New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-18
CLOVER LEAF MAY
DEFAULT INTEREST
Would Affect Series A
and B Bonds Given to
Rock Island.

The management of the Toledo, St.
Louis & Western Railroad. according
70 statement made yesterday by one
OF the directors, is planning TO default
the interest, due August |, on its Series
A and Series bonds. which were given
TO the Chicago. Rock Island e. Pacific
Railway Company in August, 1907, in
exchange for a majority interest in the
stock of the Chicago & Alton Railroad.
The amount of Alton stock which the
Glover Leaf got in the transaction was
S6,4S0,00O preferred and Sl4,420,000
common
OF the S6,4sO,0OO Series A bonds,
which were exchanged dollar for dollar
for Alton stock, the Rock Island still
owns 100000. while there has been no
change IN its original ownership of the
S5,047 900 Series b bonds, which were
exchanged for Alton common stock on
basis of S35 in bonds for each 500
in stock. A default on these bonds
will mean that the Rock Island, which
is having troubles of its own in efforts
10 scale down its enormous capitaliza-
: ton, will lose interest amounting to
/ $2l7 $50 annually.
Interests of the Clover Leaf say they
do not expect a receivership for the
property, largely on the assumption
/ that, in case Of default of the August
interest, ninety days must elapse be-
fore any bondholder can bring suit.
This will afford sufficient time, II was
said. for the completion of negotiations
/ already in progress with the largest
bondholders whereby they will agree to
take Alton stock, which is pledged as
collateral behind the bonds.
While control of the Chicago e. Alton
: is held in the name of the Toledo, ST.
Louis & Western, the property is really
dominated by the Union Pacific, which
owns SlO.3i3. 900 Of the preferred stock.
Several years ago the Hartman line
came to the Glover Leafs assistance
in making up the deficit in its hxed
charges, and has ever since stood oy
the property. The Clover Lear mas
about ESQ miles of road. its main line
running from Toledo to East ST. Louis.
The late Edwin Hawley acquired for
the Clover Leaf the controlling inter-
est in the Chicago e. Alton, which he
had previously purchased from f. II.
Hartman and his associates IN the
omen market and sold TO the Rock
/ Island. At the time OF purchase the
Rock Island management was confident
that the ACQUISITION Of the Alton would
he a benefit. but the mistake in Judg-
ment was soon found out and the d.
rectors we're quite willing TO let Mr..
Hawley buy it back for the Clover
Leaf. a.,
. Glover Leafs investment in the Alton
is now costing il $4,000 year, and
"a there ia no return on the stock the
directors are anxious 10 "paS along
the buck" The earnings Of the Glover
Leaf have been adversely affected by
crop conditions and BY tie-up OF the
coal industry in the Central West In
the fiscal year ended June 30 surplus
Of between $4,000 and 100000 over
and above interest charges, including
the series A and B bonds. was shown,
but if deductions for interest on equip
ment trust certificates had been, IN
cluded this balance would have been
wiped out.
General Thomas II. Hubbard Is un;
derstood TO be the largest indlylduai
holder Of Clover Leaf stock. Edwin
Uawlev was also large holder at one
time and was very active in the man
apement Of the property. In addition
/ 10 General Hubbard the directors are
r. P. Shonts, f. J. Berwind, charles
! II. Tweed. II. s. Black, F. ?. FRASER
Frank H. Davis. II. f. Huntington, W.
/. Ross. f. Tilden, and James stuart
2