Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1902-07-29


upon the success that has attended
his efforts in his chosen field.
ingly similar to those of 1880 which
ended in the Grant & Ward panic of
| 1884. The Rock Island is brought in
to especial prominence in this con-
nection in view of the fact that at
that time it was being manipulated
much as at present. The capital
stock was doubled by declaring
dividend of 100 per cent and now the
same process is about to be used to
treble the present capitalization. As
before, the Rock Island was one of
| the factors in producing the panic,
the significance of the action now
proposed is especially apparent.
Proposed Reorganization.
The proposed reorganization of the
finances of the Rock Island makes the
history of that property of particular
interest. 1t is one of the oldest of
the granger" roads, having been in
corporated in 1851. 1t acquired its
present title in 1866. The system
was greatly expanded by consolida-
tons in 1850.
From 1850 until 1900 the company
pursued a conservative policy, keep
ing down the bonded debt and ex-
panding slowly in Kansas and Okla
homa. The chief enlargement of the
system was the extension into Texas,
which was carried on under the name
of the Chicago, Rock Island d Texas
company. t, s-.'
In 1901 control was acquired by w.
II. and j. II. Moore and their friends.
Reed and Leeds. Since that time
the stock has provided for the pur-
chase of considerable new property
and for the material enlargement of
obligations of the company.
In the last six months the Rock Island
has withdrawn from the trustees of
the general mortgage bonds, under
the terms of the mortgage, $4,OOO.O 900
of its gold As, and the bonds have
been sold. The proceeds are report
ed to have been used for construction.
equipment and improvement. For
more than sixteen years the Rock Is
land has held in it's treasury 100000
of its old per cent bonds of 1917.
These bonds also have been sold.
The Rock Island has also issued
about $24,OO0.OO0 of per cent bonds
for the purchase of the Choctaw, Ok
lahoma d Gulf property. This
company had $9,s27 800 of common
stock and $6,OO0,000 of preferred of
the par value of $50 per share. The
road paid for this stock $50 per share
for the common and 500 "a share for
the preferred, or 100 per cent for the
former and 120 per cent for the lat
ter, requiring the issue thus far of
$23, $40, 900 of collateral trust gold As.
The Rock Island has also arranged
to increase its capital stock from
$50 ,0O0, 900 to $4,000, 900. a part of the
stock being used in exchange for the
stocks of Burlington, Cedar Rapids
& Northern and the stock of Rock
Island q Peoria, also for the bonds
of the st. Louis, Kansas City &
Colorado company, with remainder
for other purposes. About $13 ,oO0,-
600 of the new stock has been issued.
From this it appears that within
six months the Rock Island has in
creased its outstanding obligations
in stocks and bonds about $4,000, 900
and its authorized obligations about
S51 100000. The company has receiv-
ed what the management has re-
garded as good value for what has
been given. The main question is in
regard to the wisdom of the purchase
of the Oklahoma property. The
price paid has been considered high
in view of the fact that Oklahoma
paid in 1901 ) per cent on the pre-
ferred stock and only AZ per cent
-. ~. ,,,,,u,pu II has maid on the
common per cent for the first half
of this wear. The surplus after
charges for the year ended October
1901. was S1,417,625, or about IL per
cent on the common stock. This was,
however, about double the amount
earned on the common in the previous
year.
The earnings of the Rock Island for
the wear ended March 81. 1902, were
equal to about 10 per cent on $780,
OOo. 600 of stock, or about 9js per cent
ON the S75,OOO,OOO authorized.