The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-04-21

hardship and ioes to thousands Of in
nocent and helpless investors.
THE company has never In its his
tory been less In need of a receivership
than at this time The physical condl-
ton or the property Is now universally
admitted 20 be in better shape than ever
before. The earnings OF the company.
according to the last statements filed
with the Interstate Commerce tominiS-
sion are far in excess of last year. and
larger than ever before This too In
face of tho business depression through
which we have passed the last year.
Now. with business expansion and gem
cral prosperity. on the threshold of which
this country Is just entering, everybody
admits that the railroad earnings will
be greatly increased How In the face
Of all this. the management could con-
sent to "A recelvership Is beyond my com
prehension. and such action on their
part is entirely opposed to my feeling In
the matter"
Mr. Amster's next statements aroused
considerable interest and surprise In the
financial district, for IT had been gener-
ally believed that the Rock Island had
reached the end OF it's credit and that II
was t-sctically impossible Ger It to bor-
row money. Mr.. Amster said that he
personally had arranged for the raising
of $4,000. 600 to meet the property's most
pressing needs. lie said:
~ have practically arranged for two
year s6.000.000 loan. secured by s11,-
400. 900 Of the company's refunding and
other good negotiable bonds. This would
have paid Off this 100000 Central
Trust loan. the sl.i?i,000 Choctaw Sc
rial notes coming due May and the
SI.600.0Oo Bankers Trust Company loan
coming due in September. and would
haN" put tho company beyond any pos
sibility OF straining any Of its securities.
hut this receivershp has put a wet
blanket temporarily over this negotiation.
Look. for Great Opposition.
~ am positive that the security hold
ors will resent this cooked up receiver.
ship and great opposition will he raised.
! myself am going TO use every effort
to save the security holders interests
and especially those of the minority
whom ! am pledged TO guard and ] In
tend 10 do So
Mr.. Amster also sent a wireless to
A. +. Won Hall OF the banking house
OF H. Oyens of Amsterdam. Holland.
who had been in this country looking
after the interests Of the Dutch inves-
tors in Rock Island and who sailed yes
terday on the Ryndam fifteen minutes
before the news of the recelvcrship be-
came known in Wall Street, His wire-
less to Mr. Won Hail was as follows:
Rock Island passed into recelvership
noon to-day. Outrageous, unlawful
unnecessary. Minority stockholders or
ganizlng contest. Can We count on your
support Your share not over 81 600
signed Amster. Biltmore" MIR. Won Hall
replied by wireless that he depored the
receivership and hoped that 1t could be
avoided.
Mr.. Amster also charged that the re-
ownership smacked OF gigantic stock
johbing scheme and alleged that tele-
grams relative To Rock Island had
passed between "a stock Exchange Arm
and two Boston brokerage houses.
Interests connected with the Rock
Island said that they believed applica-
ton would he made shortly to issAc be-
tween s4.50O.O00 and 5000. 900 receiv-
ers' certificates TO meet current indebted
ness. They added that the management
Of the property had made mistake In
not allowing the receivership to come
about on April instead of securing q
loan on the notes Endorsed by five Of :hc
directors. II was estimated that the
property would need about $50. 900. 900
for its rehabilitation and that half Of
remain would have to he raised
through tho sale OF new securities, prob
ably preferred stock. The real reason
for the receiyership. they said. lay In
The fact that the credit of the Rock
Island was gone and that a thorough
financial overhauling and a drastic re-
organization were necessary to put the
property once more on its feet.
The Rock Island problem has long
been one of the bad spots In the stock
market. Ever since the taking over OF
the stock OF the railway company at
something over 5000 per share by the
Chicago. Rock Island and Pacific Rail
road Company and the formation OF the
Rock Island Company, both In 1902. the
fortunes of the railway company. which
was the operating company, have been
on the wane. The railway, which Is
capitalized at s74.S17.200. stopped pay
ing dividends I'm May. 1914. and the
interest on the collateral trust bonds OF
the railroad company was defaulted. as
the dividends of the operating company
were the only source OF revenue 10 fur
nish this interest.
Rock Island stock. which had been
Inactive for several weeks, recently
leaped into the llmeliGht, advancing from
around 10 to 20 and later bounding up
ward to 30 Yesterday. when the re-
ownership was first rumored. the food of
selling orders was 100 great for the mar
ket and the price broke sensationally,
selling down from 80 to AS low as Fl I,
and later closing AZ 2Ils, with loss of
ga points for the day. The per cent.
dcbenture bonds broke 10 points to So,
after selling on Monday AT %. The re-
funding As sold down 20 sc, as COM
pared with closing OF 20 on tho day
previous The rest OF the market, al
though temporarily unsettled by the
, news OF the receivership, advanced
sharply toward the end OF the session
and closed firm.