The New York herald., 1922-05-26
VOID ROCK ISLANDS
MCIRCULATIONHERE
Laundress Gets Them for
Washing, She Tells Dis
trict Attorney.
PAID TO BOOTLEGGERS
Man Arrested in Boston for
Presenting Them in Pay
ment for Furs.
LINE FORECLOsED IN 1914
Iowa Company Distinct From
c., r. /. & P. Railroad
Operating in West.
LINE FORECLOsED IN 1914


presented to District Attorney Banton
yesterday two $1,000 bonds of the Chi
cago, Rock Island and Pacific Rail-
road of Iowa and asked for the money
they represented.
why, those bonds were repudiated
back in 1914" said John P. Donlon.
Mr.. Banton's secretary. I'VE lave
received several complaints from peo-
pie who have bought them
The negress accepted the explana-
ton, saying that after the very fine
gentleman" had moved away, she lad
taken the bonds to bank and been
referred to the District Attorney.
Bonds Pay for whisky.
This Is the second case OF the sort
to be reported within two days. Accord
ing to Mr.. Banton these worthless bonds
are being used In payment for liquor
| obtained from bootleggers. Mr.. Banton
says that larceny is larceny, no matter
IL any bootlegger will make COM
plant.
| In Boston two days ago, John Stew
art, who said he was from New York,
was arrested and charged with larceny
for offering five Of the same worthless
bonds in payment for come furs. He is
said to have visited the fur store several
times to make a selection. always ar
irving In an automobile.
| After Stewards arrest. the police as
sert, 1t was found that his automobile
was registered In the name of John
| Benson. whose address proved to be
| fictitious. The Boston police also say
he admitted having served terms In
! Illinois, New York and Maryland and In
the Federal penitentiary at Atlanta. He
has been known as John Peterson. Fred
erick Nugent and John Carr.
s71,OOO.ooO of Paper Out.
Scattered about the country. being
bought up now and then by unscrupulous
brokers and others, are about S71,000.-
| 900 of these bonds of the old Chicago
Rock Island and Pacific of Iowa. They
| have an actual value of nothing at all
except to those who buy them cheap and
| can get.
There is a somewhat long and in
volved history to these worthless bonds.
1t has been written several times In
financial columns but complaints from
| those who have been persuaded to buy
them still roll into the offices OF
the Chicago. Rock Island and Pacific
Railway Company. The latter. which
is distinguished by the fact that 1t Is
railway company, while the bonds
were issued by a railroad company,
has no responsibility as far as these
| securities are concerned.
According to the Central Union Trust
Company. the bonds in question were
widely held. Stories have reached this
bank of the purchase OF 1900 bonds for
! so cents and the sale for S. There have
been law suits resulting from the cash.
ing of coupons Of the bonds which were
worthless and several criminal prose
cutions have resulted from tho sale OF
| the securities by men who knew them
to be worthless But the bonds con-
tinue in circulation.
Company Foreclosed.
Originally these bonds were known as
collateral trust bonds of the Iowa Ccm-
pany and were payable November /.
2oo2. The railroad company defaulted
In the payment sof interest due In May,
1914. and a decree of foreclosure and
sale was entered in the United States
District Court October 10 1914
The court ordered that out Of the
proceeds of the sale s9s.50 should be
paid on every $1,000 bond. The pay
ment was made through the Central
Union Trust Company, and the bonds
were rubber stamped with the fact that
the payment had been made. The court
also ordered that all coupons bearing
date after May 1, 1914, should be void.
There having been some odds and
ends of assets, second payment Of
$3.50 on each $1,000 bond was ordered
by the court on January 81. 1916, and
again the bonds were presented to the
Central Union Trust Company, the
money paid and the bonds duly stamped
and returned. Again in November.
1918, the court ordered a further pay
ment. this time of only 66 Ia cents.
Bear Payment stamps.
Thus the bonds that are outstanding
bear three stamps stating that the pay
ments have been made 1t is highly i'm
probable that any further payment will
ever be made on them. They are worth
nothing but they look as II they were
securities of the present Chicago. Rock
Island and Pacific Railway Company
and thus fool some people. especially in
tho Southwest, where the Rock Island
road operates and is we'll known.
IL was ascertained at the Central
Union Trust Company. which was the
trustee for the handling of the bonds.
that there may be few outstanding
that do not bear any stamps and hence
are worth about st07 for each $1,000
A. inf a nm
holders generally have made inquiries
and learning the facts have obtained
their s107.
But none OF the bonds has been
actually Cancelled and taken up. Natu-
rally n man with n $1,000 bond which
is worthless lis willing to sell II for 90
cents. Naturally swindler who can