The Washington times., 1914-10-17
DUMMIES" ON BOARD
OF THE ROCK ISLAND
"You May Call 1t That" Says
Director, Who Admits He
0beyed Orders.

Disclosures in the Rock Island in
vestigation by the Interstate Commerce
Commissioners today furnished story
of dummy directors voting at the nod
of Daniel G. Reid and William H
Moore, who head the powerful syndi-
cate. which Is said to have dominated
the Rock Island since 1902.
Two directors, George B. McMurtry
and George T. Boggs, Of New York.
both frankly admitted that they were
on the Rock Island directorate for the
purpose Of carrying out the will Of
Reid and Moore. Asked If he was
merely a dummy director, Boggs smll-
ingly replied:
Yes, if you please to call it that"
The rights of the public in railroad
affairs formed an important phase OF
the inquiry today. In response to a
question by Chief Counsel Folk, Boggs
declared he did not regard a railroad
director as a trustee for the public or
even a uuasi-public official. This pro-
voked a sharp reply from Commission
er Clements, presiding over the hear
ing, in which he vigorously scored this
point Of view.
The testimony Of B. F. Yoakum, the
railroad builder, former president of the
Frisco, and a former Rock Island o.
rector, described in detail his sale Of
the Frisco to the Rock Island in 1903
at 120 a share and his repurchase of
the same stock in 1909 at 3712 a share.
paper deal was the way he char
acterized it. The Rock Island, he said,
paid $3.50 each share and paid the
rest in ten-year collateral notes Of the
New Jersey holding company Of which
Frisco stock was the collateral. In
other words. Yoakum said, Rock Island
paid him s17,5oO.0OO cash for the Frisco
hor IN n
cash, six years later.
Yoakum "Put One Over"
How Yoakum put one over on the
| late E. H. Hartman in the purchase
of the Chicago and Alton. then con-
trolled by Hartman, was developed on
uestioning by Folk. The Rock Island
wanted the Alton, but waited until Har-
riman went to Europe.
time them said Yoakum, with a
chuckle.
When it was suggested by Folk that
fear of criminal proceedings against the
Rock Island directors by the Depart
ment of Justice had FASTENED the sale
Of the Alton by the Rock Island, Yoak-
UNI insisted this was untrue"
Things were going at pretty fast
gait among the railroads ten or twelve
years ago. he said. Those were the
We're started which didn't pan out. Take
the Western Pacific. 1t has spent
$50, 900 trying to put the RIO GRANGE
on the coast, and it is losing $4,000, 900
to 100000 in doing it.
Federau Control Urged.
Yoakum surprised the inquiry by ad-
vocating closer Federal control Of the
railroads. He went even further, favor
ing, he said, co-partnership between
the large carriers and the Government.
in which the Government should partici-
pate in the carriers earnings.
This would be good trade both for
the railroads and the public" he said.
Yoakurn: expressed his faith in the
Frisco and declared the Rock Island to
be one of the best railroads in the coun-
try. It's physical condition is as good as
any other railroad of its section, re de-
clared.
Mr.. McMurtry was the first witness
today He did not remember the
Frisco deal, he said. The Alton pur
chase was a mystery to him. he
testified.
You were on the board just as
figurehead?" asked Folk:
II was not active" McMurtry an
swered.
And you accepted what Reid said
whenever he made a notion"
Yes"
lid you know anything about the
s!on,0E gift to r. A. Jackson, the vice
president"
mo, SIR
Don't you think, you as a director,
should have frown when the comparE's
money was given awey?' Folk asked.
Yes, SIR
AS a business man, do you believe
one should be on board Of directors Of
a railroad without exercising his own
Judgment" Folk asked.
Il don't think he should.
Did you make a mistake?"
Il didn't have time to look INTO
things replied McMurtry.
Took $1,000 As Gift.
Boggs took the stand. Folk again d.
rected his questioning at the Reid
Moore domination.
You were there to do what they told
you" Folk asked.
Yes, if you want to put it that way
| represented them" he said.
Was 1t the custom to make gifts of
100000 and $4,000 to officials?'' Folk
asked.
NO, not the custom"
They gave you $4,000 once, didn't
they"
Yes sir
Did you ever stop to consider that
the funds in the railroads treasury
were a tax IN freight and passenger
fares on the public"
NO. sir
Dis you ever stop to consider that
a railroad director is A trustee for
the public-a quasi-public official?'
NO, sir"
Then the public has no rights in
such matters?"
1T depends on what you consider
the public"
Defends Frisco Deal.
Boggs was asked about the Frisco