Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1915-06-05
WRECK Of ROAD
DUE To JOBD|NG
BY F|NANC|ERs
Story Of Rock Island Is.
Brought Out at Hearing Be-
fore Interstate Commerce.
Commissioners,

tef hONNlhG JOURNAL sPtCiAL Athhtp WiNtl
Washington. June 4--How the Chi
cago, Rock Island & Pacific Railway
Co. was sent into the hands of re-
eeivers six weeks ago was described
today when the Interstate Commerce
commission resumed It's investigation
of the roads financial troubles. The
Inquiry may be completed tomorrow.
Roberts Walker, of counsel for the
Rock Island, declared ne prepared
the petition presented to Judge Car
penter, of the Illinois federal court,
asking that receivers be appointed,
and also framed the answer by which
the company consented, without for
NAL action by the board of directors.
He said receivership was the only
way in which the property could be
maintained and that the consent OF
the vice president of the road to a re-
ownership was as effective as that of
the board of directors. BY the method
adopted, he added publicity was
avoided which might have resulted
in injunction proceedings IL the board
had acted formally.
Examined by Untcrmycr.
For several hours, Samuel Inter
myer. counsel for minority stockhold-
amined Mr.. Walker as TO the author
ity upon which he acted The witness
explained that he consulted with Will
liam II. Moore, #. l.. Hine and T. M.
Schumacher, of the board of direc-
tors, and that they had assured him Of
the attitude of others on the board.
Two Of the directors OF the road Ar
thur Curtis James, Of the Phelps
M 90 inf
were examined by the commission.
Mr.. James said the first he knew of
the proposed receivership was on
April 19, the day before the receiver
was appointed. on that day, he said,
Mr.. Schumacher came to his office
and reported he had, by accident,
learned at the Rock Island offices
that application was to be made for
a receivership The witness told of
conference participated in by himself,
Mr.. schumacher, Elmer Roosevelt
and other directors to consider the
course to pursue, at which after
agreeing that a receivership was in
evitable they decided not to oppose
the move.
II was surprised at the appllca-
ton" he added, and If | had been
/ would not have advised
it,"
Phelps-Dodge Holdings.
Mr. James said that he had assist
ed the road in borrowing S1,50O, 600
on March 81, so as to tide the stua-
ton over until new directors were
hoping that they might carry
the company along. As to his own
holdings, he said, members of Phelps
Dodge K Co. had bought, in 1910, $4,-
100000 worth of stock in the Rock
Island holding company organized in
New Jersey, and had lost heavily. This
assets, he explained, had
been sold out
Ogden Mills testified he had hoped
the new directors would be able to
keep the company going and hence
was willing to aid in the March 81
loan. He told of selling 5000 of his
5000 shares of Rock island for s36
a share on April 16. few days after
the directors election and four days
before the receivers were appointed.
Artificial conditions in the mar
ket, created in a perfectly crazy way,
showed somebody was pushing the
market up he said, land | felt en-
titled to take advantage of it,"
Didn't you know papers had been
prepared for receiver?r inquired
Chief Counsel Folk. for the commits
sion.
Receiyership Necessary.
81 didn't know any papers had been
prepared for the appointment but
anybody with any intelligence knew
that conditions had not improved, !
The witness answered. Every iinan- !
4faT l.
he obligations coming due and the
condition the company was in. The |
igures which were placed before the
BOARD of directors on April II show |
ID the situation. hoped that the new
directors might find a means of es-
,aping."
you sold your stock to escape2"
Mr.. Untermyer. who re-
allied that the Rock Island stock sold I
~ the witness, at 1856, had gone from
'20 to $3S during April and fell If
cen points on the day of the receiver
hip.
II sold because the stock was too !,
zig" said Mr.. Mills. Mr.. Mills said he
rad no information as to who ma
lipulated the market. He said the
ate years William II. Moore. Daniel
J. Reid and w. b. Leeds in his life
ime, were the controlling forces in
he company and that of late the
had been considered in
he hands of Phelps, Dodge 4 Co.
Nlanulpulations of Harding
] Horace Harding, Of New York
brokerage firm, told of owing ten
hares of stock, which he sold dur
ng the rise in April and of organic
ng the movement to elect the four
Sheldon committee direc-
ors on April -. Three of these can
lidates We're elected.
II was acting purely in the interest
If the public and Of some Of the
rustees of the estate" said Mr.. Hard
ng when asked why he became IN
crested in the election Of directors.
lie declined to testify as to his busi-
less relations with Mr.. Moore or Mr..
Reid or TO give the number of shares
# Rock Island sold or bought by his
irm during April. Later he took the
question under consideration after
Ir. Untermyer said he was seeking to
how that Mr.. Harding had acted for
Moore and Reid in the election.
Samuel NJ. Weinberg, a Baltimore
told of increasing his
ve-share holdings of Rock Island
took in April because Of the flow
,ry statements sent out by commit
ees seeking proxies.
Represents Minority.
Samuel Untermyer, representing y.
4. Amster of Boston, director, leo
Walker to tell how the Rock Island
n March 81 borrowed SI50o,0OO OF
he Bankers Trust company on col