The Birmingham age-herald., 1903-08-09

on their capital out of the ordinary profits of banking.
 The freedom with which the names of firms and individuals have been used in rumors of financial trouble for several weeks has astonished even the older mem bers of the Wall street community. Any one who had been in the stock market att mosphere recently could name off hand a score of very prominent banking houses which were reported to be in trouble. Some of the firms concerned became high ly, not to say unnecessarily, indignant that their credit and prestige should be thus questioned, and one of them is said to have maae representations about 1t to the Stock Exchange authorities. demand ing that the nstigators of the talk be searched out and punished Rumors play an important part in the affairs of Wall street. This is the most credulous com munity on earth and it's susceptibility is constantly being played upon. Any old broker Will authority for the assertion that the circulation of unfounded rumors Is an art regularly practiced by certain class of stock market operators. Nobody ever heard of a member of the Stock Ex- change being disciplined for circulating bull rumors but if the invention and cir- culation of false reports calculated to fa- ciitate the distribution of stocks at ficti- cious prices to the public are not as sin full as equally false reports intended to depress prices, then that cynical operator was right when he said that Wall streets only use for the public Is to sell 1t stocks. It Is extremely doubtful whether any of the rumors affecting the credit of inoivid- uals and firms in Wall street that have recently circulated had malicious origin. The firms and individuals have but them- selves to thank. They became identified with promotions which have since col- lapsed. When some one of the newer stocks breaks sharply without any ap- parent reason traders at once call up in mind the individual or firms that had been sponsor to that stock and rumors inevitably result. The house that is sup posed to have demanded of the stock ex- change authorities that the instigators of rumors affecting it's credit be found and disciplined, itself has been prom- nently identified with three industrial promotions that have turned out unprof- itably. Perhaps 1t would be just as well for many of these firms to conceal their indignation, because by being so touchy as to their financial responsibility they invite suspicion.
 Wall street Is slow to realize the tre- mendous growth and development of the Rock Island system, which, indeed, Is not surprising in view of the extraordi- nary evolution of the property in the hands of the Moore party. When the process of financial welding shall be com pletely rounded out, and after all of the proposed new bond issue has been placed the capitalization of the Rock Island per mile will be smaller than that of other railroads that are granted to be con servatiyely capitalized. The following from an authoritative but unofficial source presents briefly some explanatory t.. $250 00O, GOO Rock Island bond issue.
 There is In the Rock Island system 500 miles of new road free from bonded in- debtedness This new mileage has been built during the past two years and paid for out of the treasury of the company, cash outlay of approximately $16,0O0,- GOO. There Is no emergency requiring the immediate reimbursement of this money, but 1t will have 10 be repaid some time and the management is making provision therefor so that 1t may be done when the financial situation clears.
 The cost of the construction of the St. Louis Kansas City and Colorado road, from St. Louis to Kansas City Is being met inthe same way, the money being checked out of the treasury. When this property was bought from Governor Francis and his associates 105 miles of road west from St. Louis had been com pleted, leaving 195 miles to build into Kansas City. The new road runs through a rough country and as 1t is being built up to the highest standard of excellence the work is expensive-about $3S000 per mile on the new and $1o,O00 on the old road This with bridges, sta tions. second track. etc. together with the purchase money, calls for another $20 000,000
 The Rock Islands one-half of the cost of the great Rock Isaud-Lake Shore passenger station in Chicago, s1S0O 900, was a treasury expenditure. Shops at Moline costing s1,500,000 are in process of construction-another treasury draft.
 In addition to the necessity for provid- ing for repayment to the treasury of ap- proximately $40,0OO.OOO described in the foregoing, there are outstanding $1s,0Oo- GOO Frisco collateral bonds subject to call at any interest period at 102, and SEQ 900 Choctaw collateral is subject to call at any interest period at 101. Old Rock Island 6s to the amount of $12,0 GOO will fall due in few years.
 These are the things immediately in sight. The management knows of and has in mind no other, but deems 1t the part of wisdom while formulating fin- ancial plan and policy to make provision for the contingencies of the distant fut- ure and do 1t all at once instead of piece meal It fails to see either the expeden- cy or the WlSuOm or dlSturDing the Sltu- ation every time the occasion may arise for routine financial adjustment or for property development and betterment
 The thought may also have possibly oc- cured to the management that it would be just as we'll to take time by the fore lock and once and for all place the prop erty beyond the reach of hostile state legislation. Already there is agitation in many western states on the proposal to place limit on the power of railroads to bond themselves. Looking into the future the thought might naturally sug- gest itself that now is as good a time as any to take out insurance against a demagoglc attacks.
 In answer to the criticism that this Is no time to bring out new bond issues it can only be repeated that the mauage- ment has no intention of organizing a deluge, such as seems to be apprehended in ill-informed quarters. IL is merely going through the necessary legal form alities to secure authority for the lfroner conduct of the company's finances The directors have already given approval and as the annual meting of stockholders is held in October 1t was thought advssa- ble to bring the subject before the own CTS of the property then instead of call ing a. special meeting later on.
 
 Birmingham has twelve beakeries that