Daily press. [volume] (Newport News, Va.) 1896-current, 1907-04-12
ALTON DEAL.

The report In detail which Attorney
General Stead has submitted TO Gov.
ernor Deneen Of Illinois regarding the
Chicago 4 Alton deal shows n study
OF this financial transaction that de-
stroys good deal OF the plnusibilIty
OF the argument by Paul ID. Cravath
before the Interstate Commerce Com
mission. Mir Cravath undertook To
prove that what was done by Edward
II. Hartman and his associates was
done in the reorganization of numer-
GUS Industrial and transportation
corporations In those days that after
all the Chicago Il Alton was not over.
I capitalized.
IT Is unnecessary to, say that be-
cause 1t was the common practice m
hight financial circles to expand capt.
tai after the Chicago & Alton fashion
tho nets of Harmon and his clique
We're any tho loss blameworthy. 1t
was the common practice OF railroads
TO grant rebates and In other ways
discriminate against shippers and re.
ceivers and communities, but that did
not warrant the favors. In a way the
oyorcapital2ation of the Chicago IL
Alton Is, also, somewhat beside the
roint. though II was through the re.
capitalization that the syndicate made
its enormous profits.
Tho main point is that n handful of
an--Attorney General Stead says
there wore only four in fact MS well rs
sof record-so ordered security issues
mat they were able to make, accord
Ing to Mr.. Stead, Sl4,993,00O ON the
: deal and S9,G55.600 on another. While
doing this they added more than $50,
O0O00O to the indebtedness OF the
company, of which. according to Mr..
ilarriman's own testimony before the
Interstate Commerce Commission. hi,
$22500,0OO went to the purposes for
which an expansion in capital shouiu
goyoetterments, improvements. eA.
tensions, etc. No one has doubted
tnat the Chicago Il Alton was in poor
condition. as compared with ITS com.
petitors, at the time the Hartman
syndicate look it over, but $50, 900 900
was not need to bring it up to date.
as 1t apparent from Mr. Hartman s.
testimony
or the S40,000.00O bond issue hrs.
authorized by the new managers q,
The company. $4,000 900 was sold 10
Inc stockholders at 65. The synd,.
cate, 1t is to be remembered. owneu
"a per cent. of the stock. These bono,
were subsequently sold by the stock.
holders Mt about 90. Here is Mr..
Crayath's explanation of how the
stockholders happened to get so mucn
for their securities: 1T is true that.
by reason of the low interest rates
/ which prevailed in 1900 and OF the
great demand for bonds which were
I $32,000,000 of 3 per cent. bonds sold nv
savings bank investments in the state
OF New York, part of the $32, 900 900
sold by the company at 6o we're resold
! by the stockholders an average price
somewhat in excess of 90, thus produc.
ing profit to the stockholders much
greater than was originally contem.
plated. But no one was injured, mas.
much as all the stockholders shared
4 pro rata In the purchase of the bonds
and in the opportunity for PRONE. AS
q mater OF fact, the members of the
syndicate who elected to hold the
bonds as an Investment have To-Day
y very small profit, as, owing to the
I change In the Investment conditions
the bonds are now selling at but =