The Detroit times., 1914-06-11
Claimed He Acted as Agent For
J. p. Morgan in Unloading {.
II. & ID. Elephant
SYSTEM BANKRUPTED
BY FINANCIAL JUGGLING
War Between Money Kings
Blamed For WreckIng of
Michigan Railway
BIZ gibson GARDNER.

I
WASHINGTON. June ll-Further
inquiry into j. l.. Morgans railway
financing has been scheduled by the
interstate commerce commission as
al incident 10 It's hearings in the mat
ter OF the freight rate increase. The
part taken by George w Perkins
in the Cincinnati, Hamilton q Dayton
Pere Marquette deal is 10 engage the
attention OF sir. Folk. counsel for the
commission
Perkins. IL is said, was the active
agent for Morgan IN unloading 40
millions OF yalueless securities on the
innocent stockholders OF the Bati-
more & Ohio system. The story, as
so far brought TO light, -Was- about as
follows A crowd OF enterprising
Boston fnanciers figured out way 10
hold up Morgan-or thought they had.
They had been interested in the cop
per properties In northern Michigan
and their plan. briefly. was 10 consoli-
date the various copper railroads into
the Pere Marquette system. then 70
consolidate the Pere Marquette with
the c., r. a. d., and this with the
Cincinnati & Louisville r. r. after
which they were 10 get an outlet
through the c. & o. or through Ken
lucky and southwest 20 the gulf for
competing line OF road menacing
the monopoly OF Morgan's railroads.
They did the usual trick OF raising
money by issuing securities 10 buy
the new lines. until the Pere Mar
quette had become bankrupt and the
c.. r. & D. had taken on a load OF
debt amounting 10 s40000,000 more
than the original bonded Indebted
ness.
Morgan saw the point and had Per
kins buy the staggering and water
logged Pere Marquette and later the
c.. n. e D. The Pere Marquette was
"reorganized" by Perkins with $4,000
600 OF capital raised by special assess
ment, but this was soon used up and
In 1910 the road went into the hands
OF a receiver Morgan had meantime
acquired control OF the c., Fl. & d.
and had become owner OF sT.400.00O
worth OF common stock OF this road.
The c.. II. & d. had issued all kinds
OF obligations to carry the Pere Mar.
ouette and subsidiary lines, All the
roads had been scrimped on mainte-
nance in order 70 pay interest on
notes. bonds and unearned dividends
on preferred stock. The properties
were bankrupt, but Morgan was IN.
willing 10 have a receiver appointed
because a recelvership would have
wiped out the common stock OF which
be held upward OF seven millions
What hnanciers do when they do not
want 10 take a loss is Illustrated by
what Morgan had Perkins do in this
case. He looked around for one OF
his other corporations to take over
this load OF Indebtedness. First he
tried 10 unload II on the Erie, while
Hartman was in China. but Hartman
got back in time. though III and at
the point OF death. 10 prevent this,
and the Erie. which had taken over
the stock, actually forced Morgan to
take Il back. But Hartman was a
very sick man and Perkins went on
with the Job and soon unloaded the
whole burden on the Baltimore &
Ohio The latter road has Issued
short-time notes and dug up funds
wherever possible 10 pay the indebt'
edness on this Morgan property"
But the peculiar thing about the
affair is that there is nothing In the
annual report OF the B. & o. 10 indi
cate that they are the owners OF this
valuable property or TO throw any
light on the fact that they have In
Cured All kinds OF liabilities in the
shape OF short-term notes 10 pay Mr..
Morgan's losses in the c., Fl. & D.
Pere Marquette deal, Just why Is one
Of those secrets known TO high A.
nance and the makers OF annual rail-
way reports 10 stockholders. Nor
ran ia dead. but George W Perkins
s alive and as these happenings were
recent. going hack only
% 1901. Mr.. Perkins will be asked
o Kurdish up his memory and tell the
Interstate commerce commission all
,hout ~