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Show ROCK ISLAND I STORYJS TOLD I Director Boggs Tell of Pur- jf chase and Sale of Frisco I Lines by R. I. Company. f' ROAD LOSES MILLIONS Folk Asks Pointed Questions Regarding Downfall of Great Railroad System. Washington, Oct 17 Some details concerning the acquisition and subse- f qumt sale of the 'Frisco lines at a loss of millions were developed to- daj when1 the investigation into the j financial operations of the Chicago. Rock Island & Pacific railway was resumed before the interstate com raerce commission George G McMurtry of New York, j a director of the Rock Island Operating Operat-ing company and of the New Jerse j Holding company of the Roc-k Island. j gave testimony tending to show that j the board of directors practically was dominated by Daniel G Reld The witness said he knew personally very j lltth concerning the financial operations opera-tions of the several companies. Upon cross examination, Mr Me Murtry said that, as usual in such j company operations, he relied on the reports of the executive committee whlcb had direct charge of them. ( George T. Boggs of New York, a director of the Rock Island Operating 1 company and an official in various capacities of that company, for many I years, gMng his version of the pur- j Chasi and subsequent sale by the Rock Island of the Frisco Island to dispose of the 'Frisco stock to B. F. Yoakum and his associates, even at I the loss which the Rock Island was obliged to take in that transaction. "The time and condition had j changed,'' said the witness, "and It ' was necessary for us to do the be6t we could in the circumstances " Folk Ask Pointed Question. "Yfiu believe; then," suggested Solicitor So-licitor Folk, "that the board of di-reotors di-reotors of a railroad has a right to do what It pleases with the com-pajvy'8 com-pajvy'8 money, without respect to the general public'" ' I do not quite understand the question," said Mr. Boggs "The board of directors of this property, for Instance, does what it deems to i be proper In any circumstances. As to the bond transaction of $17,500.-000 $17,500.-000 at the time the "Frisco stock was sold to Mr Yoakum, It was necessary that those bonds should be redeemed, before the stock could be passed to the new ownership " M r Roggs said as a director ho 1 approved of that transaction and of the loan $7,500,000, made through tho First National Bank of New York, because he believed It would effect a saving In the Rock Island railway. "As a director of the Rock Island railway did you cast your votes ac- I cording to instructions7" asked Mr. Folk. I; "No T acted on my best Judgment." Judg-ment." Road a Heavy Loser. The loss to the Rock Island rail- t waj through Its purchase and subsequent subse-quent sale of the tock of the 'Frisco lines was the difference between $01 60 and $37.50 a share. aceordioK to B. F Yoakum of New York, who conducted the negotiations for the 'Frisco stockholders The total amount of actual loss Mr Yoakum thought, was about $7,500,000. j, Mr Yoakum became a member or the various Rock Island boards when the Frisco stock was acquired Ho Bald that while the control of thn 'Frisco was in the Rock Island, com-petition com-petition between the two lines did not "What was the reason for the re-purchase re-purchase of the 'Frisco by you and i your associates"'' asked Mr. Folk i "Weil I believod in the 'Frisco and believe in It yet 1 dealt concom- (Contlnued on Fage Seven.) |