Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1915-08-18
ROCK ISLAND s
ASSETS WASTED
BY SPECTATORS
Rep0rt of Interstate Commerce
Commission Shows How
Prosperous Road Is Wreck
ed by Its Officials,

,.y ss.s,sa JousN.L SPECIAL tEAsso WisSl
washington. Aug. 1.-THE Inter
..,. commerce commissions report
IFS Investigation of the Rock Island
.,Hroads financial affairs made pub
a. here today. shows millions of dol
lars i'm losses i'm stock transactions,
.b,roes the railroad officials with
,oisre presentations in their reports to
stockholders. dtscloses great profits to
nromoters Of the Rock Island holding
comulnias and arraigns the syndicate
operations which began in the early
nineties
The department of justice has been
waiting DO 90 over the report The
Interstate Commerce commission
broadly suggests action Icy the legal
branch of the government 1t says
CHOSE guilty of misleading reports to
stockholders should be subject to ade-
quate penalties
Millions Are Squandered.
The aggregate losses to the Rock
Island In the Alton, Frisco and 9TH
er deals are summarized by the com-
mission as follows
Frisco deal approximately S6,5OO,-
600. Alton deal approximately So
10000 Trinity and BraOs valley rail-
way deal more than $4,5O0,000; Con-
soldated India and Derring Coal COM
panies at least $1.300,0O0 and $4,000,
400 additional of advances made t.
The coal companies cannot be collect
ca. contributions or gratuities to Of
fcers and directors about 81 900 600.
expenses of maintaining and housing
holding companies, more than $500
GOO. transaction of c II. Venner, a
aockholder $2lG000 miscelaneou.
ana unexplained expenditures, $72,-
seq. The items show am aggregate
loss to the railway company Of more
than $2O,OQ0,OOO
I'm addition thereto il Is to be noted
that prior to June 80, 1914, the rail
way company paid to financial insti'
tons in connection with the issuance
Of bonds commissions aggregating
more than Sl,60O0OO ana suffered
discounts Of more than $lT700,O00."
Take Years for Recovery.
erhe property Of the railway com
pany will be called upon for man,
years to make up the drain upon 1T
Resources resulting from transaction
outside the proper sphere in which
stockholders had "a right to suppost
their moneys were invested. This rec
ord emphasizes the need Of railwa,
directors who actually direct Their
are too many passive directors VIII,
acquiesce in what is being done with
out knowledge and without investiga
ton A director Of a railroad is
quasi public official who occupies
position Of trust A director who sub
mts blindly to the exploitation of hi
company is a party to its undoing am
he should be held responsible to tn
same extent as if he had been prin
cipa instead Of an accessory befor
the fact The greater his prominenc
the greater his responsibility an
lhe greater his derelictiOn.
Responsibility of Directors.
obviously a man Of large affair
could not attend to all the details j
intricate transactions, but it is incon
ceVable that a director Of Ordinar
business prudence and sagacity woul
sanction large expenditures withou
inquiry as to the purposes of sue
disbursements So long as this systei
exists. however il suggests the need {
law 10 charge such directors wit
INDIVIDUAL responsibility for the diss
pauon of corporate funds.
The Clayton antitrust act, whic
becomes effective October is. 1871
Will make it unlawful for any pei
son at the same time to be a directc
IN TWO or more competing corpora
IONS amy one Of which has a capita
surplus or undivided profits aggrega
ing more than $1,OOO,O00 but con
mon carriers are expressly eXempte
from nus application, II should
JUST as ID grave an offense for an off
clal OF o railway to be faithless to h
uusl Tor financial gain as il is for a
'N'ted official of the government
0e"ay his trust for money reward.
Limitation I'm Stock Issues.
by this case the need Of SON
mutations on the issuance of stool
ana bonds by common carrier
~nether through holding companie
ue'lees or otherwise, is again demon
slrated
me committees Investigation
"e ROCK island began in April, 1911
% 'he commissions own motion, bl
,Ono"ed a request from the hou'
eou'i'l'tee ON interstate commerc
cured by resolutions introduced
congress.
after pointing to the fact that
'SO- the Rock Island was thriving, /
PROSPECTS promising, its stock sellir
,so ,ne world markets at more tha
te a share, the report says that
''4 The shares had fallen to $50 az