Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-03-24
CHICAGO AND ALTON DEAL
Details of Scheme by Which the Great
Illinois Road Was Financed.
PEOPLE GOT THE BENEFIT
Thirty Per Cent Freight Rate Reduc-
ton Killed Hope of Return on Com
mon Stock, Says the Financier.

Special Dispatch to The Star.
NEW YORK, March 23.-Asked today
what he thought of Senator Cullom's re-
marks concerning him. L. II. Hartman
said
Senator Cullom, I am sure, does not
really wish to put me in the penitentiary.
lie simply regrets that l am not in the
poor house.
Eight years ago we found the great
railroad of his great state of Illinois in
moribund and decadent condition. 1t had
accumulated over series of years stock
holders surplus, but was unable to get any
benefit therefrom except through further
expenditure of more than S2O,0O0,OOO. The
capital of the company at that date was
about so, 100000. syndicate of more
than 100. represented by four managers,
bought the road at the going market price
of s175 and $500 per share, investing therein
nearly $4,000, coo, and 100000 for fifty
eight additional miles.
Whit Might Have Been.
"As investors in Chicago and Alton at
this high cost we could have remained
quiet and even seen our property shrink
and shrivel by the millions and tens of
millions under the 30 per cent reduction in
railroad freight rates which has taken
place in the past eight years in that terri
tory and the road and its owners might
have been on the way to the poor house.
Now l prefer the penitentary. if that
Is the reward for the upbuilding of the
railroad properties of this country, rather
than the poor house, which is the reward of
unprogressive railway management
More than SOD 600 additional has been
expended in the building UP of the Alton,
besides our original investment of $4,000
COO, and the total dividend and interest
disbursI n,cnts lave not been increased By
more than three quarters of a million,
less than per cent on the new money. CO
day the road is handling nearly three times
the business it did eight years ago, and
the territory :eII ed by it allowed to expand
in that proportion,
Low-Rate Bonds Did It.
This was accomplished solely by the
sale of low-rate bonds at a discount an I
the chOpping up of the capital into three
different classes of securities, viz bonds,
preferred stock and common stock, where
substantially one existed before. and in place
OF per cent and y per cent bonds and
shares there IS nov nothing bearing higher
than PEI cent on re preferred stock AID
thc largest scCurity is a bond paying per
cont.
"The peop'e CT Illinois and the Chicago
AMI Alton read Rad the benefit of the .ow-
est rate ever ranCd upon a railroad bond
in this country, aid 1t had the benefit of
the value the speculative markets place on
common :tocks whose main asset Is hope in
tn growth Of tie country. just laws and
the j'Ist administrator thereof.
For the People-And Others.
we sold these CnIcago and Alton s,curi-
ties for the benefit of the state of Illinois
of the Chicago ara Alton road and Of the
man Who rad the courage to buy the road
for over S42.OOO,OO0 and to put over 500
100000 more into 1t, making the total
amount more than s6i.OOO,O0o. Other Inter
ests bought the common stock. and a so per
ccit reduction in freight rates in that Ter
ri,ory blasted the hopes they had in it.
"MSny years CT my life have been de-
voted to the improve ment and upbulldins of
two Of tie mos, ini ortant railroad lines Of
the state If IllirCt'. lie Illinois Central and
the Chicago and Alton"