Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-07-12
ROCK ISLAND.
The Wiles of Wall Street.
Constitutional Prohibition OF
Railroad Consolidation,

ha1lrOau consultation,
An Important Feature OF IIIiIlOIs
Law.
CHICAGO, July 10.-The Tribune of
this morning says all sorts of rumors are
circulated IN regard to the Rock Isl and
road. The Associated Press dispstc hes
Saturday evening, from New York, con-
tanned rumors of an increased issue Of
stock, and also q consolidation with [ he
Southwestern Railroad Company. Yes
terday's dispatches were received here
from Brooklyn, New York, saying that
notice had been given on the New York
Exchange by the Rock Island company
of a proposed increase of $4,000, 900 IF
stock. Later dispatches by the Associa-
ted press failed to confirm any such re-
ports, and even if they said they were so
1t would be apparent to those conversant
with the constitution and Jaws of Illinois
that such report, orsuch action, admitting
the possibilities Gifts having tbeen taken,
are humbugs got up in Wall street to
affect the price of Rock Island stock.
1t is the opinion of the best legal talent
in this city, that under the Constitution
of this State, no railroad corporation of
this State can consolidate with any other
corporation, nor increase its own stock,
until the Legislature shall pass some
general law authorizing such acts, and
prescribing the method of procedure.
All increase of stock and all cOnsolida-
tons are positively prohibited by the
Constitution, except under these condi-
tions; and as there is no such law, either
in existence or proposed, authorizing
consultations or increased issues of
stock, it is spparentthat any such increase
of stock, or any such cons OlidauOn with
any other corporation, as is rumOred
about Rock Island, would be fictitious,
and the Constitution provides that all
stock dividends, and other fictitious
increase of stock, shall be void.
The Chicago and Southwestern Rail-
road, which is the one that Tumor says
is to be consolidated with the Rock Island
Railroad, extends from Washington,
Iowa, 257 miles west of Chicago to LeaV-
enwCrth, Kansas, distance of 250miles.
This road will make direct line of 507
miles from Chicago to Leavenworth, the
distance being about the same also by this
new line to both Kansas City and st. Joe.
This company now have about 200 miles
of their road done and in operation. The
gap of about so miles in Dsviess, Grundy
and Sullivan counties, in Missouri, viii
be finished in August, and in view of the
fact that this company will be a shorter
line than any present one from Chicago
to three of the most important cities on
the Missouri river, there is reason to be-
lieYe that it will be one of the most i'm
portant and profitable roads in the West.
As shown above, the constitution of
this State prohibits consolidation, but
this road is, in fact, continuation of
the Rock Island COmpany's system of
roads. The Rock Island Company have
guaranteed five millions of the South
western Company's bonds, and the latter
road is entirely under the control of the
Rock Island Company, and will probably
be leased 10 it at rate which will make
it the most important feeder the Rock
Island Company has.
The real secret of al these rumOrs
probably is, that Mr.. Tracy and his
friends are covering shorts they put out
a day or two before WoodWard's failure,
knowing as they did then, that they
could cause an explosion and depress the
stock temporarily below its real value, by
allowing the rumors to go uncontradicted
and by Countenancing false view of the
real value of the South Western Railroad
of the Rock Island and the system.