Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1915-07-29
ROCK ISLAND
CO. IN HANDS
OF RECEIVER
Holding Corporation for Rock
Island Railroad Put in Care
s of chauncey G. Parker.
ACTION TAKEN HERE
IN cHANcERY COURT
Sequel to Alleged GIaring
Manipulations of Railroad
Property in West.

FF
On the petition of John j. Quinlan,
its president Vice Chancellor Emery
today appointed Chauncey G. Parker
receiver for the Rock Island Company,
holding company for the Chicago,
Rock Island and Pacific Railroad
Company. a corporation of Iowa.
The Rock Island Company, with a.
capital stock of 10000, 900, all of
Hhioh has been issued, is declared to
oe tnsolvent. S140, 1886, ,652.50 of this is
actually In the hands of stockholders.
The company has paid dividends Of
l per cent. quarterly on Its preferred
stock, which amounts to $54,00O,0O0 of
the whole issue from 1903 to Novem-
Der. 1905, but has paid no dividends
since then.
& The order was signed at the re-
quest of Robert H. McCarter, repre-
senting President Quinlan. and con-
sented to by Alfred F. Skinner, Of
Pitney, Hardin & Skinner, solicitors
for other parties in interest.
One Of the properties of the Chi
cago, Rock Island and Pacific rail-
road was the Chicago, Rock Island
and Pacific Railway Company, cor
poration Of Illinois and Iowa. The
Iowa railroad corporation owned $71,-
$50, 500 of the stock of the Illinois and
Iowa Railway Company, of which
there was but $74,877 200 outstanding
The ownership of this stock was sub
ject to mortgage which was fore
closed
Then a deficiency Judgment was
entered again the Iowa Railroad
Company, WI h amounts to 6S.000,-
900. This wa in favor of the Gen.
trail Trust Company of New York,
and a receiver has been appointed
by the United States District Court
for the Southern District of New
York under this deficiency judgment.
The petition of Mr.. Quinlan sets
forth that the appointment of re-
ceivers for these properties and the
cessation of dividends upon it's as
sets has deprived the company of all
of its earnings at present, has made
the assets of questionable value and
has taken away all of the company's
resources with which it can continue
to do business.
One of Several.
The company that went into the
hands of Mr.. Parker as receiver to-
day was one of a number organized
to manipulate the finances of the
Chicago. Rock Island and Pacific
Railway Company of Illinois and
Iowa, which is known as the "physi-
caT' railroad because it was the only
one of four corporations actually pos
sessing a railroad-that Is, 1t did ac-
tual1y own the railroad property until
the formation of the other corpora
tions. The first of these was the
TCloT.6 n Of Nnxu IaFcaV.
Then came the Iowa company,
The New Jersey company ex-
changed its shares of stock with the
Iowa company, and the Iowa COM
pany then went to the shareholders
of the Illinois and Iowa physical
company and offered bonds and seven
shares of the New Jersey company's
stock for their holdings; that is. the
stockholders in the physical railroad
were to receive one bond, paying four
per cent a year, of the Iowa COM
pany, and seven shares of the stock
of the New Jersey company for each
share of stock they held in the physi-
cal railroad These shares of stock in
the physical railroad were all subject
70 a mortgage, which was afterward
foreclosed.
These man.pulations were all
Urought by the Reid-Moore interests,
which consisted of Daniel G.. Reid
and Edward S. Moore. Later another
company was evolved. It's operations
were disclosed in the first mortgage
foreclosure. This new corporation
was known as <the Rock Island Inn
provement Coal Pany. Its officers and
directors wed pade up of clerks in
the raiIu0f \pany, and the real
49, e not appeared.
uotive.
il Improvement
Company obtained Possession of the
locomotives and rolling stock Of the
s'physicap railroad company, and
then sold and leased the same roll
ing stock to the Iowa company "at
cost" 1t develoued that the amounts
stated as cost amounted to mil
lion and half dollars more than the
Improvement" company paid for 1t:
The improvement company also sold
large amounts of supplies to the COM
pany.
The appointment of the receiver for
the Rock Island Company of New
Jersey and it's certain dissolution
places the last of the corporations in
che insolvent list.