New-York tribune., 1902-08-01
ROCK ISLAND PLAN OUT,
TWO NEW COMPANIES REQUIRED TO
EFFECT REORGANIZATIoN-
As FINAL RESULT CONTROL CAN BE
HELD BY A COMPARATIVELY SMALL
AMOUNT OF PREFERRED STOCK

The Rock Island readjustment plan. whereby it Is
r,ronosed TO initiate the capitalization OF the cOh
-. 70 nearly three times its present amount,
Was made public late yesterday afternoon Inc
r,lsn which according to the orlclaI clrculaI u
the stockholders has already been approved py
the holders Of a majority of this Che ChlcAgo'
Rock Island and Pacific Railway company capt
tal stock including the members of the board OF
directors" and which is "recommended 10 ule
stockholders as one which, in the judgment OF the
members Of board il is to the interest OF STOCK
holders to accept is in substance as follows: Two
-,avv cornorations have been organized, the chi
cago Rock Island and Pacific Railroad COMPANY
fof Iowa) with authorized securities consisting OF
s125 100000 stock and s5.eo0o per cent god poIus
maturing in 2oG2; and the Rock Island Company 'ol
Nen,-Jersev) with an authorized capital stock OF
s150e00e9D. of which s54.GOO00O is non-cumulatve
preferred stock and ss6.OOo,ooo is common stock
The Rock Island company is to become the ult-
mate owner Of the present railway company
through a rather complex interchange OF the Sc
rities of the three corporations The circular let
ter issued yesterday 10 the shareholders OF the
Chicago, Rock Island and Pacific Railway Company
contains the terms which the new Chicago. ROCK
Island and Pacific Railroad Company offers to pur-
chase their stock the proposition being to give in
exchange for each share (par value SoO OF the
present stock 500 in the railroad companys i per
cent gold bonds so preferred stock and 500
in common stock of the Rock Island company But
in order that the railroad company should be able
70 offer to shareholders of the present company
the stock the Rock Island company in partial ex-
change their holdings, it has been necessary TO
make an agreement whereby the Rock Island COM
pany purchases the s25oOO0oe capital stock of the
Iowa company dhe Chicago. Rock Island and Pa
ciic Railroad Company of Iowa). the consideration
for the purchase being the delivery to the Iowa
company of so much OF the sl5o,0moN stock OF the
Rock Island company will be required for carry
ing ont the terms of the offer-that is S52H0u" OF
the Rock Island companys s54Go.eOo preferred
stock and SIS 1000 Of its common stock Inc caPi-
tai stock Of the Rock Island company not required
for the purposes Of the offer is reserved for future
.ssue for the acquisition of additional properties
and other corporate purposes. The preferred STOCK
Of the Rock Island company Is entitled II non
cumulative yearly dividends at the rate OF per
cent for 1903 and for each year thereafter until ana
Including 1919. at the rate of per for 1910 and
for each year thereafter until and including 1910
and at the rate Of per cent thereafter The pre-
terred stock is also preferred as to capital Inc
holders of the preferred stock entitled To eject
iority Of directors but such privilege may
be surrendered with the consent of the holders OF
tpzo-thrds in amount Of the preferred stock The
amount of the preferred stock cannot be Increased
save with the consent of two-thirds of each class
Of stock.
The present company has s75.ooOGpo capital stock.
all Of one class that to hold absolute control re-
ouires the ownership of more than SS75o@1 par
value or the locking up of twice that amount OF
capital las the stock is selling around 2Vo)
Nv the device now proposed by the management,
bonds which probably be disposed OF at nearly
par are given, dollar for dollar in par value, in
exchange for the present stock. and there are
given with the bonds equal amount in common
stock and 20 per in preferred stock the latter
controlling the management To secure that con-
troll the dominant interests will need TO own only
q trffe more than s26 2Oe0 tpar value) OF the new
preferred stock. which undoubtedly VIII Tor some
time 10 come rule far below N0-
The directors and officers of the new ROCK islaho
Company follows:
Directors-R r. Cable Marshall Field, H. {.
Frick William H. Moore, J. H. Moore, d. g. Relo'
W B. Leeds, Ogden Mills. George s Brewster An
son r Flower. F. L. Hine, George G. McMurtry
and George T. Boggs.
Finance comnittee-W. H. Moore. chairman;
Marshall Field. ". B. Lee1s. d. G. Reid j. H.
Moore and r. l.. Hine.
Oficers-W B. Leeds. president; d Il teld'
secretary and treasurer and George T Boggs. as
sstant secretary and assistant treasurer.
The net income of the Chicago Rock Island and
Pacific Railway Company for the fiscal year ending
March 81 1902 was 81 O79. .s69 Deducting s2S5l522
interest on the bonded debt, and about $4,000 for
rentals there remained applicable for dividends
and for surplus account s., ,22o9al- Under the new
plan per cent interest on 900 new bonds must
be paid amounting TO 100000. and the per cent
dividend TO which the $50 5000oe of the Rock Island
Companys preferred stock viii be entitled VIII take
s. 1905 600 more leaving, if the net income for the
current wear shall be approximately the same as
for .he year ended March 81 about 100000 appAca-
be 10 surplus account, against 973 040 surplus for
the last year of the Chicago, Rock Island ana IA
c,ec Railway Company or else possibly 10 be ap-
ned to the navment Of a dividend the COM
mon stock. A statement was issued yesterday ny
a leading interest in Rock Island setting forth the
Importance and the scope of the Rock Island sgs-
TEN and its prospects of future development This
statement is in part as follows:
The Chicago. Rock Island and Pacific Railway
n 1900 embraced miles Of tracks and trackage
and a through line only from Chicago TO Den,
Yer and from Chicago 70 Kansas City, and a local
proposition southwest from Kansas City as far as
Texas BY combination with the Burlington, Cedar
Rapids and Northern Railroad, the Rock Island
snG Peoria the Choctaw. Oklahoma and Cult
building extension TO FL Paso, a line between
Kansas City and St Louis. connection between
Fort Worth and Galveston in Texas. it has to-day
7e miles railroad in operation and an addition
al l,0eO miles in course of construction making a
total mileage when completed. of 5000 miles.
the praries Of Dakota-timber, coal, cotton. spring
wheat winter wheat, corn, stock and cattle from
II extends from the parallel through St. Paul and
South Dakota south TO the Gulf of Mexico. II is
a north and south road from St Paul 70 the Gulf
600 miles wide It a trunk line from Chicago to
+t,e f-oIc-a5o eatewavs an Denver and Pueblo II
is trunk line from st. Louis through Kansas city
10 the same points in Colorado II is a trunk line
from Chicago. southwest through Kansas City, El
Paso. Tex. there connecting with all the growing
states and Territories Of New-Mexico and Arizona.
II trunk line for all the southern states from
Memphis west through me rlcnest SeGp9n OF T tne
ritory and Oklahoma. to the points before men
Toned With the completion OF its Gal Galveston line,
10 the Colorado gateways and has secured an outlet
TO the sea for IT'S 5000 miles Of road -
The table appended indicates the basis of the
Rcck Island Reorganization compared with other
Anes OF railroad operating IN the same territory
Chicago and Northwestern selling approximately $4,000
chicago Rock Island Pacific Cproposedl.
based on present 1000 miles in operation:
Common stock at ...--...--.... lo7O0
Total par value Of securities proposed per mile s47 400