The sun., 1878-06-13
WALL STREET SURPRISED.
Some Remark able Manipuiations OF Rock
Island stock.

tsinnu Stocks
Little moro than one year ago Chicago and
Rock Island stock sold at S2,s Last week 1t
touched 1l91i. ana large transactions wore made
from III to 1l9. Within sixty days there has
been an advance OF about twelve per cent Wall
street has been in state OF ferment as one rea-
son after another for the sudden rise was
brought to light.
Rock Island has been for years more OF
speculative than an investment stock. In spite OF
the fact that Mt one time IL paid ten per cent.
dividends. which. in 1869. were reduced to eight
per cent. II has been controlled largely by Wall
street specuators who have improved every
opportunity to make profitable operations in
the New York Stock Exchange. and in building
new lines Of road to the detriment Of the corpo-
ration. Watering OF the stock has been rcsOred
to- and the most outrageous stories have been
set anoat TO induce buying. under cover Of
which inside operators could sell stock at high
prices. Not only this. but the cques in control
have at times worked shareholders out Of their
holdings by the dissemination of rumors OF inn
pending disaster. Ten years ago the capital
stock was tl4.000,000. To-day it is s2j 600 600.
including $1,000 900 not yet issued. The bond
ed debt has been increased by guarantees and
otherwise more than ss.OOO.0O0.
The larger part Of this work was due 10 the
manipulation OF the late John +. Tracy and his
| friends. The sock Iobhing. at present is in
! the hands OF Successors who seem competent 10
wear the deceased operators mantle. The in
| tcrcst Of Wall street is confined mainly 10 the
| occurrences of tho past eighteen months. At
the beginning Of this period Mr. Tracy became
| involved by reason of his immense holdings Of
| Chicago and Northwestern stock. for which lie
could find no market. The Northwestern and
Rock Island were run under his management
almost n one corporation and 1t was only nat
ural that he should manage TO use some Of the
| funds Of the latter company 10 carry the stock
most Il nleult TO take care Of with his brokers.
| This delicate financial operation was conducted
under cover 81 well-known broker who has
been absent in Europe for some months past.
| II Is also SAID that certain funds OF the North
western road were imperlled FOR a season. Mr..
| Tracy. in failing health was unable to stem the
| downward tide in stock speculation even with
the funds u his Western roads to back him. A
compromise was determined upon by his
brother-in-aw. VIM l.. Scott and the situation
was made known to Jay Gould. and his assist
ance requested. Mr. Gould succeeded in hav-
| ing representation OF his directors elected
! into the Rock Island board. Immediately after
| this the price went down from above par to 50
| At this point Mr.. Gould stcmmcd the decline by
! heavy purchases Of stock and. together with
other capitalists. put up the price.
! In few months Il was quoted above par. and
! huctuated between that point and l05 until it
became necessary 10 mako arrangements for
the recent election. pool was then formed TO
buy NJ all the stock in the market. and as II ad-
vnnced quietly point after point large number
| ot holders imp, we'd the opportunity to realize.
II WAS not until the price had passed no that
the street became aware that anything moro
than an ordinary movement was in progress.
No reasons were assigned for the advance 10y
the prominent buyers until tho afternoon that
the Wall street magnatos left for Chicago 20
attend the election of a week ago Then il wns
hintcd that the stock in the treasury. 10000
shares. was 10 be- cancelled and q large scrip
dividend made Late in the afternoon the price
| Jumped up. on a few transactions from ll2
TO llj and Wall street was agog at the new SEN
satiun.
The largo stockholders arrived in Chicago
and orders TO buy from that city on Monday. a
week ago. sent up the quotations in few min
utes to llG. Tho reason for this advance was
contained in the following telegram from Chi.
cago on June 8:
A. the mccups Of me R2ck Island e'reC'qrs re.oia
cancel The geruheams represeniin. to q go shares u
appeared in their reports an asset
Spectators who thought the resources Of the
Rock Island clique were exhausted 10y the above
action were disappointed for at the election
held two days aiterward the following resolu.
tions were adopted. and on the following morn
ing the stock sold at 49,:
Wl,r>u By economical management this company ha.
M 90 several millions OF dollar. ami whereas, lart
ins lines Vi railway which now form part OF the iail
road system o ms company while they Sre owned by
separate corporation having separate capital stock
winch stock /. now under the control of ths compan
and whereas, II j. the Judgment The s,o kolcrs tha
llt tlIltt Nliu lAr lt invested snuuld ht hiGf
uJn.1 To M % SSa M 'ISSH R6r q ~ cSIapy he9
sructcd io make some lawful arrangement for such ai
connecting lines will enuie the tuckhollers of thu
company 10 receive such dividends may DC appcab,
thereto
A few words in explanation Of the position o
the company will show whether these resolu
tons were passed with the intention Of dividing
UP real property belonging 20 the stockhold
ers, or were adopted with a view Of creating
market 10 unload on. So far rs the liabilities OF
the late John +. Tracy are concerned, 1t is un'
derstood that both the Rock Island and North
western Companies have been paid up 10y Wm
l.. Scott since the great rise in the securities
The treasures Of the railroads are. therefore
happily uninIured by Mr.. Tracy's stock opera
tions. The resolutions speak of "A surplus o.
several millions Of dollars invested in connect
ing lines. II Is proposed 10 divide this. Tn,
surplus referred to is undoubtedly represented
by the sums used in building the Chicago ant
Southwestern Railway. line running from
Washington, Iowa. TO Leayenworth. Kan,
distance Of 800 miles The Rock Island guar
anteed the interest. seven per cent, upoI
S5.O00.0O0 OF bonds and have advanced over
si,OOO.OO0 TO complete and equip the line anC
pay interest upon its debt. The rond runs be.
hindhand many thousand dollars every year
scarcely paying operating expenses. The Rock
Island is compelled to pay the annual interest