The daily Argus., 1875-08-28
From the ~ Y Tribune Auq 25th.
THE FORECLOSURES OF A WEST.
ERN RAILROAD,

ERIN RAILROAD,
Of German Bondholders
Against the Rockford. Rock Island
s and Sc. Lonis Railroad--State-
msnt of 4, osterberg,
FL. Osterberg, editor of the German
american Economist of Frsnkfort-on-the
Main, and the representative in this coun-
try of the German bondholders of the
Rockford. Rock Island and st. Louis rail-
road, arrived in this city few days ago
from Chicago. He will leave to-day BY
the steamer Algeria for Frankfort-on-the
Main. where he will make full report to
the German bondholders of all that has
been done by him during the past twelve
months in the foreclosure suit against that
railroad. In conversation with reporter
of the Tribune last evening, Mr.. Osterberg
made the following statement:
The suit which we brought against the
Rockford, Rock Island and st. Louis rail-
road was really the first foreclosure suit
that was ever carried out in this country
that is, in so much as the bondholders
have insisted that the former managers of
the railroad and every one else should
give way to the interests of the mortga-
gees, and have thus far succeeded in car
rying their point Notwithstanding all
kinds of Instructions that were, thrown in
anyway. in the comparatively short time
of ten months, we succeeded in obtaining a
final decree of sale. which was to have
taken place on Aug. 10,and was in hopes
., &ho la ah n
competing interest in getting possession Of
the Rockford, Rock Island and St. Louis
railroad would get up sufficient strife tC
cause the latter to sell for fair price,
On the evening before the sale was to have
taken place, however, I learned that rims
had been formed by which it was the in
tention to manipulate matters in such way
that the members of this ring should ge
possession of the road for mere song.
Therefore considered it to be to the inter
est of my clients to have the sale post
poned until Aug. 16, when I bought in th'
road for 81, $4,000 of which l have paiC
$4,000 cash, and the balance is to b
paid upon the confirmation of the sale b.
the court. This will be in the early par
of October, 1875. Immediately after
had bought the road, offers came to m
from several railroad companies to bu
the road from the bondholders, A depu
tation from the cities of Rock Island, Day
export, and Moline also came to Chicag
to invite me to attend a meeting at Day
export of some moneyed men who wishe
to have the road reconstructed and man
aged in the interest of the people livin
along the line of the road, instead Of bein
: run in the interest of one or two railroad
and coal monopoly, as had been the cas-
before. On the following day propos
ton was made to me at Davenport,
some of the leading capitalists, banker
> and manufacturers of that and other citie
named. to buy the road, the conditions {
which l do not feel inclined to make pul
r lie at present, shall lay their propos
) ton as we'll as tie others that have bee
:. submitted to me, together with plan
reorganization which l have worked OF
myself. before the German bondholde
who meet in Frankfort on the Main {
, Sept. 10. and then await their action. II
: German bondholders have no desire wha
p soever to make monopoly out of this ra
4 road, nor do they wish to show prefe
ence to either of the connecting or eros
= ing roads. Neither do they wish to ha
u the exclusive control of the road. A
o they ask is that they may realize ia
,r percentage on the money which they ha
4 already lost and that which it is now ne
:, essary for them to invest in repairs in c
u der that the road may be put in good ru
e ming condition.
,r From the very start, continued N
# Osterberg, this special scheme was one
.e the greatest frauds that was ever perp
i rated in this or any other country. 4
&c most every one who had anything to
rt with it has made money out of the affa
b. They have injured the American nal
ID abroad more than any other swindling {
40 since 1869. In 1871, when the railro
e. the road over to the bondholders, the re
or was given over to new party, who
or course, felt under no obligations to I
" bondholders. From the time the Uni
IL States court appointed receiver, on q
27, 1874, everything which they CO..
possibly do has been done by the man
ers of this clique to cry down the proper
,is | have no fears, however, of being una
h to make the property pay good divide
.e even on three times the amount at wh
lr. | bought it in, which is only $4,000 !
re mile.
VS. Mr.. Osterberg was asked how many
-. the bonds Of the road are held in Amer
,s' He replied as follows: There. are
10 bonds of $1,000 each represented b.
till New York banker, certain Mr.. Hass
,eo who is connected with the railroad ri
h;a about 200 more bonds are represented
~ law firm in Chicago; about 100 b
KS been sent to the Union Trust Compa
NJ. the trustees of the bondholders, and alb
ID: 100 more have been delivered over to l
"A. self, the owners of which have joined
W. German committee. This makes ah
se' 5000, 900 held in this country. The t
bonded debt amounts to $9,000,00O,
ne. elusive of past due interest, which is a
MI, tie over $2OOo,OOO. The gross earni
'oA of the road have been, so far, about
OF 100000 per year, and it requires only
management to bring it up to $1,000,
the within the next two years. The railrl
v.S when put in order, can make a net pl
Of 80 per cent on its gross earnings, pro
uc- ing the money does not go into the VIZ
pockets" In reply to the question al
what the bondholders will receive
have not Joined the German bondhold
dry he said: THE bonds numbered from
hat 5000 will receive about II per cent,
w.. those above 5000 about 81 per cent.
An sides those in this country there are 81
bonds held by persons in Holland
de- Switzerland, but the majority of all
bill bonds are held in Germany. After
ige bondholders have invested an additi
ion 100000 or 100000, which is all
are will be required to put the road in {
be running condition, it will net ID per
lsi- on $4,000, 900 to $4,000,000."
,a'a