New-York tribune., 1912-01-23
Burlington and Rock Island Said
To Be Negotiating for the
Denver & Rio Grande.
GREAT NORTHERN IN DEAL
Negotiations Believed to Include
Proposed Purchase by Latter
Line of Northern Pacific's
Equity in c., B. G. 0.

Western railway field. These negotiations
primarily involve the acquisition by the
Chicago Burlington e Quincy Railroad
and the Rock Island Of part of the holdings
OF the Missouri Pacific Railway Company
In the Denver & Rio Grande Railroad
which controls the Western Pacific Rail-
way. and incidentally are related TO the
long expected plan for purchase by the
Great Northern Railway Company OF the
Northern Pacifcs equity in the Chicago'
Burlington & Quincy and TO the recent
traffic arrangement made between the
Northern Pacific and the Chicago & North
Western.
The Missouri Pacific extends from ST.
Louis and Kansas City TO Omaha and west
ward to Pueblo, Col. Early in 1901 1t bought
control of the Denver e. Rio Grande halI-
road, which at about the same time Sc
cured control Of the Rio Grande western
the two latter roads. which were consoh-
dated in July, 1905, forming line from the
Missouri Pacific terminus at Pueblo ana
from Denver to Salt Lake City.
About 1903 the Gould interests began the
construction of the Western Pacihc Ran
way from Salt Lake City to the Paclhc
Coast at Oakland. across the bay from
San Francisco The Western Pacific was
nartlv opened for traffic in December, 1909,
hut was not placed in full operation untii
the following July.
The Denver g. Rio Grande owns $5OOOO'V1
of the s75O00OOO capital stock Of the vest
ern Pacific and also its S25,VU,VVV ssCohu
o mortgage bonds purchased by the Denver
& Rio Grande to enable the Western "a
cifc road TO be completed, and 1t guaran-
tees the payment of interest on the west
ern Pacihcs bonds. From 1901 until Janu-
arv 1911, the Denver & Rio Grande palo
regularly dividends at the rate OF per cent
on it's preferred stock, but six months latef
n was obliged to suspend the dlVldend pay
ments. applying the Sl,25O,OOO thus saved 10
pavment of the September interest on the
Western Pacific first mortgage per cent
guaranteed bonds.
Has Been a Heavy Drain.
The Western Pacific, therefore, has been
g heavy drain on the Denver & Rio Grande
and there have from time TO time been
runoors of offers made to the Denver &
Rio Grande to purchase its Western connec-
tion which is also the Western outlet OF
the Could system, some of these offers eX-
tending to the Denver & Rio Grande itself.
The Missouri Pacific. which bought the
Denver & Rio Grande to secure its own line
as far west as Salt Lake City and which
subsequently constructed the Western Pa
cifc 10 extend that line TO the Pacific Coast
as part of the plans Of George j. Gould for
an ocean-t -to-oCean line, owns Sli,25oJo OF
the S3S,OOO,OOO commo stock of the Denver
q Rio Grande and $9,S05,O01 OF the s49,7I9SJO
preferred stock. Counting in the Rockefel-
Ter holdings. which are heavy, and the
Gould family holdings. the Missouri Pa
ci6c is commonly credited with holding
more than a majority of Denver stock.
To the eastward the Missouri Pacific has
its terrnini at st. Louis, Kansas City and
Omaha. at all of which points it connects
with the Wabash Railroad, which extends
TO Chicago and TO Detroit and Toledo But
the Wabash is now in course of reorgani-
zation, ard it is by no means assured that
upon the completion of that reorganization
# will continue TO be a Gould road. as for
many years it has been; and with that road
removed from the Gould system the Mis-
souri, Pacific would be without a close con-
nection with Chicago.
The Rock Island system has line down
into New Mexico which connects with the
FL Paso & Rock Island Railway. running
10 El Paso, where connection is made with
Island has traffic arrangement, under
which some of it's traffic is carried to San
Francisco. But this route is roundabout,
and more direct one would be secured by
an alliance with the Denver & Rio Grande
with which the Rock Island connects at
Denver. the Rio Grande route; Of course,
including the Western Pacific.
Would Benefit Missouri Pacific,
Similarly, the Burlington has its Pacific
outlet in a connection with the Northern
Pacific at Billings, Mont, but would have
a much more direct line through a traffic
alliance with the Denver & Rio Grande,
with which, like the Rock Island. 1t con-
meets at Denver These alliances, which
are expected TO benefit the Rock Island and
the Burlington, would also be Of benefit TO
the Missouri Pacific, since the two former
roads would provide connections for It into
Chicago which would more than compen-
safe IL for the possible loss Iby IL of the
Wabash as a connecting route.
The Burlington has been since 1901 con-
trolled by the Northern Pacific and the
Great Northern, which issued their joint
per cent bonds in exchange for pracu-
cally all Of it's stock. and which, through
its control have line of their own from
Minneapolis and st. Paul TO Chicago. For
three or four years It has been reported
that the Great Northern was planning 10
purchase the equity of the Northern Pacific
in the Burlington, thus becoming practi-
cally its sole owner; and these reports
were especially credited when the Great
Northern last May executed its record
making mortgage. securing an authorized
issue of $500 100000 first and refunding mort
gage bonds.
One of the obstacles in the way of ac-
ceptance OF these rumors has been the fact
that the Northern Pacific, II 1t should dis
pose Of it's interest in the Burlington, would
be left without a direct connection 10 Chi
cago. This connection was provided. how
ever only month or so ago, when it was
announced that the Northern Pacific and
tie Chicago e. Northwestern had made am
arrangement for the operation Of a through
passenger train between Chicago and the
Pacific Coast, over the two roads: 1t being
added that this arrangement was expected
eventually to result in mutual interchange
Of freight on a larger scale than hereto
fore.
Dsp.rss on Action of G. J. Gould.
The controlling interests in the Rock
Island are closely associated with those OF
the Northern Pacific and the Great North
ern. Judge William H. Moore being on the
boards Of the First National Bank, the
Delaware, Lackawanna e. Western and Le-
high Valley roads and the United States
Steel Corporation. and Daniel @. Reid being
a director of tho Steel Corporation and the
Lehigh Valley.