Bisbee daily review., 1914-03-01
Bsbee Atmosphere Highly Favorable to Inuenue Genius

| 100000 the company was able to show net earnings of only sl6,9O0,OOO. The ratio Of operating expenses to gross in 1907 was 6s,i4c5 as compared with 73.57E, in 1913.
 The fixed charges of the operating company are well protected by earn. ings at present. and in 1907 were earned almost twice over. Likewise fin | 1913 the road earned enough to pay 5f, on It's stock which takes care of the interest on the collateral trust 1 is, and in the first six months of the current period the balance of earn. ings after charges was equivalent to about 2RH on the S75,0O0. 900 stock or at the rate Of 5Gs for the year. | The margin of earnings over charges and applicable to the stock. however. Is growing smaller and meanwhile the property needs a larger portion of , gross to be expended on upkeep. In. cidentally the position of the pre-. ferred stock of the Rock Island com. pany at present seems to rest for value entirely on its voting power as it has ceased to have any earn ing power whatever. In 1907 this pre-. feired stock earned about 9.57@s.
 The Rock Island road serves splendid traffic producing territory and at the present time Is fairly we'll equipped and able to give fair ser. vice. In order. however, that 1t may be able to compete satisfactorily with several roads operating in the same general territory, the expenditure of a considerable amount Of money is | necessary. This must. be spent on straightening of the lines and in the reduction of grades. once this is done there Is no question that the econo. mics brought about will bring back the proper ratio between gross and net and the road should be able to show an average of over 6ct on it's present stock.
 Security holders were led to be- lieye some time ago that Phelps | Dodge interests had taken over the reins in Rock Island affairs and that the needed money was in sight Now comes the announcement of Phelps. Dodge & Co.,, to their stock holders as follows:
 As numerous articles have recent. ly appeared in the daily papers, con. meeting Phelps, Dodge X Co. with the Rock Island Railroad company and intimating that Phelps, Dodge & Cn had mt only haan iorga huvar, Al Rock Island stocks, but had obtained control of the property. We there fcre consider it only right and prop CT to advise our stockholders off. eially that Phelps, Dodge & Go. has never had a single share of Rock Isl. and stock, or invested one dollar of money in any of these securities.
 'The Fl Paso X Southwestern in which some of our stockholders are interested. purchased some years ago small minority interest in Rock Island preferred stock. and has never increased or diminished it's holdings since that date
 In the face of this statement, those who had hoped that these interests were to inaugurate changes of man. agement, finances and policy, must be disappointed.
 The fact remains, however, that the leading interests of Rock Island are trying to evolve an equitable plan by which the Rock Island system can be pared down to the old railway company and this seems a step in the right direction toward restoring this road to the rightfuI and former posi- ton in the railroad world.
 The position of the collateral trust As, as outlined above, Is such that they must be given all due consider ation in any readjustment. We would not advise their sale at present prices.
 The final plan may provide for ex. change of the collateral as for the Railway company stock and issue of additional stock for exchange of Rock Island company stock on pay ment Of an assessment by the latter.
 If this were done and the assess ment made, say $l0, sum equal to $15 1000 900 would be raised to be put into improvements to the property.
 The position of the collateral As is such that 1t is pretty sure they will be given some inducement to con- sent to such a readjustment, possi- bly by making the stock exchanged for these bonds rank ahead of that given for the holding company