New-York tribune., 1917-06-12
Court Winds Up
Receivership for
The Rock Island
Road Has Plenty of Money
to Pay Debts, Thanks
to Dickinson

Chicago, June Ill He lcSc4'Oi'" =
for the Chicago Rock Island e. Pacific
Railway Company, one of the great
systems of the country, was terminated
bv order of Judge Carpenter in the
United States District Court here to-
day.
Judge Carpenter announced that he
would discharge Jacob NJ. Dickinson,
former Secretary of War. who had been
receiver. and stated that the reorgani-
zation plans were acceptable to the
court.
The decree dismissing the receiver
was signed this afternoon. In doing
so Judge Carpenter said:
"The able administration OF this
property By Judge Dickinson as re-
ceiver has made this extraordinary
proceeding possible. This is reor-
ganizetion without a sale, the property
returning to the original company, and
in this the proceeding is historical in
the annals Of receiverships. The Rock
Island will pay its debts. and has
plenty of money with which to do So"
A meeting of stockholders will be
held here June 81 and another. as
legally required. at Davenport, Iowa,
June %. 3.
The reorganization plan was submit
ted to Judge Carpenter and details were
made public three months ago. New
capital and new company, from which
the Reid-Moore control is. said TO have
been eliminated, are cardinal points
of the reorganization.
New Stock To BE Issued
The reorganization plan calls for the
issuance of s65,0OO,0OO new stock in
two classes of preferred Banks and
other creditors have agreed TO take,
par for par. stock for their debts TO
the extent of approximately S3OO0O,-
900. Other problems will be taken care
OF by sale Of the remaining stock.
The financial collapse of the Rock
Island has repeatedly. in Congress, in
courts and before Investigating bodies,
been cited as one of the most fagrant
cases of financial buccaneerlng in the
histolv o. the country.
Nathan Amster. OF Boston, previously
unknown TO railroadng and railroad
finance. took the lead in attacking the
Reid-Moore syndicate The receiver
ship found him in control of the great
majority of the proxies of the roads
stockholders.
Among many Investigations that by
the Interstate Commerce Commission
was the most important. In its finding
the commission remarked that stock OF
the system in the course of the Reid
Moore control dropped from 5000 a
share TO 500; that actual mismanage-
ment, aside from stock juggling, had
cost the road s20,000,000 actual cash.
and that of this more than Sl,000.000
was paid as gratuities TO officials of the
road, in addition 20 exorbitant sal
aries; that capitalization of the road
grew from S20,000,0 900 70 00,000,000;
that the company was "bled to death"
through two holding companies and that
directors of the road msrepresented
assets 70 stockholders. IL was further
alleged that the syndicate put the road
into a recevership TO serve its own
ends.
Amster Prominent
Amster was prominent throughout
the application for a receiver and
eventually triumphed in obtaining such
court orders as would in his opinion
give control of the stock 10 the stock
holders.
Mr.. Amster was in court to-day. He
explained that s55 100000 of the stock
is to be issued at once, S30,000.000
bearing Z per cent interest and S25.-
100000 at per cent. The remaining
100000 may be issued at either rate
if needed, in the discretion Of the
stockholders. The common stock, which
hitherto has been the only issue, re-
mains at s75.000.0Oo.
Under provisions Of the plan Sl7,-
10000 in receivers certificates will be
taken up for cash at once. On July
gold bonds amounting TO sl2,500,Q00
will be paid off in cash.
The road is now earning twice the
amount OF its fixed charges, which
amount to sl0,000,O00 a year, Mr..
Amster said.
Jacob NJ. Dickinson told how he
found what had been a magnificent
property all but wasted. Rails were
worn out and the roadbed in many
places growing weeds: rolling stock
was crippled. and the stock had been
so manipulated and its resources so
MIXED that the stock of the corpora
ton had scarcely any value. II was
quotable around l3.
Under the receivership repairs were
made, new rolling stock was purchased,