Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-08-18
ROCK ISLAND HEADS
SCORED IN REPORT
Interstate Commerce Commission
Charges Railroad Directors With Be-
trayins Trust and Resortins to
Graft,

| Washington, Aug. is. = The inter
state commerce commissions report or
/ its investigation of the Rock Island
railroad financial affairs. made public
| here Tuesday, shows millions of dol
lars in losses in stock transactions;
charges the railroad officials with mis-
! representations in their reports te
) stockholders; discloses great profits tc
promoters of the Rock Island holdins
! companies and arraigns the syndicate
operations which began in the early
ntneties.
The interstate commerce commission
| broadly suggests action by the legal
Those guilty of misleading reports &c
quate penalties"
The aggregate losses to the Rock
Island in the Alton, Frisco and other
sion as follows:
Frisco deal. approximately $6,500,-
600: Alton deal, approximately ss,370,-
900: Trinity and Brazos Valley rail-
way deal, more than s4,500.000; Con-
solidated Indiana and Dering Coal
Companies at least s1,300,O0o and
to the coal companies can not be col
lected: contributions or gratuities to
officers and directors, about 100000;
expenses of maintaining and housing
holding companies. more than $4,000:
transaction of c. H. Venner, a stock
holder, s217, 900; miscellaneous and I'M
explained expenditures 372.523.
The items show an aggregate loss
to the railway company Of more than
| $40. 600 900.
In addition thereto it is to be noted
that prior to June 30, 1914. the rail-
way company paid to financial insti-
tutions in connection with the issu-
ance of bonds. commissions aggre-
eating more than s1,s0o.0O0 and sur
fered discounts of more than 3d.
100000
Scohe passive Directors"
In a general criticism, the commits
sion says:
The property of the railway COM
pany will be called upon for many
years to make up the drain upon its
resources resulting from transactions
outside the proper sphere in which
stockholders had a right to suppose
their moneys were invested.
This record emphasizes the need OF
railway directors who actually direct.
There are too many passive directors
who acouiesce in what is being done
without knowledge and without inves-
tigation.
"A director of a railroad Is quasi
public official who occupies . position
of trust. A director who submits blind.
~ to the exploitation OF his company
is a party to its undoing and he should
be held responsible to the same ex-
tent as if he had been principal in
stead OF an accessory before the fact.
The greater his prominence the greater
his responsibility and the greater his
derelicticn.
Clayton Act Remedy.
"The Clayton antitrust act, which
becomes effective Oct. Is, 1915, will
make it unlawful for any person at the
same time to be a director in two or
more competing corporations, any one
of which has capital, surplus or un-
divided profits aggregating more than
81, 900, 900, but common carriers are ex-
pressly exempted from its application.
TT should be just as grave an OF
tense for an official of a railway to be
faithIess TO his trust for financial gain
as 1t is for an elected official OF ths
government 10 betray his trust Tor
money reward"
The commissions investigation OF
Rock Island began in April, 1914, on
the commissions own motion. but fol-
lowed a request from the house COM
mittee on interstate commerce. stirred
by resolutions indicted in congress.
| After pointing to the fact that IN
| 1902 the Rock Island was thriving, It's
prospects promising. its stock selling IN
the world markets at more than $SSS
a share the report says that IN 1919
the shares had fallen to $50 ana that
the road now in receivers hands, al
tho the evidence shows the earnings
OF the road in 1914 were the largest
| IN its history.