The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-03
SAYS ROCK ISLAND
AIDED DOUGH BAG"
Bondholder Charges Directors
Gave $4,000 in Roose-
welt Campaign.
ANOTHER S7,5O0,OOO SUIT

Charges that tho directors NJ the
Rock Island railroad authorized the late
Robert Mathcr. general counsel OF the
road TN 1904, to contribute $4,000 to "a
campaign fund, supposed to be that for
Theodore Roosevelt, IN order to protect
the directors from prosecution 10y the
Federal authorities for violations of nc
law, are made In a complaint filed I'm
the supreme Court yesterday against
Ogden Mills. q director OF the road, 20
hold him liable for excessive and inn
proper payments made out Of the rail.
road treasury
The suit was brought by Sadie 4.
Hidden In behalf of herself and other
hondhodcrs and was filed In the County
Clerks office ~ about tho same Cine
that another suit brought by n. l..
Amster and mine other plaintiffs agains,
Daniel q. Reid William II. Moore and
other Rock Island directors for $500.
600 damages Tor neglect and improper
acts ~ directors was put on record
MIR Mills Is the only individual defend
ant named in the Hidden suit. although
the railroad corporations and the Gem
tr'l Trust Company as trustee are
joined rs defendants.
Tho complaint In the Hidden case.
drawn by Roger Foster. states that
since 1902 Mr.. Mills has been a director
OF the Rock Island corporation Of H.
liuuis and has neglected his duty In
authorizing the payment ont of tho
treasury Of large sums in violation OF
the law Among the transactions re-
,rrrJd to are the ratification of the
sale by the company to Il. Il. Gable,
then chairman Of the executive commit
tee Of stock OF the New Jersey corpora
ton and bonds of the Iowa company,
having an actual value of 100000, for
100000. the sale to Rober, Mathct,
general counsel. Of stock Of the New
Jersey corporation, worth S225,OUO for
Sli0,0U0, the delivery 10y the Illinois
corporation Of $3.50. 600 OF its bonds 20
l.. +. Lorvc. then chairman az the ex-
ecutiV- committee, without cOusidera-
ton. and the drawing OF false vouchers
to conceal the real nature OF the trans
action
II il alleged that Nj. Mills author
lied the payment Of 100000 tp Il. A..
Jackson, general counsel OF the road,
without consideration.
The complaint also alleges that Mr..
Mills authorized the payment Of eN-
ces.,c salaries to many officers aud d.
reuturs and the following are among
those mentioned T. Il. Cable WHO
drew from $4,000 10 $4,000 as chair
man Of the executive committee. was
worth only $1,000 william ~ Leeds.
who drew the same salary for the same
jon At 4 different period WIS WORTH
Sl5.0UO. ~ l.. WuChell. who got
SI0,0"o a. year J- president. was worth
only Slu.0OU. q. T.. NuJkum who rec
ceiNcd $4,000 rs chairman OF 'hr cN-
ecutivo committee, should have had
$4,000; l.. T.. Lorce. As chairman Of
the executive committee got $4,000,
when he was worth only $4,000. while
Robert Mithrr general counsel re
ceiNcd $4,000 year for s"rN ices worth
$1,000.
rs to the payment of S32. 600 a year
to Daniel q. Reid az chairman Of tho
board Of directors the complaint states
that "the reasonable value Of his ser
vices was nothing, since he was a detri-
meut and not a benefit ana an eNpe-
risrc"d railroad man could have been
found To nh his position for $1,000 a
year. II is alleged that H. V. Nudge, who
got 100000 a year a. president In 1911
and 1879 and 100000 iu 1918 and 1914
was worth only $1,000 a Year
Mr. Mills is accused finally Of approx
ing the payment Of $4,000 to Robert
Matner va 1904 with the intention that
said Mathcr should use the same "a
contribute to the expenses of a political
campaign, then in force, Ia order "a
procure the good will Of the Officers of
the United States and induce them not
TO take proceedings against the direc-
tors OF the Illinois company because OF
the violation Of the statutes Of the
United States and the state OF Illinois
and other corrupt reasons
The complaint asks that Mr. Mills be
/ held liable for all improper use Of fund.-
and property which he approved and
states that the suit Is brought against
him at this time because, n delay I'D
longer, the statute Of limitations will in.
terycuC
In the suit Of Amstcr ana others tc
+ collect $500, 900 from the Rock Island
directors 1t II alleged that payment,
/ of S7,3l4, $50 and SlS5.339 by the rail
way company and the pretended pur'
chase Of such bonds by tho railroad
company were fraudulently and unlaw'
fully accomplished by the said defend
ants for the sole purpose OF assisting
the railroad company to procure th'
1 funds necessary to make possible th'
disposition OF the said Frisco stock
The complaint alleges that the ole
Rock Island company, being dominated
by holding companies, was caused
through the directors to purchase S2s,
9O4 800 OF Frisco common stock FOL
which It paid S3i.72s, 800, OF which one
half was paid by the New Jersey hold
ing company and half by mortEaging M
Frisco stock. II Is alleged that THU
same stock was sold in 1908, five year
later. for SlO,S52.6I2.
The plaintiffs say that in order 4
transfer the title Of the Frisco stock j
was necessary to satisfy the mortgage o
Sl7364,ls0 and 10 pay in cash the bond
secured by that stock The holding com
pauy lacked sufficient funds to finance
. the transaction and II is alleged tina
the S7.5OOOCO which was required 70
the deal waS taken out OF the trcasur,
of the operating company and the latte
| received no benctit.
Directors of no Rock Island system
named ia the suit were not surprised
at the Hing Of the action, as they LOOKED
for II some time and il had been wdel!
discussed. Representatives Of some o
the leading directors named refused 4
discuss the suit yesterday beyond stat
ing that the transaction which has bee
made tn basis Of the action was legd
one, Justified by the circumstances, an,
that they had nothing to fear as to tn
outcome OF the ease.