The Sentinel=record., 1914-01-27


 $l2,179,1O5.9S, all of which. exceDr. ing $92DOO0. bears interest at 6 per cent.
 The ration of interest bearing sc curity,' the report says. ito the to- tai Of security outstanding is 96.06 per cent, an excessive ratio, even when compared with the Frisco, which has a ratio of S2.63 per cent"
 Desire of the Frisco for an en- trance into Chicago resulted in pur- chase of the Chicago and Eastern Illinois railroad in 1902 by the issu- ance of Frisco stock trust certif- cates upon the basis of $150 for the preferred and $250 fo- the common stock.
 Tn order to meet the fixed charges upon its stock trust certificates" the report asserts, it was essential that the Frisco should receive in divi- dends from the Chicago and Eastern Illinois 6 per cent upon the preferred stock and 10 per cent upon the com mon stock each year. On the prefer red stock per cent was paid each year. The dividend on the common stock has been sufficient to meet the interest requirement. on the stock trust certificates in but three years. The resultant net loss on the com mon stock amounted, as of May 27, 1913, to $l,7l0 3S&. which amount the Frisco paid in interest upon it's com mon stock trust certificates held by the public in excess of the dividends received on the Chicago and Eastern Illinois common stock.
 "The discount on bonds and notes other than short term notes issued by the Frisco and lnes which it con trols aggregated $22, 152 Go207
 The Rock Island secured control of the Frisco in 1905 through the purchase of the Frisco common stock and retained such control until 1909, when 1t disposed of it's holdings to B. F. Yoakum, Edwin Hawley and others. During the six years of Rock Island control, the Frisco issued more than $71 900 900 in short term notes. all of which were lquidated within the same period, except $l- 641 32912.
 During the same period the net increase in the funded debt, includ- ing equipment trusts, was $7S,0O0,- 000.'
 Of the policy of the Frisco the re- port says:
 The acquisition of new lines greatly in excess of construction costs and the sale of it's funded debt securities at extravagant rates of discount, including the payment of premiums of retired issues and com missions to banks and bankers on such issues, the investment in stocks of industrial companies, on which no dividends have been paid, the as sumption of heavy fixed charges for its Texas lines, as well as for the Chicago and Eastern Illinois, far greater than their value, have result ed in the net revenue of the Frisco being absorbed by such charges in sum which approXimates between $3,5OO 900 and s4,OOO,0O0 per annum.
 Of the Friscos investment in the stock of the Chicago and Eastern H. linois railroad the report says, the transaction showed a net loss of $1,- 710.38S to May r, 1913.
 "The progress of the receivership appointed for the Frisco July 10, 1913. is given in detail, showing that receivers have paid from current re- ceipts $3 709, ,539. 99 on account of ir debtedness incurred by the company prior to their appointment In addi ton, they have paid $l354,9O4.5S CT the principal of equipment trust oo- ligations. being the entire amount Ct such obligations matured during the receivership to November 30, t9l3' Interest coupons amounting to S2- 9Sl144.39 have been paid, as have also all rentals, taxes and sinking fnnd requirements, while an increase of $141 ,000 has been effected Ill ''e stock of material and supplies.
 "The amount of outstanding bonds in tine hands of the public" the re- nort says, "has increased during the same period $574,0O0 occasioned by the sale of an equal amount Of gen eral lien per cent bonds, whieh were disposed of by bankers holding such bonds as collateral for loans made prior to May 2S, 1913. The la blities of the company in the form of notes liquidated by the saie oi this collateral was $2S6,635.O1."
 The property investment or tne Frisco May 27, 1913, is given as $l''' 923 092 .77, with certain deductions reducing the hook value to $lo|zoo' 09277.
 -..t.< NhcLIEP MISSING,