The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-02-13
CONSERVATION Among Persons
in All Countries.
D0UBLE-DECKED HOLDING FIRM
Financial Ornament Has Not
Been q Success.
Other Items Of Interest in the
Traffic World.

The interest surrounding the troubles
of the Rock Island still holds sway in
the financial columns of the east.
THE Rock Island incident Is simply
q step forward in the rehabilitation OF
founda tions, cutting out the excrescent
and unnecessary growths. OF period
when the country was expanding rap
idly. and the attempt was widely mace
to accumulate capital on long distance
prospects or imitation Of prospects, is
the way the Bache Review opens hos
tilities There never was any other
excuse for this double decked holding
company and the tendency or puDnc
financial sentiment Is that the IanclIui
and useless financial ornamentation
which at one time was considered oe-
sirable and elected ignorant admiration
shall be cut away and that stable ana
sound financial architecture snail De
substituted.
Much dust and apparent wastage Is
the accompaniment of these operations
but the final results will be benenciai-
The problem of upbuilding is even more
difficult than was that of creating
these pulpy and useless superstruct-
ures, and means probably radical ac-
ton. The utmost consideration should
he given to the interest of the public
stockholders of the Rock Island holding
company The fact that the preferred
shares a few years ago pald ulVloehos
drew many innocent investors into buy-
these
in the common stock of course did SO
on a speculative basis, but the hope Of
dividends even here was held out by
reported earnings. The common shares
have no vote. this being connneo 10
the preferred class of stock, so that the
latter from this point of view, should
be worth much more than the COM
mon"
The New York Evening Post says:
This weeks official announcement
ho6 formed
work out a 'readjustment of the Sc
curities of the Rock Island holding
companies caused CONSERVATION among
holders of some 500, 900 900 bonds and
are widely scattered, both in this coun-
try and abroad. and on all sides the
question was heard: Where do
stand" Up to the close of the week, no
one in authority had thrown any light
on the Rock Island situation.
1T must be admitted that the credit
of the railway company would be i'm
proved by amputating the parasite
Iowa and New Jersey holding COM
panies Those two companies. however.
were created by interests still promi-
nently identified with the management
of the system, for the purpose of in
ducing shareholders of the old railway
to exchange their stock in good faith
for the per cent. collateral trust
bonds of the Iowa company. Those
bonds which are now widely scattered,
hold the key to the Rock Island situa-
ton. Any readjustment which does not
recognize that fact is likely to be
laughed out of court
Some years after 1902. when 1t be-
came apparent that the Iowa and New
Jersey holding companies were proving
a drawback for the railway company,
the lawyer who devised the 1902 re-
adjustment was appealed to by the
holders Of the preferred stock Of the
Rock Island company Of New Jersey.
His unqualified decision. however. was
that If the holding companies were
wiped out. control could not be main
tanned without first buying up 81 per
cent Of the widely scattered railroad
collateral trust As. The recent stock
market action Of those securities does
not indicate accumulation"