The Birmingham age-herald., 1907-05-05
GATES WITHDRAWAL IS EVENT OF WEEK Story of His Rapid Elise in the Financial World UNION PACIFIC GOSSIP
 :. Col. Wilson Takes Hold of Wireless Companies With Determination to > Straighten Out the Tangled
 Web.
UNION PACIFIC GOSSIP
BY W. G. NICHOLAS.

BY w. c. NICHOLAS.
 New York May 4-(Special. 1.-The real ly interesting happening in this full week in Wall street is the announcement of the dissolution of the House of Twelve Partners, the firm that John w. Gates founded when he came to New York to play the great Wall street game. While there have been rumors that MT Gates was badly hit in the March panic, his friends say that he is worth $25,OO0000, and is giving up his brokerage business because he wants to enjoy more of the pleasures of life. Gates has had a me- teoric career. He was a farmers boy out west, and as a young man he ran hardware store in a country town When barbed wire began to be used by the farmers Gates saw what possibilities there were in it's manufacture. One day he sold his business and went to see the man in Illinois from whom he had been buying his barbed wire. This was Col Isaac FL wood, a pioneer in the business. He was not looking for partners, but he gave the country shopkeeper a position as travel ing agent for the concern. The trade grew rapidly. Colonel Elwood prospered, and so did Gates in a lesser degree. But he wanted an interest in the business. Not getting it, he left Colonel Elwood and put all his savings into a barbed wire factory. Soon Gates became a danger ous rival. Colonel Elwood brought an action for infringement of patent right. A bitter fight was the result Gates hung on with bulldog tenacity. The end of it was that Colonel Elwood had to give his young rival an interest in his busi- ness.
 From that day Gates rise was rapid. He began "corralling'' barbed wire fac tories through the west and when he became master of the situation he formed a trust" the nucleus of the combination he formed later under the name of the American Steel and Wire company, with capital of $SO000.OOO. When the steel trust was foated MT Gates turned his company over to the underwriters for nearly $100000,000, $50,0O0,0O0 in preferred stock and s50,0OO,0O0 in common. No small part of this stock was MT. Gates per- sonal share of the transaction. Gates. a trolling In wealth. from the sale of steel shares on a buoyant market, be- came a daring free lance. With a prac- tically unlimited amount of free capital at his command. and an ail-absorbing pas sion for playing for high stakes, he made wagers of a magnitude that made the veteran financiers of Wall street gasp. And behind him he had a crowd of reck- lessly courageous westerners ready to fol- low him blindly. The Gates crowd" be- came big marget factor.
 When Gates was a country storekeeper out in Illinois his fondness for specula- ton got him into playing poker with the railway men who made their homes at the junction. Many a night he spent in a 'boxcar'' on the siding, playing the great American game by the light of a trainmans lantern.
 Great financer, that man Gates" ex- claimed a railway fireman on a western road one day, as he read how the "plunger' had won control of railway system overnight.
 Yes" responded the old engine driver, i've knew that before Wall street ever ' heard of him. when he raked in the jack pot out at Turner Junction"
 When the Wall street game became monotonous, Gates wandered abroad. His stay in England in 1900 after the steel and wire episode, was spectacular. His friend. John A. Drake, took string of horses to England and Wishard, his wizard trainer, did stunts on the English race courses. The Royal Flush cup was a nine days wonder When this selling platter ran in Dralke's colors in the Goodwood cup Gates backed him down from 25 to to 6 to 1, because the horse had done a record trial under the trainers watch. Gates wagered hundreds, thousands on the horse, who bore the name of the highest hand in poker, until the book makers cried enough" Johnny Reiff won the race in canter. Gates won more than 9100,o00.
 Now that Union Pacific is again show ing strength in the market, the rumor mongers, instead of predicting par for ofO toIIi rrrl1of ft11 n MT. Hartman Is. are making bets that holding company will be formed for the treasury holdings of the securities of other roads and that Union Pacific stock holders will receive valuable rights in the form of stock in this holding company But this was just as true when Union Pacific was selling s20 lower as it is today. The treasury holdings may be seen by all who have eyes and whatever course the company may be forced to adopt by reason of government interference, no power cam take from the stockholders the property that Is theirs Whether the Union Pacific property goes on as 1t is or wrether the railroad is divorced from the treasury holdings in other roads, the value of the whole property remains the same. In this connection an inter esting question arises as to the partic- patton of the preferred stock in any rights" One commentator says: "If a new Union Pacific holding com pany is to be formed Its shares must necessarily be awarded to the hoIuers of Union Pacific preferred stock in the same proportion as to owners of the companys common stock, and obviously the rights on the preferred shares would be much greater than on the common This is a matter concerning which no little con- fusion of sentiment exists in the financial district. The idea prevails in many quar- ters that Union Pacific preferred stock as limited to the receipt of dividends at the rate of per cent has no further