The evening world., 1915-02-25
ROCK ISLAND HAD
MILLIONS IN BOGUS
ASSETS IS CHARGE
Holdings Booked at S2o,35t,-
600 Said to Have Had Ac-
tual Value of 81, ,6o2, 900.

WASHINGTON Fob. 25.-That the
Rock Island Railroad carried on its
books fictitious assets asEresating
millions was the testimony Of Freder-
lex c. sharood. special examiner for
the Interstate Commerce Commission.
In the hearing to-day by the Commits
sion Of the company's affairv.
sharood gave detailed figures on
various assets" which he said he
had examined. to show that property
listed ~ having ~. .Ssi. 900 book value
had an actual value Of 41,eo2,ooo.
On this showing. he said. the Rock
Island had overstated its surplus
S17.s<s.ooo. and that II should have
shown q dehcit as all times since 1904.
instead Of q surplus.
Among securities. he said. were
listed ~ Sssets by the company. but
which were worthless In his opinion.
were:
Trinity and Brasos Valley Railroad
stock.
Toledo. 81. Louis and western Rail-
road bonds.
Consolidated Indiana Coal Com
pany.
Chicago and Alton Railroad stock.
Nebraska Central Railroad stock.
The latter has no existence except
on paper" according TO . letter from
q. 7. Bogss. assistant secretary to
the Treasurer of the Rock Island
Company, introduced In evidence.
n ~ - -
tho Chicago. Rock Island and Pa
cific Railway Of Iowa-includsd e1.-
900 Of stock In the Chicago, Rock
Island and Pacific Railroad OF New
Jersey, a holding concern now In q
recelver's hands, and 6harood said
this stock necessarily II worthless.
Regarding the New Jersey company
he said. while on the books II has
assets OF sio6. 100000. It IL worth about
The operating company. that OF
Iowa. said Sharood. charged on only
one-quarter OF one per cent. annually
That would make the average life
Of car 400 years." intsrjectsd 10.
seph w. Folk. counsel for the Inter.
state Commerce Commission.
Questioning OF Sharood brought "a
light that c. II. vsnner. who figured
In the famous Northern Securities
case and who now has . suit agaius,
the New York Central Railroad
played an interesting part In the
Rock Islands affairs at the time d
q. Reid and w. b. Leeds were plan.
ming TO consolidate the Iowa and thu
New Jersey companies. each a. q
\ b0.00o, 900 corporation, and 70 Issue
o16, 900 In bonds through the Cen
trai Trust Company Of New jersey.
vennsr. sharood's testimony showed
had unioaded the Nebraska Contra
stock on Reid and Leeds for $50. 900 n
the price Of dropping . suit TO pre-
vent the big consolidation deal. HS
had instituted such q suit - . RocI
Island stockholder.
A receipt which vennsr had giver
Robert Mathsr, the Rock leland,
Second vice-Prssident. for the $780,
900 included the phrase. for services
rendered and to be rendered" Thi'
was In 1904.
Tho Nebraska Central stock II stll
on the Rock Islands books a. an As
| set, said Sharood.
Between 1901 and 1914. sharood tssti'
hed, the Rock Islands funded deo,
had been Increased SISe ,00o. 900. ol
which all but ei0.0o0,o 900 was In new
securities. The company received
SITS. .000, 900 Of this. discounts amount
sions TO over $1,000, 900.
The purchase OF the Consolidatct
| Indiana Coal Company, evidenc,
showed. proved improbable to tn
| extent OF 9e0e. 900. r. A. jackson. gcn
erai counsel for the road at salar!
i of %, 900, Il was shown, made tn,
deal, receiving $1,000 for 20 doing.