The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-10-17
ROCK island WRECKED
by FRENz|ED FINANCE
Interstate Commerce Commission
Begins Investigation Of Rail-
roads Affairs.
TWO WITNESSES EXAMINED
Expert Examiner Testifies as to FIX.
travsgant Salaries Received by
Various Officers--Apparent Loss
OF $7,6OO,OOO In One Transaction.

WARRINGTON, October 16.-An ap-
parent loss OF $7500.00o in ono bond
transaction, losses indefinite In amount
but aggregating many millions In the
acquisition OF the Frisco lines and the
Chicago and Alton road. and a loss OF
S756.000 on the stock and bonds Of the
Deering Coal Company. were disclosed
, to-day at the hearing Of the Interstate
Commerce Commissions Investigation
OF tho financial operations OF the Chi
Cago, Rock Island and Pacific Railway.
Only two witnesses were examined.
Frederick c. Sharood. an examiner OF
accounts for the commission. gave in
detail the results OF his investigation
of the books OF the system. consisting
OF the operating company and the two
holding companies.
Mr.. Sharood testified as to the Gala
ries received by various officers AS
chairman OF the board, r. r. Cable re-
ceived annually from s24. 900 to $4,000;
w. b. Leeds. as president received also
$4,000 for time. and later $4,000 a
year. b. l.. Winchell, as third vice
president, was paid $4,000 a year, and
aS president $4,000; ID. F.. Yoakum, as
chairman OF the board. was paid $4,000
year and l.. F. Loree received $4,000.
A voucher for $4,000. tho proceeds OF
which wcre paid to Robert Mather,
counsel for the railway company. was
offered In evidence
The index shows that the amount
was paid for campaign purposes, said
the witness, but j was unable to find
the correspondence file respecting tho
matter. The file had disappeared"
NO INFORMATION
ON USE OF MONEY
Two other vouchers for $4,000 each
also were offered in evidence No in
formation was obtainaolc as to the
use to which that money had been put,
Sharood said.
Describing the acquisition of the
st. Louis. Kansas City and Colorado
road by the Rock Island in 1902. sha-
rood said David r. Francis and John
Scullin. OF st. Louis. received $1,000
600 In Rock Island stock for 5000, 900
in st. Louis. Kansas City bonds. and
that the Rock Island also assumed an
indebtedness of s4,50o.ooo from the
absorbed road.
The average cost OF that line to
the Rock Island lie added. was 49,
9ss mile"
That. OF course. includes st. Louis
Terminal facilities and trackage ia
cilittes over the Wabash?" suggested
counsel for the Rock Island.
"Of course" said Sharood.
F. l.. Hine. president Of the First
National Bank, Of New York. a direc-
tor I'm all three Rock Island companies.
was the only other witness. He said
he became director OF the Rock Is
land Railway In 1902 on instigntion
Of William II. Moore. and added that
the vote which stood in his name ac-
tually was the property of Judge
Moore.
APPROVED OF SALE
or FRISCO STOCK
AFR. Hine said he heartily approved
OF the sale of the Frisco stock to B. F.
Toakum and his associates. although
the transaction entailed considerable
loss. He explained the transaction by
which a loan OF s7,500,000 was obtained
by- the Rock Island. of New Jersey.
through the First National Bank. of
New York. the bank participating to
the extent Of $1.250.0Q0.
I'VE received" said the witness, "our
pro rata share OF the 135.000.0o0 paid
for the loan. Our bank could not legal
~ have made the entire loan OF $500
600"
The only source OF income Of tho
two holding companies was the Rock
Island Operating Company. the witness
said. which had exchanged through Its
stockholders about s71.o00,00o of stock
for nearly Ave times that amount in
securities of tho holding companies
stockholders owning about $4,000
Rock Island Operating stock refused to
exchange.
What consideration, as director.
did you give those minority stockhcld-
crs?" inquired Commissioner Glenn
cnts.
II never looked at the matter from
the viewpoint of the minority stock
holders" replied Mr.. Hine. II regard
ed 1t from tho standpoint of 90 per
cent of the stock"
WAS the transaction detrimental to,
or promotive OF. the interests of the
small stockholders" asked the com
missioner.
~ prefer not to answer that ques-
tion." responded Mr.. Hine.
After the examination OF witnesses
tomorrow. the hearing probably will
be adjourned for ten days.