The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-08-18

among Its assets certificates OF indebted
ress OF the Trinity and Brazos Valley
Railway Company carried at a book
value OF s3.ssi.ss3. The Trinity and
BrAzos Valley Railway was then in
the hands of a receiver and was already
facing a dencit of $4,000. 900. with a
practical certainty that this amount
would Increase from year to year. 1t lie
apparent. therefore. that his item OF
more than $500. 900 was based upon
securities which were known to be
practically worthless.
The railway company carried as as
sets bonds OF the Toledo. st. Louis and
Western Railway Company at a book
valuation OF $4,000. 900. secured only by
stock of the Chicago and Alton Railroad
Company which had n market value on
June 30, 1915. o In excess OF $500
900.
The railway company also carried as
an asset OF 100000 the stock OF the
Nebraska Central Railway Company and
the Nebraska Construction Company. 40
auired as an incident TO the compromise
with c. II. venner. These so-called
securities were reported to the stock
holders as having a par value OF nearly
100000 that they were In fact worth
less is indicated by an official suggestion
on behalf of the Nebraska Conservation
Company hat the commission be advised
THAI ~thatcarTier had no existence ex-
cept on paper. having no railroad in OPP
Grafton or other tangible property
The directors also reported as assets
the 5 per cent. debenture bonds OF the
Iowa Company. which were IN fact
worthless. but which were reported as
worth nearly $4,000. 200.
Tn view OF tire fact that the re-
ported value OF the securities listed for
the year 1914 was nearly SIS. 0oO. 900 in
excess of their actual value, instead OF
a surplus OF more than $4,000. 600
claimed by the railway company. there
should have been shown a deficit OF
over 1 1900. 900.
Another misleading and Objectionable
practice OF the railway company officials
the failure to state on the payroll
the true amounts paid to its officers.
The publication Of misleading reports
to stockholders cannot be too severely
condemned n the individuals guilty OF
such acts should be subject to adequate
penalties"
Action BY c. II. venner.
or a transaction involving c. II. Ven
ner of New York city the commission
says:
"A significant transaction is that
kfVNlUk oul OF tne action OF u. n. VEN
ner. a stakeholder OF the railway COM
pany. He made demands upon the offi-
GERS of the railway company IN D@cem-
Der. 1902. and in January. 1903. fer a
list OF its shareholders. Being ignored
he Instituted on January 81, 1903. a pro-
ceeding in a State court OF Illinois 10
enjoin the organization OF the holding
companies and the exchange OF railway
company stock for their securities.
In February and March. 1904. the
railway company paid Venner 1921. 900
ostersibly in consideration OF his deliv-
cry 20 1t OF securities OF the New Jer-
sey company and the railway company
valued at ssi 900 and stock - the Ne
braska Central Railway n OF the Ne
brasks Construction Company OF a nom!-
nal value OF s20O. goo.
"Thereupon the suit to restrain the
holding company's plan was dismissed.
Neither the Nebraska Central Railway
Company nor the Nebraska Construction
Company had any road or other tangible
assets ard their stock is therefore con-
sidered TO be without value. TIE conclu-
sion is obvious that the payments - Ven
ner were In consideration OF his refrain
ing from further prosecuting 81 the
courts MS opposition TO the synd!cate's
plans. The railway company Incurred
in this litigation expenses amounting 90
about $1,000"