The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-06-05
TRYING TO GUST JAY GOULD
THE GERMAN BONDHOLDERS OF THE
CHICAGO e. NOhTHWEST TERN
A Great Railroad where Some Per-
sons have Made Handsome Fortunes-A
Curious and Most Interesting History.

Curious and Most Interesting History.
The Chicago and Northwestern Railroad
election takes place tomorrow In Chicago.
large number Of the prominent stockholders
from New York city are in attendance. The i'm
portanco Of tho event will appear when 1t Is
noted that the common stock OF the Northwest
ern Railroad was advanced moro than twenty
per cent in the contest for the election. When
the purchase Of shares for the control began.
about three months ago, Northwestern common
was selling at 80. 1t has since sold at 55. and
for some weeks has ruled between 80 and 81.
About one year ago Northwestern common was
selling at 10. Tho people who now hold the
large blocks in most instances bought It at low
figures. and have made handsome fortunes.
The great cry has been that tho earnings have
increased enormously on account Of the i'm
pctus given to transportation by the large crop
OF 1877. Whether the increase in tho earnings
has been sufficient to warrant an advance in the
prco Of the stock, common and preferred. OF
more than $4,000. 900 is yot to be solved.
The history OF the speculation in Chicago and
Northwestern during the past eighteen months
is n curious and interesting one. on account of
the remarkable fluctuations in price, the wealth.
position. and intrigues OF the interested parties
For several years after the panic OF 1873 the
late John +. Tracy was the main supporter Of
chicago ana NORTHWESTERN. and his brokers.
kennedy Co. gradually became loaded with
the shares. AS the stock began to get ciQued
the speculation became lighter. and ut the be-
ginning of 1877 there were few purchases eX-
ccpt 10y Kennedy X Co.. and the sellers were
mostly investors Distressing OF struggling lots.
the price being about 81 for the common and IL
WIS imrossi ble to draw in any outside buying.
The earnings OF tho road steadily Decreased.
and every year II became necessary to sell about
n million of gold bonds to keep the concern
afloat A clique was formed in Kennedy X Go. =
Office TO sustain the price. but John L. Tracy
was. after ALL tho main supporter OF the stock.
His health broke down in the latter part Oi 1876,
80 that he was unable TO attend TO business Tor
| weeks at u time.
In the early part OF 1877 II became evident
! that unless assistance WAS obtained Chicago
| and Northwestern stock would 20 To pieces. In
these straits. with Mr.. Tracy unable u attend 10
! business. Mr.. VIM. L. Scott his brother-in-law.
| came into control Of the speculation. and con-
| cluded 10 take Mr. Jay Gould into his conf
! into 10y which Mr.. Gould was 10 take 10000
shares OF Northwestern common from the pool
at 30. large block Of the preferred. and agree To
| support the price OF the stock in the Exchange.
In return for his assistance h. was to have a
representation OF the Union Pacific interests
| in the Chicago and Northwestern and the chi
cago and Rock Island boards. The agreement
WIS carried out so far as letting the Union Pa
ellie interests have representation in tho other
| two boards. Mr.. GOuldis directors were duly
elected. and the designations OF old Rock
| No sooner had this been made public. however
| than the prices OF both Northwestern and Rock
Island broke away in the most frightful man
| ner. Chicago and Northwestern common sold
| down from 80 to Is. ana Rock Island touched
e2S. Kennedy Co failed at the beginning Of
the scrape and tied up their stocks. Mr., Gould
came to their assistance and purchased largely
| o. the stock rs IL was offered in the Exchange
| Members OF the old pool say that Mr.. Gould be-
trayed them in not sustaining the price at 80
and claim that n contract In writing made
| which he violated. Whatever the merits Of the
| case were one thing Is certain. and that is that
he bought all he could get at low figures. and
that a great deal OF stock was sold by other per.
sons as their margins gave out in the heavy
decline.
Along in the summer it became clear that
large crop would be harvested. and upon this
! an upward movement was begun in the com
| mon and preferred stocks. which has not yet
eliminated. The Turco- Russian war created
a demand for our breadstuns. and everythn ma
favored an advance in prices. Speculation IL
the Northwestern stocks has become the fash
ion. and il Will probably take some time for III,
public 10 become accurately informed as ~ tn,
real merits of the properties.
The reason for the recent startling advance
from 80 to 50 in Northwestern common grew
out OF the efforts OF the Amsterdam holders o
the preferred TO GUST the jay Gould directors
Mr.. Gould is extremely unpopular in German,
on account Of his remarkable manipulation o
various securities IN which the Germail- hay'
sykes DR.. Secretary ami Albert Keep. Prcsi
dent Of the Chicago and Northwestern Hallway
lhSno Il n itp 6 g4h9e ss s Ksc pan an
sykes responded iavoraby and. with
stock. asked for proxies from American
holders. Mr.. Gould became informed of thei
movements. and went in vigorously la defen
this ,heme hy buying stock in the open mar
ket In this way ne became possessed Of some
! thing like 100000 shares of Chicago and North
western. common and preferred. whether h
mas secur'l "huugh VIII appear AT to-hurfuW
election. II Is Understood that he holds u grea
many proxies secured through the agency 81
Mrssrs. DAVIS Dillon. and Scott and that the lat
tergcntleman has been 81 l-po-ed 10 Object To- cast
ing them for a board OF direction exclusively il
Goulds interest Ii is stated that Il 100 900 ma
been charged TO construction during the pue
year In the Chicago and Northwestern Railroad
II this II true. the late dividend Of three an
ne-han per cent. upon the preferred. md tire
upon the common. may be called III question.