The Washington times., 1915-08-18


finance" the swapping OF stocks that
mounted into millions. the pulling down
influences Of those modern financial in
stitutions known as holding COM
panies." and "the methods by which a
great railway may be manipulated into
receivership," IL told today in a re-
port Of the Interstate Commerce Com
mission on the result Of its investiga-
tions Of the affairs OF the Chicago.
Rock Island and Pacific Railway Com
pany.
The commissions report Is an Vn-
usual document 1t Is an official
%Frenzied Finance" as startling in
some of It's disclosures as Thomas w.
Lawson's expose.
Need of Limitations.
The moral Of the tale of stock ma
! nipulation narrated by the commission
is found In the opening paragraphs OF
Its report. Describing the condition Of
the Rock Island under the Reid-Moore-
| Leeds rule. the commission says that In
1902 the road was thriving, Its pros
poets were promising. and its stock SELL
ing in the markets Of the world at
more than 500 share. In 1914 the
shares had fallen to $40. and the road
Is now In receivers hands,
by this case" concludes the COM
mans cement which brought about the
change, "the need Of some limitations
on the issuance Of stocks and bonds
! by common carriers. whether directly
or through holding company devices or
| otherwise, is again demonstrated"
The ordinary stockholder. according
to the commissions review. knew lit
! tie or nothing Of what was going Oh
ana the board OF directors was In con-
troll Of the syndicate.
Some Startling Findings.
Among the startling findings OF the
commission Is that showing approx
mately 81. 900, 900 to have been distrib.
uted as gratuities and bonuses to
Ihish-paid officials. Donations rang
ing from $4,000 to $4,000. in stocks
| or cash. are declared to have been
given officials, of high and low degree.
Meanwhile. some OF these officials
had been drawing salaries as great or
nearly as that of the President OF the
United States
The commission mentions a number
| or DenenC1aTleS OF the oys-
tenn Among them were:
Upon the retirement OF r. A. Jack
son as general solicitor. he was given
81 90 900 in cash.
&c. H. Warren. vice president. was
given by the railway company $4,000
| in par value Of the common and $l05.-
600 in par value Of the preferred stock
OF the New Jersey company and $780,
900 in cash. There was no board
authori rization for the latter expendi-
ture, the item being represented in
the records Of the railway company
merely by voucher signed by D. g..
Reid.
| Other Gratuities.
"R. r. Cable. a member Of the execu-
Tive committee, received from the rail-
way company $4,000 in bonds of the
Iowa company. then worth s24.5oo. for
Ibis services In the acquisition OF the
Burlington. Cedar Rapids and North =
ern Railway Company. and he was
paid by the latter company $4,000 in
the same transaction. Mr.. Cable also
Ireceived another contribution. which
will be referred to later.
Robert Mather. vice president. was
given $500 in cash.
When the capital stock Of the rail
way company was increased to s15.-
600, 900. shares OF the par value OF
$ss0.500 were place In the name OF
l the president, to be Thereafter dis
tributed in accordance with the fol.
lowing resolution OF the executive
Il committee passed at a meeting held
in New York July !. 1902:
"Resolved. That such portion as the
i presiden may determine Of the shares
Of the increased capital stock OF the
company not required for the purpose
Of the foregoing resolutions shall be
disposed Of at par by the presiden,
for the benefit Of such officers of tho
company as the president shall elect
and determine
Paid Fancy Salaries.
This indictment Of the commission
followed an extended resume OF the
domination OF the Rock Island dire =
tcrate by the Reid- -Moore-Ieeds syndi-
cate. which held practically full sway
without inquiry or investigation by
other so-called directors.
Among the derelictions charged tc
the syndicate management Of the Rock
| Island by the commission are the pay.
ing of fancy salaries to officers. the
payment Of unexplained bonuses tt
| favorite officials, campaign contribu'
tions," unaccounted for miscellaneous
expenses, the large upkeep Of holdins
companies. and the manipulation o1