Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1915-08-18
road to the proper business manage
ment at an early date.
Findings Summarized

road to the proper business manage
ment al an early date.
Findings Summarized.
In reviewing the results Of the in
vestigatiou. which covered the man
agement Of the road for the period Of
years from 1901 to June, 1915. .nclts-
sive, the commission found these
things
l. That when the Moore Reid svua5-
cate obtained control Of the line ffz
stock vas selling for more than 5000
share: when the investiga CATION closed il
was selling for less than $50 share.
2. That through actual mismanaee-
ment Of the proper ties. entirely aside
from their manipulation for stock
market gambling. the Rock Island lost
more than $4,000 900 actual cash.
3. Of this $2o,000.000 more than
100000 was paid as "gratuiues or
contributions TO officers of the road.
in addition TO the exorbitantIy high sal
aries they were drawing.
/ That the capitalization, iuclud-
ing stocks and bonds. grew from about
S50.0o0,000 TO more than $500. Doe 900
,. That the syndicate obtained it's
hold through the organization of two
holding companies neither of which
heIa any assets except such as they
OBTAINED dlrect from the railway COM
paas' ana ooth 81 Whlch Died the rail-
road company to death.
b. That the gross earnings Of the
railway have increased steadily. vet
notwithstanding this the road is IN al
il-os1 Z elpleSs 7tate as the result p
aus Hlls4leha cement
" 1hat the directors OF the company
made practice OF mIsrepreseuuug
their assets 70 the stockholders
:. mat the oucerS Of the company
Iallea 70 state on me pay roll the true
amounts they received for their serv-
ices
y Ihat IT is impossible TO estimate
lne gains dcernlAg 10 the mem ers Of
lle SE haleate as q result OF thelr con
troi and manipulation OF the railroad
Decision on ReceiTershlp'
In adaluon 10 the above facts con
ceFnlng the acknowledgement OF the rail-
way company Jhe commission hoIds
tnaf IT'S present situation IN the hands
OK receiver is atTloutaole soiely %
-ile determination OF Ihe members CT
{ lne syhulGale 10 wreck lt.
On the qQeStloh OF Lhe present re-
celFership the commission found thar;
/. The syndicate put the road into
a fecelFeFsn1p 10 accom- ptisA IT'S own
ENDS
:. Inc BOARD OF directors was hcl
INFORMED OF the intention 10 ME Dill
asking a receivership.
3. The stockholders were led TO be-
lieFe lna1 suea "a ON Womb not DC
MED ana that tAe ROAD "oai3 meet lts
opuEauohs.
T. Ihal the FeeelFeTsAlE procedures
before Judge carpenter il chicago
were "holiy arranged jill a1Fdnee anu
mat the sulJ 10 appoint receivers was
not bona fde proceeding TO collect Il
debt but was instituted to carry o1t
the purposes and schemes OF the syn
olcaLe controlling the railway.
a. That Robert walker, general
counsel for the railway, who is now
counsel for the receivers, vas subserT-
lent to the syndicate and not 20 tAe m
terests of the stockholders.
The commission strongly condemns
the directors Of the road II divides
them into Two classes-those ID the
syndicate. who were manipulating IL
LOT their own purposes ana tho5e "l.o
merely sat III ana a-ioWea a4alIa 10 t'e
handled without a protest.
Likewise it condemns the officers.
1T is a forcetul commentary on the
methods by which great railway may
be manipulated JRto rece1yership,' II
says, when it is noted that the gen
aral counsel, after drawing the bill for
a receivership, sold his stock. and the
local counsel. who represented the rail-
wav company III the receivership pro
eeedings. owned no stock in the rail-
directly participating in the receiver