The daily Argus. (Rock Island, Ill.) 1873-1877, 1874-10-06

The Rockford, Rock Island e. st. Louis Road,
The Rockford, Rock island & St. Louis
Railroad, commencing at Sterling, in this
State, and ending at st. Louis, has been
in trouble since its inception. 1t was COM
pleted in 1869, and was found at that time
tohave upon its hand sa bonded debt of $9,-
900, 900 while the property was worth about
l43,000,000. This eXorbitant indebted
ness was brought about, the boudholders
now claim. by the speculations of the par
ties experimenting its construction aud
equipment.
The first twenty three months of its
management its earnings over and above
running expenses were about $4,000
About this time. July, 1871, the present
management obtained possession by pur-
chase of majority of stock, and r. r. Ca
bic, of Rock Island, was elected President.
For the subsequent twenty three months
the net earnings, after paying running ex-
penses and rentals, were nearly 100000.
Of this sum over $3S0,O00 was paid as in
terest on the bonded debt. The road, al
though apparently prosperous, and being
in such sha under its new management
as to inspire public confidence, was by no
means over its trouble. In 1872 the man
agement of the road made
| A PROPOSITION TO THE CREDITORS.
for the reduction of the interest, with a
view to advancing the condition of the
company. Bond d-holders, representing $S,-
100000 accepted the proposition, and
agreed to reduce the percentage of interest
one half, and take preferred stock for one
half their bonds In February and August,
1873, the interest was promptly met, but
in 1874, owing to untriendlv Legislation
and the panic, the earnings fell OFT to such
an extent that the February interest was
not paid In June last,
MR.. osTERBERG,
formerly of New York, but latterly OF
Frankfort, Germany claiming, through u
committee to represent bond holders to the
amount of $1,000 600. caused a suit to be
instituted in the United States District
Court in this city, Judge Blodgett presi-
ding, to foreclose the trust deeds made to
the Union Trust Company Of New York,
to secure the bonds The attorney for the
company demurred to the bill on the
ground that it was permaturely filed, and
on the Goth of July the court, ,J Judges Davis
and Drummond concurrng, sustained the
dumurrer and dismissed the bill On the
22d of July Mr. NickersOn, President of
| the First National Bank Of this city, holding
bonds whose owners had not consented to the
contract of 1872 reducing the interest, filed
bill in the circuit court Of Henry county,
Judge Peasants presiding,
TO FoRECLosE THE SAME TRUST DEEDS,
and asking that receiver be appointed
during the pendency of the suit. The
court sustained the bill, aud appointed Il.
r. Gable and Judge Lynde, of Rock Isl
| and. receivers, who immediately took pos
session of the property, and who since that
time have conducted the business Of the
company under the direction of the court.
| On the oath of July the attorney for Mr..
! Osterberg, who had notice Of the suit pen
ding in Henry county, obtained an order
/ from the United States circuit court 10 re-
instate his case, with permission TO amend
his bill and file supplemental one. On
the 18th of September the amendment aud
supplement was fled, and notice was given
that
AN APPLICATION FOR A NEW RECEIVER
would be made to the Uuited States Court
to-day.
The parties interested 10 the case, sus-
tanning the action OF the Henry county
court, its Receivers, and the present man
agement Of the road, and those asking for
new Receivers, and opposing the manage
ment, were quartered at the Grand Pacific
! yesterday, and we're priming themselves
for the contest to-day before Judge Blod-
gett
1t appears that Mr. Osterberg Is sustain
ed in his application for a new Receiver
By Mr Body, of New York, ex-treasurer
Of the road, against whom, according to
affidavit Of Mr.. Cable, a suit Is now pend
ing in New York to recover S275,O0O,
which. j, is alleged, he took illegally from
the company while in its employ. He is
also sustained by German bODdholders
representing about s2,5OO,OO. On the
other hand,
4 THE PRESENT RECEIVERS
are sustained by bondholders in this coun-