The Washington herald., 1914-02-01
STOCK MARKET
REMAINS firm
Rock Island Weak Spot on
Reports Of Reorganiza-
ton of Corporation.
BIG BOND TRANSACTIONS
January Best Month in Several Years
on Local 'Chanse-Bank Clearinss
Also Show $6S3. 900 Increase.

yesterday, closed nrm
This was in spite Of the fact that Rock
Island dropped from Is IA to 1s1-s
Steel closed at eS SIS. the same as FRI
day. Reading and American Can were
more and Ohio, Union Pacific, and
Canadian Pacific showed gains at the
close.
The drop in Rock Island was the fea-
ture of the market, and some surprise
was expressed that the rest Of the list
was able to hold up under the severe bear
raid TO which the stock was subjected.
Reports of proposed reorganization OF
the company were responsible. 1t was
stated that the two holding companies
must go. and the stock Of one, the Chi
cago, Rock Island and Pacific Railroad,
of Iowa. would have to be wiped out.
The plan would leave but one company
where now there are three, the sole
structure to remain being the Chicago,
Rock Island and Pacific Company, an
Illinois corporation. now generally
known as the operating company.
Securities Arc Necessary.
According to the story. in wiping out
the two holding companies-the Chicago,
Rock Island and Pacific of Iowa and the
Rock Island Company of New Jersey
two issues of securities must be pro-
vided for-the per cent bonds of the
Iowa corporation. commonly called the
collateral As. and the stocks of the New
Jersey company.
Just how the collateral As OF 002 will
be taken care of was not stated Obvi-
ously, that could be done through a de-
fault of interest, the next payment on
which is due May l. Should SO drastic
a step be taken it will not be because
the company has not funds wherewith
to make the payment, but as a formal
step in reorganization.
In the event of formal receivership, the
trustee might take charge of the railway
stock on behalf of the collateral bond
holders. Deposit of the bonds would then
be called for, and when 60 per cent OF
the holders thereof approved the railway
stock could be ordered sold en- bloc. as
provided in the indenture, be bought in
by bondholders, and exchanged for the
bonds. In that way the present per
cent bondholders would become stock
holders of Chicago, Rock Island and Pa
cifc Railway. the operating company.
The next step would be to make pro-
vision for holders of shares of the New
Jersey company. Tc do this it would be
necessary for new stockholders of the
operating company to authorize an in
crease in that company's stock. part of
the additional issue being exchanged for
the New Jersey company shares on a
scale down basis. A portion Cf the Rock
island companys share OF capitalization
would thus be obliterated. An assess
ment on this latter exchange would pro-
vide the operating company with funds
which it needs for betterments.
Local Stock Market.
Trading in bonds fell off on the Wash
ington Stock Exchange yesterday, being
limited to the transfer of 1900 WASH
ington Railway Is at so. 5000 Potomac
consolidated IS at 100. $500 Capital Trac-
ton 5 at 1oSk, and a 500 Washington
Gas 5 at l07.
The month of January, closing yester-
day. however. furnished one of the best
bond records in years. Reference to an
other column shows sales aggregating
S3lS.00o were made.
In the stock list yesterday Mergen-
thaler was the feature. Thirty-five shares
of the stock sold at 216k. Four shares of
District National Bank stock sold at 1881.
100 shares East Washington Savings Bank
at 16 Washington Gas sold at S4ia. Rail-
way and Electric preferred at 80, and
Capital Traction at l12i..
Old Dominion Report.
The annual report of the Washington
and Old Dominion Railway for the year
clos ing December 81 1913. was submitted
TO the Senate yesterday by Colin H. Liv-
ingston, vice presiden. OF the company.
The report confines itself largely to the
operating expenses and receipts in the
District of Columbia, and does not show
the business of the company in Virginia
A list of stockholders shows that John
r. Mclean hold 2.9S5 shares, the Great
Falls and Old Dominion Railroad owns
i, 900 shares. and fifteen shares are held
by other persons.
The capital stock of the company, au-
thorized. is given as 5000, 600; issued.
s, O.Oc0; paid in. s., 100000. Receipts
from operations in the District were
SO 3o2 So Expenditures for operating in
the District were s6632.S4. out the total
payments in the District for all causes
amounted to ss7.1OO.26. The report shows
that no dividends were paid during the
last year.
franklin Insurance Affairs.
Company, which announced on January
with the Boston Insurance Company, OF
Boston, have received letters from a
finance committee headed by James F.
Walker. announcing that John A. Kelly,
the company's president, has offered to
sell out his holdings in the company,
amounting to 20 per cent OF the stock or
buy in the remaining 30 per cent at the
rate of 80 a share. The last sale of
the stock IN 1872 was at 32.
The committee states that the book
value of the stock appears to be about
$3.50 to $2i per share, but that to arrive
at this value every asset must material
ize as il is carried. II is hardly probable
that this would be the outcome, the COM
mittee believes. The minoriy stockholders
are advised to sell out their holdings, and
in this connection the committee states:
THE cost to stockholders of liquidation
would be considerable; the assets would
have to be kept intact until every policy
ISSUED by the Franklin here and else
where has expired. Some policies were
issued for fve years; q great many for
three years. 80 that the funds of liqui-
dation would be tied dp for long period. |
TN the event Of q loss the Franklin
Insurance Company is still held liable, |
and II the companies in which the Frank
lin has reinsured fail or do not make good
on q loss, the Franklin assets would be
still further deprecated and the value |
Of the stock further reduced"
"Blle Law" Unconstitutional.
The Michigan "blue sky Law has been
declared unconstitutional in a decision |
handed down by the Federal court sit
ting at Detroit.
The law became effective August Is.