Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-07-26
AILROAD RUMORS
Controlling Interest in the L.
and N. Road Secured?
ATLANTIC COAST LINE
THE COMPANY SAID TO HAVE
OBTAINED 1T.
Phenomenal Rise in Rock Island
Shares Have Given Immense Pro-
fits to Several Brokers.

fits to Several Brokers.
Has the Atlantic Coast Line Railroad
Company secured the controlling interest in
the Louisville and Nashville road is the
question which is being speculated on IN
the gossip of Wall street. and the men who
deal in the securities of Wall street in
other cities at the present time The big
advance in the price of the common stock
of the Coast Line company. II having risen
from $l25 share to sl69 within the past
few months, demands explanation, and this
explanation is generally accepted that J.
Pierpont Morgan has made this combina-
ton since the control Of the Louisville aud
Nashville was turned over to him few
weeks ago by John w. Gates
Efforts have been made in Baltimore to
get expression of views from the officials
of the Coast Line road. but both Mr.. Henry
Walters and Mr.. Michael Jenkins of that
road are out Of the city. Mr. Walters is
thought to be in New York and Mr. Jen-
kins is summering with his family in the
White mountains
That such a combination is a natural one
is freely conceded by tiuanciers Of this city.
The two roads do not parallel anywhere,
and have physical connection a. Augusta,
Ga, through the Georgia railroad, which
runs from Atlanta to Augusta and is leased
jointly by the Louisville and Nashville and
the coast lire roads.
Would Eliminate Hostility.
This deal. it is thought. would eliminate
the hostility of the state officials Of Tennos-
see and Kentucky against southern Sc
curities company, organized for the purpose
of doing away with all competing clements
between the Southern railway and the l..
and n. Following the report of the forma-
tion cf such a merger. Governor Mcmillan
of Tennessee has threatened to call
extra session Of the legislature to forostau
such a move so far as the state Of Ten
nessee is concerned
That an understanding Will be reached
between the parallel roads in the south is
regarded most probable by railroad Of
fcialS in this city. One of them remarked
to a Star today that the days of cut
throat competition was past I'm the railroad
business OF the United States.
Railroad meE have come to thoroughly
understand their own territory" he contin-
ued, and through this understanding they
have come to fully recognize the utter non
sense of fighting each other. They have
learned by many bitter experiences that the
only sound business policy to pursue is to
effect community Of interest plan and do
business with each other as well as with
the public and the commerce which is TO
be hauled"
Big Profits Made.
Already stories of the immense profits
which have been derived through the recent
phenomenal rise in the price Of the Rock
Island shares are being told. 1t Is stated
that the Moore Brothers and their imme-
diate followers, w. B. Leeds and ID. g. Reid,
have made 100000, which they will have
in cash in the immediate future, and that
at no distant day they Will realize the same
amount a second time, through the read
justment of the securities Of that company.
This profit can easily be figured out, the
stock of this road has advanced to 500 a
share, and the gentlemen named were large
shareholders. Small holders Of this stock
Will, of course, bene fit in proportion.
The present capital stock Of the Rock
Island lis $4,000 C00 and the statement is
made in New York that the board of
directors of this road VIII meet in New
York next week and recommend To the
shareholders the conversion of this stock
into new securities, consisting of bends,
preferred and common stocks. As the plan
now stands, stockholders will be offered
per cent general mortgage bonds equal to
par of their holdings, together with an
amount Of new preferred and new common
stocks
From unoffi eial sources it was ascertain
ed that the plan under consideration Is
similar to that followed in reorganization
OF the Chicago and Alton railroad in Eo1.
A new Chicago. Rock Island and Pacific
Railroad Company. it is said, VIII take the
place of the present Chicago, Rock Island
and Pacific Railroad Company, and existing
Rock Island securities will be exchanged
for the securities Of the new company. The
basis and manner of this exchange, accord
ing tc one of the companys directors. Is a
problem that mas absorbed the attention Of
several lawyers for some time.
Effect of New Company.
A company, such as Is proposed,
would it is argued, tie up the control OF
the property securely, and through the
marketing of new securities would release
many millions of working capital.
Earnings of the Rock Island are at the
rate of sl1,O0,0oo q year. The system has
been enlarged until it has now about $3.50
miles. The present owners OF the property
figure that they can distribute these earn
inss most advantageoGsly by converting
the old stock into new securities.
To pay the interest on the 5000, 900 of
per cent bonds will require $3,000,0O0, leav-
ing SS,O000O0 applicable to the new pre-
ferred and common stocks. The preferred
will be entitled to 4 per cent as a minimum,
though to how much more as maximum
is not known. At any rate, II is understood
that earnings over and above the amount
required for the preferred shares will be
equal to about per cent on the new eom-
mon. That would cause the common 10
sell around so CO.
The Moores, Reid and Leeds control the
majority OF the 5,o00.o0o stock in the COM
pany. They have, therefore, about S3s.ooo,-
600 or $50 900 shares Their stock was ac-
quired at a price believed to average Sl45
share. The stock sold today at 200, which
would give the majority holders a proht OF
SIS share This is equal to S20.G00.00o. or
in round figures S21. .o0o 900. While 1t would
be impossible to sell the majority of the
stock at 200 in the present form Of the cap
italization il can be easily done when the
sT5O00OoO of stock shall have been con-
verted into bonds, preferred and common
stocl-s.
Latest Combination Rumor.
The rumors of new combinations of roads
continue the latest being the report
that the National City Bank-Rock-
efeller-Standard Oil interests. with a
number Of associated capitalists-have
secured control of the Chicago. Mil
waukee and ST. Paul and that E. H
Hartman Is party TO the DEAL The init
nation was conveyed that the intention is
aota tho fu-o, c.