The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1908-01-06
RAILROAD TRUSTS
STIR COMMISSION,
NEW LAWS URGED
Coast Line and Rock
Island Control Many
Roads.
Demand Made for Leg
iSlation Making I'M
munity impossible.

There is a little corporation With prob
ably less than S5,OOO,O0O actually invest
ed, which absolutely controls over 900
miles of railroad. capitalized at more
than 800 100000.
The little controlling company not
only controls this vast system Of roads,
but denies the jurisdiction Of Federal
supervision Of its affairs, thus practi-
calIy attempting to nullify in important
features The railroad legislation OF the
country.
Another chain Of corporations Is so
organized that less than So 900 Of
stock absolutely controls about 1900
miles Of railroad-the whole vast Rock
Island system, second only to the HaT
riman system in mileage. This corpora
ton likewise denies Federal JuTisdic-
ton OF its affairs.
Calls On Congress to Act.
The Interstate Commerce Commission,
IN its annual report, made public today,
demands to know If Congress intends
10 permit this sort OF thing, and points
out that # Permitted it viii break down
the whole scheme Of Federal supervision
and regulation.
The $5.OOO.O0O corporation is the At
lantic Coast Line Company of Con-
nrCtiCut- The commission explains its
relation in detail. The company has
$l0500.0O nominal capital, but the com
mission says probably not more than
100000 actual investment 1t owns .
per cent of the stock OF the Atlantic
Coast Line railroad. The Atlantic Coast
Line, in turn, owns 81 per cent OF the
stock Of the Louisville and Nashville
The Louisville and Nashville, jointly
with the Southern railway, owns S
per cent of the stock of the 'Monon'
road Chicago, Indianapolis. and Louis
Vile), and leases, jointly with the At
lantic Coast Line Railroad Company,
the Georgia Railroad and Banking Com
Thus is made up a total Of over 5000
miles of railroads, extending through
out the South, and as far North as
ChicagO-au controlled by an invest
ment of probably not more than S.
OOo, 600"
Control of Rock Island.
The commission handles these holding
company schemes without gloves. Ii
tells ln similarly interesting detail OF
the Rock Island system. This is the
most wonderful development of the
holding company ever known. The
Rock Island Company OF New Jersey.
and SIS, COZ, 90 common stock. and no
debt.
This Rock Island company owns ev-
cry dollar OF the Sl45,000,009 stock OF
the Rock Island Railroad Company Of
Iowa The Rock Island company owns
most Of the stock of the Chicago, Rock
Island, and Pacific Railway Company,
which owns the railroad known by that
meme. The Rock Island Railroad Com
pany IN turn owns 90 per cent of the
aferFaTa
railroad and the Chicago. Rock Island.
and Pacific Railway Company owns IS
per cent Of the stock of the Chicago
and Alton. The St. Louis and San Fran
cisco owns SPA per cent OF the stock
OF the Chicago and Eastern Illinois
and the Chicago and Eastern Illinois
owns 60 per cent of the stock Of the
Evansville and Terre Haute.
That makes up the Rock Island sys-
TEN. tt all traces back TO the Rock
Island Company Of New Jersey.
Elect All the Directors.
Now. the charter of the Rock Island
Company Of New Jersey provides that
its preferred stock shall elect four of
It's seven direCtorg-in other words, con-
trolls its directory, which cor trolls the
whole chain Of properties. electing the
directors Of every underlying company
in the long and tangled chain. There
IS only S49.0J0090 of this preferred stock;
50 that a majority, or say So 100000, OF
this actually controls the great Rock
Island system.
Just to mako assurance doubly sure
the charter Of the Rock Island Company
provides that its preferred stock can
not be increased except by two-thiTds
affirmative vote of both the preferred
and the C0mmOn-dn utter impOssibility-
And the Interstate Commerce Com
mission wants Congress 10 think on
these things. and decide whether they
are right Il adds that IL is going
20 have a legal test OF the questions
involved, but as that viii take a long
time. Congress is asked to legislate so
as TO assure that these holding COM
pany systems may make no clai14i 10
any sort OF immunity from control by
the Federal power.