New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-02-11
ROCK ISLAND PLAN
READY NEXT WEEK
Stock of N. J. Corporation
Will Be Assessed Between
S. and SIS a Share.

The special committee OF Rock Island
directors is making such rapid progress
on a plan for the dissolution Of the two
holding companies. said member OF 'he
committee yesterday. that the security
holders will be notified OF It's proposals
before the middle OF next week. WINE
the plan is still incomplete, the tentative
draft. he said provides for an assess
ment Of between g. and SIS share on the
preferred and common stocks OF the Ne"
Jersey corporation-the Rock Island Com
pany-and in return the shareholders may
receive the Chicago. Rock Island a Pa
cifc Railway stock. The latter Is no"
known as the operating company
Whether the holders OF the collateral
trust bonds Of the Chicago. Rock Island
e. Pacific Railroad will assent 10 tnis plan
Is still problematcal. as IL has been I'M
possible TO learn by whom majority Is
held Inducements will he offered, how
ever. which IL is believed may make the
plan sufficiently attractive TO obtain their
consent
While new funds for the operating COM
pany are to be raised by ali assessment
on the New Jersey companys STOCK
director stated on Monday that this
would not involve receivership LOT the
Intermediary corporation. the chicago
Rock Island & Pacific Railroad Company.
IL has been thought IN some quarters
that the money needed by the railway
company would be raised by emitting
dividends. which would mean default on
/ g,,+o 80 hA
trust bonds due May !.
When the two holding companies were
formed in 1902 s75,COoo10 Of the railway
companys stock was exchanged Tor
| similar amount Of the railroad company
bonds. sos 10000 Of Rock Island Company
common and 100000 OF the preferred
The bonds had no voting rights and the
voting privilege was overshadowed oy
the rights of the preferred, which was 70
elect a majority of the directors.
In the company which existed before
the reorganization 81 per cent or the
81. 900. 900 stock sufficed for control. Later
1 81 per cent OF the preferred stock OF the
Rock Island Company named majority
| of the directors. The directors OF the
New Jersey corporation were permitted
| at first 10 buy and sell out OF WORKING
capital the shares Of their own company
| but because of the criticism aroused this
J right was soon given up.
In so far as the plan Of the committee
Of directors has been made public wall
| Street believes that the perfected plan
| will try to retrace the steps taken In the
, formation of the New Jersey and Iowa
corporations. The old railway company
stock was s75,coOOoO; the new railroad
company issued stock 10 the amount OF
1925 10000. in addition to the s75,Oo.co coll
lateral trust per cent bonds. The Rock
Island Company issued SOS 600 common
and s54. 10000 preferred stock. and the ag-
gregate capitalization was s425,00o,0O, In
stead OF the original $4,000 600. but the
only increase in fixed charges was the 4
per cent on the collateral trust bonds
AS the members CT the reorganization
committee have arranged TO be out Of the
city for the remainder Of the week. no
meetings will be held until early next
week. when an announcement is expected.