Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1914-02-03
RAILROADS. PLAN
or ORGANIZATION
Lawyers for Rock Island Work
ing Out Details to Be Sub
mitted to Governm emit.

Chicago, Ill, Feb. 3.-Reorganiza
ton of the system of railroads origi
nally known as the Chicago. Rock Is
land & Pacific lines, including the
abolition of it's two holding companies
known as the Rock Island company
of New York, and the Chicago, Rock
Island & Pacific Railroad company OF
| Iowa, is likely to be announced in The
near future.
! Lawyers representing the system
are at work on the details, which
will probably be submitted for ratifica-
ton to the interstate commerce COM
mission. Rock Island stocks were
weak on the exchange yesterday as a
result
When these plans are carried out
they will leave only one company
where three now exist, and the man.
agement and operation Of the. system
viii be under control of the Chicago,
Rock Island & Pacific Railroad COM
psuy, an Illinois corporation.
1t has been known for some time
that the administration at Washing
ton did not look with favor upon the
Rock Island organization. The holding
BILE to the department of justice. In
abolishing them it will be necessary
to provide for other issues of securi-
ties in place of the per cent col
lateral bonds of the Iowa CORPORATION
and the stocks issued by the New Jer-
sey corporation. 1t was thought pos
sible in financial circles that the move
might necessitate formal application
for receivership, in which event the re-
ceivers or trustees would take charge
of the railway company's stock for
the collateral bondholders.
The Rock Island company of New
Jersey and the Chicago, Rock Island
& Pacific Railroad company of Iowa
are controlled by the Moore-Reid
crowd. Both were organized in 1902
The latter company was organized for
the purpose, among other things, of ac-
curing the ownership or the control
OF the Chicago, Rock Island & Pacific
Railway company tEe old Illinois
corporation). The railroad (new) COM
pany authorized $4,000, 900 4 per cent
collateral bonds, ard the Rock Island
OF New Jersey, which own the capital
stock of the railway company. S54.-
100000 preferred and S96, 5000. 600 COM
mon stock. The Illinois corporatIn
had outstanding $T5,O00.OO0 common |
stock. nearly all of which was exchang-
ed at par for the Chicago, Rock Island !
q Pacific Railroad company new 4 per
cent bonds, par in Rock Island COM
pany new common and at 40 in the
ROCK Island company new preferred. |
The Rock Island company preferred is .
entitled to 4 per cent noncumulative 1
dividends for the first seven years. D
per cent noncumulative for the next |
seven years and G per cent noncumula-
tive thereafter
The origirators of the scheme Great
ed some furore in financial circles
when they vested sole voting power :
to elect directors in the $4,000. 900 pre-
feTred stock, the greater part of which
they held. The stock and bonds were
sold to the investing public
In the year of organization, the Rock
Island company purchased all of the
capital stock of the Choctaw. Oklaho-
ma ( Gulf railroad and nearly all OF
the remaining stock Of the Burlington,
Cedar Rapids & Northern and Rock
island & Peoria. The latter two roads
we're decided in 1902, the first named
being leased for 999 years. In June.
1909, the Chicago. Rock Island & Pa
sihc Railroad company acquired $685.
100000 common stock of the St Louis
( San Francisco railroad (the Frisco).
giving for each share 60 in common
stock of the Rock Island company and :