New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-04-21
Company Admits Inability
TO Meet Short Term
Notes Due May |.
PRES. NUDGE AND J. M.
DICKINSON NAMED
Government Restrictions Blamed
for Failure-Property in
Good Condition.

Chicago. April 20.-The Chicago
Rock Island & Pacific Railway Company
was placed in the hands Of receivers
in Judge Carpenters branch OF 'n'
United States District Court here TO-
day.
The company admitted its inability
"a meet more than 100000 in short
term notes and other obligations due
before May 1. and the court appointed
II. L. Nudge, president of the com
nanv. and Jacob NJ. Dickinson, ex-Sec-
rotary Of War. receivers.
Application for the receivership was
made by the American Steel Foundries
COMPANY. which has a claim of about
$4,000 against the defendant. A. C.
Ridgeway. ice-president of the com
panv. and W. F. Dickinson, its general
attorney, appeared in court.
According TO Mr.. Nudge, the recelV-
ers will depend on the present eXcelle
physical condition of the road and the
prosperity which they think is return
ing TO rehabilitate the company while
.he court protects it from creditors.
"Receivership was the only alterna-
tive we had in the circumstances, sald
President Nudge in statement ISSUED
tonight. Under il. we will probably
spend more money on the road than we
did i'm the previous six months. We
have an undue proportion of cars IN
bad order, q fact which assisted IN
bringing on the crisis With increas-
ing general traffic in sight we VIII
spend more on equipment.
"The receivership, | believe, Will be
OF short duration If the road is en-
abled TO obtain its share of prosperity.
The Rock Island is the largest railroad
ever placed in the hands of receivers
and il is in better physical condition
than any road ever was which was
placed in a similar predicament.
"The real underlying trouble rs the
same as with all other roads, and they
viii all IN time find themselves IN our
situation. That trouble is the govern
ment's attitude toward railroads; we
must have higher rates and lower
costs Happily, however. there are
signs that the public attitude is chang
ing and the railroads may hope for
fewer handicaps.
"Despitp the repressive govern
mental measures Of the last ten years
the Rock Island has done little bet
ter than hold its own IN gross earn
ings. but its ratio of net TO gross earn
inps shrank more than others because
i'm its early days the road did not spend
enough money upon itself, and since l
have been president money for that
pprpose has not been available because
our financial organization prevented
Tie selling of securities. Our bonded
indebtedness might have been greater
with benefit to the road if the money
had been put into the property. We
arc overcapitalized rather than under
capitalized
Nincty-fve per cent of the stock Of
tho company is held by the Chicago
Rock Island & Pacific Railroad Com
many. already in the hands Of re-
ccivcr. The entire stock of the latter
COMPANY in turn is held by the Rock
island Company, which, while IT has
NOT confessed Insolvency, is said 70
have no assets Of value. they having
practically disappeared with the failure
Of the railroad company. Both OF
these corporations we're holding com
panies. whose prosperity depended on
what the railroad company, which was
the operating concern, could earn
above its own dividend and interest re-
quirements.