sale of the Frisco system.
Folk learned from this witness that the
sole source of income of the Iowa Hold
ing Company was dividends on S71, 900
worth OF railway bonds 1t held, and that
the sole source of income of the Rock
Island Company of New Jersey was divi-
dends on its holdings of Iowa Company
bonds.
The railway company took bonds from
the Rock Island Railroad Company when
it lent the latter concern $,50o,ooo. Folk
asked Boggs what these bonds, the solo
security for the huge sum, would bring in
the open market. Boggs admitted they
are practically worthless, and that the
s7,5Oo.OOo is really a total loss.
Folk asked Boggs II he were not a
dummy director. IT would hardly say
that" replied the witness.
Mr. Bcggs said he did what Reid told
him to, and acknowledged that he had
received a gift of $4,000
DREAM OF CONSOLIDATION.
Benjamin F. Yoakum, to whom the
Rock Island sold the Frisco road. was
the next witness.
What was your dream OF consolidation
when you bought the Chicago and Alton
for the Rock Island?" asked Counsellor
Folk.
dream" replied Mr.. Yoakunl- IT merely
acted with others in gathering in the
stock"
Did the fact that E. H. Hartman. the
owner of the Alton. was in Europe
then have anything TO do with the pur-
chaser" asked Folk.
well, 1t was a propltious time" an
swened the witness.
did you not take advantage OF Harri-
mans absence to buy the road?"
II would not say that II happened
that Hartman was in Europe; it hap
pened that the Rock Island wanted the
Alton. and 1t happened that we bought
it"
PURCHASE OF FRISCO.
The inquiry then turned on the pur-
chase of the Frisco. Yoakum said that
he had sold the road to the Rock Island
iy, toO2 "a IA0 and bou1bt ~ bscL In tahT
at S7la Folk asked him why he bought
back the road. II believed in it," said
Yoakum land I still believe in it," Folk
asked the witness II the consolidation of
the Frisco with the Rock Island was
successful. Yoakum was doubtful, At
least, he said. the Rock Island was glad
TO sell it back to him. and he negotiated
the resale with Daniel G. Reid
To do this Yoakum said he went among
the ST. Louis men who were interested
in the Frisco road and induced them to
agree TO buy blocks OF stock. He him
self bought 100000 of stock.
Folk asked him il he had known II
was necessary for the Rock Island Rail-
road Company 10 get the Rock Island
Railway Company 10 obtain from the
First National Bank OF New York loan
of S750O,0O0 before the resale could ~
completed. Yoakum said that was none
OF his business.
Yoakum admitted that he had resigned
from the Rock Island board at the meet
ing at which It was decided TO negotiate
the loan.
Yoakum said that when the Frisco was
sold back 10 the original Frisco crowd
there was "a friendly dissolution of in
terlocking directorates.
Counsel Walker, for the Rock Island,
brought from Mr.. Yoakum the statement
that the Rock Island and Frisco, even
after the efforts OF Moore. Leeds, Reid
and Yoakum to combine them. were not
strong enough TO drive other carriers
from disputed territory.
IF the line Is overburdened with water
ed stock" said Yoakum, 1T is not the
fault OF the parent company but OF ths
subsidiaries"