The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-05-24
PURCHASE OF THE MON0N
w. III. M'DoEI. WILL CONTINUE As
EXECUTIVE HEAD OF THE ROAD.
Panhandle Earnings for ApriI-Possi-
biIity that Use of Mileage Books
May Become General.

The chief reason for the purchase of the
Monon by the Southern and the Louisville
& Nashville companies was to obtain en-
trance into Chicago, something which has
been looked for several months. 1t is I'M
so much to bring the Monon to the front.
will remain as its executive head and that
the road will be operated in such a way
as to confer as nearly as possible equal adj
vantages to both interests that control the
road jointly. In the spring of 1899 con-
trolling interest in the company was ac-
quired by ]. P. Morgan & Co. 1t was an
nounced then that the property would be
operated independently. but in harmony
with other lines controlled by the same
interests
1t was generally understood. however.
that the company would eventually be alb
sorbed by the Southern. thus giving that
system a direct north-and-south line.
Louisville G. Nashville last year opened
negotiations with the controlling interests
in the Chicago & Eastern Illinois for the
purchase of that property. the manage
ment feeling it was necessary to the main
tenance of their position in the Southern
territory TO secure an entrance into Chi
cago should the Southern take over the
Monon with that object in view.
The recent purchase in the open market
Of the controlling interest in Louisville &
Nashville by John w. Gates and his asso-
ciates, and the immediate turning over Of
this control to J. P. Morgan & Co., fur
nished an easy way out of the difficulty.
The New York Evening Post had the fol-
lowing last night: Developments in Wall
street to-day brought out the fact that the
Monon Railway deal, as announced by j.
p. Morgan & Co, probably cannot be put
through unless the firm exercises an option
TO buy, at sl5O share about 1900 shares
of Louisville & Nashville stock. This stock
is held under option. Exercise of that OPP
ton would call for payment of 100000 900. If
the option is not exercised, however, the
Gates and Hawley syndicate, which sold
part of their stock purchases to Morgan &
Co., can reclaim the whole of their hold
ings on repayment of the advances and in
terest,. etc. That would mean loss of con-
troll of the Louisville & Nashville Railway
to ]. p. Morgan & Co. 1t is to be assumed
that the loss of control will not take place.
To prevent it, however, the firm will have
been called upon to pay over S43. 900 for
the Louisville & Nashville Railway"
The Evening Post then gives the follow
ing statement of the terms on which Louis
vile & Nashville shares were deposited
with ]. p. Morgan & Co. John w. Gates
turned over to j. p. Morgan & Co. 2O6 900
shares of stock for himself and a dozen
associates Edwin r. Hawley turned over
to ]. p. Morgan & Co. 100000 shares of
Louisville & Nashville and Mr.. Gates and
Mr.. Hawley each took separate contracts
of the same tenor from j. p. Morgan & Co.,
who advanced s115 per share on this stock
and later purchased one-third Of each. or
10000 shares, at sl3e per share, and took
an option on the balance at $50 per share.
In the event of Mr.. Morgan'S failure to ex-
ercise his option the depositors may re-
ceive back their stock, together with the
dividends collected thereon, upon payment
of the money advanced and per cent. in
terest thereon, the return to embrace the
entire 100000 shares
A member of the firm Of j. p. Morgan &
Co, New York, gave out last night an en-
phatic denial of statements contained In
an article in the New York Evening Post
concerning the Monon deal. He said: 1.-The
story is absurd for several reasons. 1t
should be remembered that we did not buy
the Monon recently, as has been reported.
Control of that stock is still in the open
market, and If it Is acquired under the
terms offered by us it will go over jointly
to Southern and Louisville & Nashville.
The story is also absurd for the reason
that the Louisville & Nashville control
rests absolutely with our firm. This is
positive and is not contingent upon the ex-
ner would not give the details of the con-
troll purchase of Louisville & Nashville
stock. The street." for the most part,
credits the report that as high as $50 has
been or will be paid for considerable
portion of the stock acquired during the
late squeeze" by the Gates and Hawley
interests.