Omaha daily bee., 1903-05-02

a total capital stock Of $12, 500, 900, the
stock being issued to Mr.. Yerkes and those
associated with him. The total bonds out
standing amounted to 81 .6S5, 900. represent
ing the cost of the properties. The stock
was watered. or a so-ealled bonus.
PROFIT in These Lines.
These little lines, which proved 30
profitable to their creator, were as follows:
Chi. Elec. Transit. 3 10000, 5i,os1,o 600 4S.S
Chi. & Jen'on Urban 100000 2oS,OO ais
EvaTnsston Electrie LCS,CC0o 10000 $50
Ogden Ave. Raiiif'd s s,SSSSS $500 $50 800
Totals ...........s So, 5000 o M,2s6,O 900 2O5. II
The lines were built on the north and
west sides. Where one OF them gave pas
sengers to both systems, each system
guaranteed a part Of the bonds. When the
building of the lines had been completed,
they practically hedged about the two old
systems. Some OF them were improbable,
while others paid dividends.
To put the good and bad together into a
harmonious whole, Mr.. Yerkes conceived
the plan Of uniting them under the name
OF the Chicago Consolidated Traction COM
pany. Thereupon he exchanged the stock
OF the seven companies for stock in the
Chicago Consolidated Traction company.
In this operation the total old capital Of
81, SOC, 1000 was increased to S15, 900, 900. The
Consolidated company was organized Feb
ruary II, 1899.
Yerkes starts "CIeaninE Up"
Meanwhile Mr.. Yerkes had begun nego-
t~iations for the sale OF his stock In the
North and West Chicago Street Railroad
companies to interests which organized on
May "a. 1899. the Chicago Union Traction
company. Mr.. Yerkes had been unsuc-
cessful In securing an extension Of fran
chises. The date Of expiration, 1908, for
the old franchises, was drawing near and
the situation becoming unsatisfactory to
the holders Of the securities Of the North
and West Chicago Street Railroad COM
panies.
What to do was a question which some
Chicago capitalists, including Mr.. Yerkes
himself, and some New York and Phila-
deiphia capitalists set about figuring out.
Those were days when the stock markets
doomed and water was purchased as freely
as bonds. 1t seemed opportune to clear
up the situation and make money besides.
So Mr.. Yerkes helped his friends organize
the Chicago Union Traction company. They
fixed Its capital at S12, 900, 900 preferred s
per cent cumulative stock and $40, 600, 900
NomihOh bNOChs Ancu lenses were executed
by which the North and West Chicago
Street Railroad companies and their un-
DERIVING properties we're turned over to the
Chicago Union Traction company. which
guaranteed dividends Of 6 per cent per
annum on the capital Of the West Chicago
Street Railroad company-S13, 1s9, 000-and
~ per cent dividends on the capital Of the
North Chicago Street Railroad company
1890. 900.
Unloads on Hts Friends.
Mr.. Yerkes sold to the Union Traction
company 10000 shares of North Chicago
stock and $4,000 shares OF West Chicago
stock. The purchase price was something
less than So 900. 900. This money was
raised through the sale Of the SIP, 900, 900 Of
Union Traction preferred stock at par, with
which was given Ss,O00.O 900 of common
stock as a bonus.
Mr.. Yerkes himself subscribed literally
and helped the cause along. Everybody
seemed to think It was a good thing. and
one Of the features was tina Of the $780,
100000 Of common stock s14. 900, 900 was abb
solutely divided among the promoters Of
the company, and subsequently a good part
Of 1t was sold to the public at prices vary
ing from 29k to SO.
To show how good MI. Yerkes thought
this common stock to be. he stipulated that
II the earnings Of the company for the first
year were in excess Of 5 per cent he was
to be paid a bonus. That made II appear
that the company was sure to earn 3 per
cent on the common shares, and that is
what most OF the unfortunate purchasers
OF the stock believed.
They also thought-that Is, those ac-
Quainted with the deal-that Mr.. Yerkes
would get a bonus. Unhappily, the 3 per
cent was not earned. In fact. the earnings
OF the nrst year over the s per cent divi-
dends on the preferred were S4,075. or :
per cent on the common shares. So Mr..
Yerkes did not set the bonus That was
the result OF the nrst years operations.
Owners Left I'm Lurch.
For the year ending June 80. 1901. being
the second years operations, the company
began going to the bad. It was unable to
earn even its preferred dividend. and after
paying that Of the frst quarter. $3.50. 900,
suspended payments. and has made none
since. Instead Of making distributions, II
has been forced to borrow money, and it's
floating Indebtedness. according to the
court records. Is tS,4OO, 900.
Shortly after Mr.. Yerkes sold out his
stock to the Union Traction company he
began figuring also on selling the Chicago
Consolidated traction to the same concern.
They Iopnd the consolidated lines inter-
woven with their OWL property In such q
way that some agreement with the owner Of
these lines had to be reached. This started
q long series Of negotiations.
II took longer to sell the Consolidated
Traction than It did to dispose Of his in
terest In the two old companies. II was
not until 1900 that an operating agreement
was executed between the Chicago Union
Traction company and the Consolidated
Traction company. Consolidated Traction
stock had been selling around 70 on the fear
that II would be taken over at & high price.
But when terms nnRily we're reached the
Consolidated was acquired for SO. 700. 900. y
AZ per cent bonds. spread over the Con-
sOlidated property itself. Mr.. Yerkes got
most OF these bonds, since he owned nearly
all Of the consolidated stock.
With the disposition OF this company and
) the subsequent sale OF the Union Elevated
, and Northwestern Elevated stocks, Yerkel
! turned his face toward London. leaving be.
( hind a bankrupt Chicago Union Traction
company as = monument 10 his system 0i
barter and sale and t~nGonious laundering