Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1915-03-01
NUDGE DEFENDER
RAILROADS. ACTS
PAYMENT OF BONUS MONEY
HELD REWARD FOR GOOD SER
VICES OF WORKERS.
Prssiden. Of Operating Company Says
Physical Condition Is Best In His
tory of Lines

Washington. D. c., March In
ouiry into the affairs of the Chicago.
Rock Island & Pacific Railroad com
pany and its allied corporations by the
interstate commerce commission has
ened but with no possibility that a re-
port to congress on the resolution call
ing for the investigation can be made
81 this session
Counsel for the railroad agreed to
submit by March 20 abstracts of the
evidence offered. presenting their
view of the facts brought out. Joseph
n. Folk. chief counsel for the commits
sion who has conducted the inquiry.
will present similar statements.
Henry L. Nudge, president Of the
Rock Island Operating company, the
earnings of which were said in testi-
mony to be the only value behind the
securities of the two holding com
panies organized by the Leeds-M Moore
group which acquired control of the
Rock Island in 1901. was the last wit
ness for the railroad.
His testimony dealt almost entirely
with the present physical condition of
the system. which he declared TO be
better than At any time in its history.
Nfr. Nudge professed TO have no per
soual knowledge of any Of the transac-
rions regarding the creation of the
holding companies, one of which is
now in the hands Of a receiver. They
were organized prior to his taking Of
fee as president. he said. and his work
mad been entirely with operation Of
the system
He corrOborated other railroad oftic-
iaIs vino have declared that the uu-
DERIVING cause of the present finan-
ciaI condition OF the road was not any
financial manipulation, but decrease
in freight and passenger rates. mainly
by state commission rulings in eight
states. and steady increase of wages
and other expenses Of operation
No Harm in Bonus Payments.
Questioned as to items found on the
hooks of the company, showing pay
meuts of various officers in considera-
Bile amounts in addition TO the sala-
ries they received. Mr.. Nudge said he
had no knowledge of them personally,
but believed they we're well earned.
He objected TO Characterization of
those payments as gifts" by Mr.. Folk
In many instances, he said. It had
been shown they were bonus pay
ments TO obtain the services of men
who were assets TO the company be
cause of their knowledge and ability.
That was a common practice. he said,
among the railroads, and he had him
self been offered substantial compen-
sation to leave the Rock Island go to
other employment.
Of 10 holding rom ma
MES. the witness insisted, had not
loaded the Rock Island railway with a
dollar in additional burden.
James Speyer. head of the New
York banking house of Speyer & Co.
made a voluntary statement before the
commission today of his firms deal
ings with the Rock Island system dur
ing the period of its history under in
vestigation.
The firm had never occupied the
position of fiscal agent for the rail-
road. he said, but, acting as a princi-
pal had bought and resold. between
1904 and 1912. securities of the Rock
Island Railway company itself of some
$40. 4O9 600 face value. The total profit
on these transactions for his firm, Mr.
Speyer said, was S1.43S,743. or eight
tenths of 1 per cent. Not all OF the
firms transactions in Rock Island Sc
curities had resulted IN profits, Mr..
Speyer added. saying:
Il Will not disclose our losses since
1912. for my friends VIII think I am
not good banker
Stirred by "lnsinuations."
At no time, Mr.. Speyer said, had his
firm handled any securities Of the
Rock Island holding companies organ |
lied by the Leeds-Reid group He said |
he had been prompted to appear be
fore the committee by a desire to |
know why the name Of his firm had |
been brought into the inquiry.
What bearing have these transac-
tons with Speyer & Co" he asked. |
on the object of this Investigation /
He added that "insinuating questions"
as TO the profits of bankers who mark |
eted securities for railway corpora |
tons were calculated TO misrepresent !
the position and actions OF such bank !
ers in the public mind.