The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-12-21
FINANCIAL SCANDAL
THREATENS ALTON.
Report of Deficit Of $3,0oo,OOO in
Railroad Stirs Wall
Street.
GROSS IRREGULARITIES
SAID TO HAVE BEEN FOUND
Men Prominent in the Financial
" ID May Be Involved in
i Exposure.
apeoial to The Journal.

Special to The Journal.
New York. Dec. 21.-The rumor of a
deficit of $3,000,000 in Chicago s. Alton
railroad finances and that Irregularities
exceeding that amount have been dis
covered in the books, has caused a
furry in railroad circles.
Public curiosity is whetted by the
admissions made by directors today
that expert accountants have been put
to work on the books of the Alton.
Wall street was further startled by
the report that Alton B. Parker was
called to the Rock Island offices at 4
Broadway. for conference with Off
Gals over the tangled affairs of the
May Reveal Scandal.
It is generally expected in financial
circles That litigation and probably a
great financial scandal will grow out
of the affair.
Every effort is being made to pre-
vent publicity. Officers and directors
of both the Rock Island, and Alton
dodge inquiries, and when cornered,
make technical denials Of the persist
emit rumor in Wall street that gross
which will involve men who have oc-
cupied high positions in the financial
world. !s-&
Names are freely mentioned in Wall
street in connection with the matter,
and despite the efforts to maintain
secrecy. the opinion is expressed that
full details of the scandal will reach
the public in short time. $50
No Shortage, They Say. A..
Directors who met in long secret
Rtssion today refused to discuss the
affair, but they denied the existence Of
o shortage. There is, however, some
thing which must be explained to the
investing public. Since February. 1899,
the Alton's capital stock has been in
creased from $31 ,303,950 to $132.389, 900
more than 100000 00-and the mile
age Of the road has remained the same,
e43 miles, a ,s.sSs +
The investing public is now asking:
stWho got the $500, 900, OOO9n
Shortly after E. H. Hartman ac-
CURED practically all the Alton stock
In February of 1899 ($2o0, paid for pre-.
ferred, $175 for commonly o number Of
transactions occurred that have never
In October, or eight months later,
shareholders of the Chicago 6 Alton
Railroad company authorized $40 ,000,-
600 3 per cent bond issue, and 80 per
cent Of the issue was offered to share
holders at So cents.
Rival interests at War.
One month before the distribution Of
was leased for ninety whine years to q
new corporation called the Chicago &
Alton Railway company.
The new company with $19, 542,S00
common and $19,544,00 preferred
stock, then issued $22,000,000 Of 81
per cent collateral trust bonds, secured
by the deposit Of the old Chicago &
A 81
The capitalization was thus increased
from 31,303,950 to $l32,389,900. part
of which was used to pay the. 30 per
cent cash dividends. IS 81
Local railway officials take the re-
ports sent out from New York to indi-
cate that there are serious discussions
between the Rock Island and Harri-
man interests which have been running
the Alton. under an agreement entered
into a year ago to stop bitter fight
between them for control. .--.s
The Hartman interests, under this
agreement had a majority of the board
of directors last year, and E. II. Harri-
: man was chairman of the board. At
the annual meeting on Oct. 8, the Rock
Island secured a majority Of the direc-
tors, and B. F. Yoakum Of the Rock
man Of the board. The Rock Island in
terests are understood to be dissatis-
fed with the way the Hartman inter
ests ran the line last year.
The facts given indicate that the
Hartman regime, instead of being
stingy in its use Of money for i'm
provements, has been lavish. This was
true not only last year, but during the
previous years when it was in control.
The aggregate expenditures for i'm
provements during the five years of
HaTiman control was asserted to have
hepn not less than &1Q QQQ Qaa -----------