CHAPTER XXXV THE CHICAGO AND ALTON. For many years past this company has been conspicuous as financially the soundest to be found in the entire West, if not in the whole country. Its principal characteristics are unsurpassed excellence of property, able, conservative and independent management, and good and regular returns upon a moderate capital. In February, 1847, the present main line was chartered as the Chicago and Mississippi Railway, but the company owning the property was reorganised ten years later as the Chicago, Alton and St. Louis RR. Co., and again in 1861, after foreclosure. In 1862 it acquired the St. Louis, Alton and Chicago RR.; in 1868 it leased the St. Louis, Jacksonville, and Chicago RR., with which it was consolidated in 1884; and in 1879 it built the Coal City branch. The present system comprises 849 miles of railroad, as follows: Main line from Joliet to East St. Louis Coal City branch, Joliet to Coal City Dwight to Washington Louisiana 243.5 miles. 24.5 All these lines are in very superior condition, and constitute direct routes between Chicago and St. Louis, Chicago and Kansas City and St. Louis and Kansas City, and on all both local and through traffic has been developed in a remarkable degree. Owing to the excellence of its service and its very moderate capitalisation the company has been in a position to pay unexcelled returns upon its capital under conditions both peculiar and trying. The Alton is situated in the focus of competition, and in addition to this it is frequently at sixes and sevens with all its rivals because it sternly refuses to enter into any mutual arrangement or to become a member of any association whatsoever. Numerous rate wars have been the result of this independent attitude, and the system has even been boycotted by all its competitors. But the Alton did not mind any retaliation, knowing full well that no other system could do it the slightest harm. It has the best road between Chicago, St. Louis, and Kansas City, a circumstance which naturally attracts patronage, and enables it to work profitably at rates that must be ruinous to its rivals; it has a very small capital, and can even with low rates still pay its usual annual dividend of eight per cent., and this enables the Alton to defy all other roads, a fact which President Blackstone and his lieutenants never hesitate to impress upon the enemy. They rule the property in a manner open to no criticism, and for the rest do not in the least care about the opinion or attitude of their competitors. They like to maintain rates, but fail to see that gentlemen's and other agreements are essential to attain that end; they will never reduce charges unless it is necessary, but, knowing that their road can work at low rates longer than any other, they fear no 'cut,' and as soon as they learn that any of their rivals has secretly reduced his rates they follow suit openly. It need hardly be said that the other roads do not like such independence, but since the Alton is the strongest they have to accept the situation as it is. The capital of the Alton consists chiefly of shares, this company having for years past followed the English system of capitalisation, and endeavoured to keep its funded debt at the lowest possible level. The bonded debt amounts to not more than $13,000,000, and in January, 1893, $2,400,000 7 p.c. bonds will fall due, for which it is proposed to issue $2,500,000 stock; none of the other bonds having to run longer than 1900, there will in all probability be further conversions of the same kind. The capitalisation of the company is shown on the subjoined balance sheet, but in addition to its own bonds it is liable for some nine millions issued by leased companies, which, however, are all self-supporting. The Joliet and Chicago is leased for 1,000 years at a rental equal to 7 p.c. on its common stock, the Louisiana and Mo. River at 35 p.c. of gross earnings after deduction of taxes, and the Kansas City, Chicago and St. Louis for 1,000 years at 35 p.c. of gross receipts. Below are the usual tables showing traffic, earnings, income and balance sheet of the company for a series of years; their highly satisfactory nature is so evident that further comment is needless. The company's credit is so excellent that the average price of its common stock is 140, the lowest quotation on record since 1885-132-having been reached in 1890. Table showing Passenger and Freight Movement and Revenue on the Chicago and Alton RR. CHAPTER XXXVI, THE CHICAGO, ROCK ISLAND AND PACIFIC RR. The company preceding the present corporation and bearing the same name originated in 1852, in which year the project of building a railroad from Chicago to Rock Island on the Mississippi took definite shape. The road was completed within two years from the date of the charter, and soon after its opening the Mississippi and Missouri River RR. was chartered and begun under the auspices of the same company. This line was to run from Davenport, opposite Rock Island, to Council Bluffs, and to be connected with the Rock Island by means of a bridge across the Mississippi, constructed by another independent corporation, likewise supported by the Rock Island, which in this manner provided for a through route between Chicago and Omaha, where it was to meet the Union Pacific. The Mississippi and Missouri River RR. received considerable land grants in Southern Iowa-which afterwards became the property of the parent company-but the country it traversed being almost entirely unsettled its earnings proved insufficient to meet fixed charges, and in consequence its debt to the Rock Island gradually increased. Differences between debtor and creditor accelerated an amalgamation which was sure to have taken place sooner or later, and the line defaulted on its interest, was placed in the hands of a receiver, and sold in foreclosure in 1868. The Rock Island purchased the road for $5,500,000-this being the Mi. and Mo. Railroad's debt to it-and consolidated it with its own, acquiring the bridge |