The Canon City record with which is consolidated the Canon City cannon., 1920-12-23
High Finance" s
In Sale OF
aal..a. -4 Rio Grande

aas.aa-sa - kIO UranQe
NEW YORK, Dec, 21-within
few days it will be known that pro
tective committee which will repre-
sent the stockholders of the Denver &
Rio Grande Railroad Company has
been organized and has made choice
of one of the leading citizens of New
York state widely known in public life
and as a business leader as its chair
man. This committee undoubtedly
will supplement the action recently
begun which is now pending in the
United States courts. If that action
is carried through to trial and verdict
| then there will be established or on
/ the other hand disapproved charges
of collusion in, the negotiations which
have recently eliminated in the secur-
ing of the control of the Denver &
| Rio Grande Railroad Company by the
| Western Pacific. .ar.r 70 Ii
Furthermore, if the testimony which
1t is expected to secure becomes evi-
dence in the courts then there will be
revealed a story of modern railroad
high financing involving the names. of
some very prominent men for the like
of which it would be necessary to 90
back to the earlier days of railroad
diplomacies. If the statements are
substantiated that are now made then
[ the trial will be one of the most SEN
| sational of all the trials involving
railroad manipulation which have
been held in the United States.
have brought the action in the United
States courts, and it is also alleged by
many of the stockholders of the D. G
r. G., that colusion was practiced and
that too, of kind which, if the ale
I cations are sustained, will Justify
such opinion by the court as will re-
establish the financial strength and
credit standing of the D.. & R. G..
1t is to be alleged and testimony
will be taken to support the allega-
tion, that the Western Pacific Rail
road Company had at one time ex-
hausted it's credit and was without
further financial resources. 1t stood
however, in need of fresh capital The
allegation will be also made that the
controlling Interests in the Western
Pacific were for the most part the
controlling power Of the ID. & r. G..
although each of these railroad com
panies was independent, 1t is also
alleged that the Western Pacific OBJ
tained from the d, & R. G. guaran-
/ tee for the payment of principal and
interest of s30,000,00O in bonds, which
the Western Pacific issued, This
guarantee was sufficient to make the
/ bonds marketable and the Western
+ Pacific was in this way reinforced by
additional capital to the amount of
! 100000 600
The claim that collusion made a
Transaction of this kind possible is
I apparently 70 be based upon test
money tending TO show that the West
ern Pacific interests, which to a con
siderable extent, were Identical with
the d. & r. G., made a bargain on
either side being the same Further
more it was the understanding that
trust institution which 1t is claimed
was friendly with the Western Pacific,
| was to me named as trustee of the
| bonds.
The time came when the d. & r. G.
| found itself unable TO pay the interest
and presumably the principal which
were represented by these bonds
| Therefore suit was brought against
lteh d. &. r. c., and a recent decision
of the courts authorized the purchase
OF the d. &, r. G. for comparatively
small amount of money $50
In this way the stockholders Of the
ID. G. r. G.. will lose their stockhold-
ings. Therefore suit has been brought
in the United States courts the bas s
of which is claim that the whole
transaction was collusive. The stoc..
holders protective committee the or
ganization OF which will be announced
in few days, also will claim that If
the judgment stands they will lose
A their stock unjustly because the
transaction between the Western Pa
cific and Rio Grande was based upon
I collusion.
The interests involved are so large,
the possibility that this code may lead
to change in the method of railroad
financing and the prominence of some
of the men who il is claimed took
part in these alleged collusiye trans
actions. suggests that In all probabil-
ity the proceedings will not be allowed
to go very far, but instead, compro-
mise out OF court be made whereby
: the ID. & II. G. will be saved and the
interests of the stockholders well pro.
tod .