The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1907-07-14


From this brief synopsis of the ex.
p!oitation Of the Chicago < Alton. it
Is evident tina its history is rich in
Illustrations of various methods Of in
eefensible financing First came the
lprofit to the stockholders arising out
of the sale To themselves of SCI. 000.-
600 Of IiasfIs-s So which sold for sew
eral succeeding years for S21s to 81
Second came the 30 ners cent dividend
based on amounts expended from I'M
come for improvements. much of ID
nearly thirty years before. ana rel
Gently capitalized. Third came the
psued0 transfer 10 Stanton. and his
contract under which the new COM
pahv paid s10000,a00 in cash for pre-
ferred stock which had cost less than
s7000.000, Fourth come the CONVEX
sion Of 1929 shares of common
stock in the Railroad company into
195,42S shares Of common stock pius
l94S90 shares OF the preferred stock
IN the railway company, part of which
was sold to the Union Pacific at SGiz
share Fifth came the sale Of the
ST. Louis. Peoria g. Northern for 81
cash. Sixth came whatever interest
the syndicate may have had In the
sale to Kuhn, Loeb & Co. of S220aa-
oaQ Of bonds al 60 cents on the dollar
seventh came the fee Of 100000 to
NJ. Hartman for financing the enter.
prise This analysis is no doubt in
complete but it is suggestive
BY way OF Justification or excuse
We are told hat the methods Of the
financing Of railroads which prevailed
in the year 1906 are now obsolete,
nwing o q higher degree Of con /
seriousness among the fnanciers; and. !.
moreover, that the Chicago & Alton I.
should not he regarded as an Isolated I
instance, inasmuch as il was dealt
with much as many other roads were
at that period
The first of these statements is. we
trust, true; the latter statement is not I
calculated to uphold the value Of
American railroad securities.
me ILLINOIS, central.
The Illinois Central can not be re- /
garded as a competing line with the
'nion Pacific; but It is a competing
me VITA the Chicago & Alton railway 4
which is jointly controlled. through 4
stock ownership. by the Union Paei-I
sc and the Ro-k Island. and is maui- /
testify a competing line with the Rock /
Island. In connection with the Union /
Pacific he Illinois Central would be /
competitive with the Southern Pacific 1
1t owns lines OF railroad extending I
from Chicago 20 Omaha ST. Louis /
and New Orleans. At Camel BluH
IL connects with the Union Pacific, 4
and at New Orleans with the South I
crn Pacific. A very considerable part /
Of the business originating on the Illi-I
nois Central between Chicago and I
New Orleans destined for Pacific /
coast points may go By either route; /
that is it may go south 10 New Or
leans and thence via the Southern !
Pacific or it may go 10 Omaha and /
thence via the Union Pacific. these
two companies were in active compe- /
tition with each other for business
originating on the Illinois Central sys- /
TEN.
The Illinois Central. as a glance ar I
tho map will show, is the eastern side I
OF a railroad parallelogram. The
ether sides Of which are the Union /
Pacific and Short Line sy~'oa to /
Portland on the north. TIE Solthern /
Pacific system from Portland to Les
Angeles on the west, and from Los