Word: mops
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Dates: during 1930-1939
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...profit inured to the Vans, for the price was the same in each transaction- cost plus interest. But the Vans had paid the packers a boomtime price and values had melted considerably by the time MOP got the properties. The sale was subject to ICC approval, yet some $16,000,000 worth of the contracts were so drawn that the seller could not lose. If the ICC denied MOP permission to make the acquisition, that railroad had to make good any loss suffered by the seller, Terminal Shares, in disposing of the properties elsewhere...
Summoned by Senator Wheeler last week was RF Chairman Jesse Jones to give his views on the Terminal contract. Mr. Jones, it seemed, had lent MOP $17,000,000 before he had any inkling that the railroad was involved in commitments which were draining off $1,600,000 in much-needed cash annually. Neither to RFC nor to ICC, let alone its own stockholders, had the railroad disclosed the existence of the contracts. Belatedly Mr. Jones laid the facts before the U. S. Attorney General for possible fraud prosecution, but by then action was outlawed by a statute of limitation...
Another surprise witness last week was Joseph B. Eastman, now back as an active ICCommissioner after a turn as Railroad Coordinator. Mr. Eastman used the intricate chain of terminal transactions to make the point that public regulation was defeated in that the ICC could, if it saw fit, forbid MOP to buy the properties, but it could not save MOP from loss...
Also made by Commissioner Eastman was a grave, if well-considered, charge. By the time debt-ridden MOP flopped into the courts in 1933, it had paid $3,200,000 on account for the terminal properties. On the books this was first lumped in a peculiar railroad account called "unauthorized work." Later it was carried as a "special deposit," a current asset. The funds were indeed deposited in Guaranty Trust Co. but for the benefit of Terminal Shares, not MOP. Last week the railroad's officials tried to explain that they never intended to convey the impression that...
Before adjourning the hearings until after the turn of the year, Senator Wheeler summoned Morgan Partner George Whitney to explain a loan made to MOP by the big banking house at No. 23 Wall Street. At the time RFC was being organized, MOP needed $1,500,000 to tide it over an interest date, and the House of Morgan, already a large MOP creditor, furnished the money on condition that it would be repaid promptly from the road's RFC borrowings...