Wikipedia:WikiProject Trains/ICC valuations/Chicago, Rock Island and Pacific Railroad

Interstate Commerce Commission, Valuation Reports, Volume 24

Chicago, Rock Island and Pacific Railroad (of Iowa)

Location and General Description of Property

The railroad of the Chicago, Rock Island and Pacific Railroad Company, herein called the Chicago, Rock Island and Pacific Railroad, is a single-track, standard-gauge, steam railroad, located entirely in Iowa and extending westward from the station of the carrier at Winterset, Iowa, 1.324 miles.

Introductory

In 1901 a syndicate composed of D. G. Reid, W. H. Moore, J. H. Moore, and W. B. Leeds acquired capital stock of the carrier, [...]

The acquisition of this stock together with proxies secured from other stock holders placed control of the carrier in the hands of the syndicate. On July 31, 1902, the syndicate caused the incorporation, in New Jersey, of The Rock Island Company, and in Iowa, of the Chicago, Rock Island and Pacific Railroad. When referred to together these two companies are called herein the holding companies. A proposition was made to the stockholders of the carrier to exchange for each share of capital stock held by them, par value $100, securities of the two holding companies [...]

The plan and agreement of July 31, 1902, was further carried out by the Chicago, Rock Island and Pacific Railroad issuing $115,929,124.66 of its capital stock to The Rock Island Company. A proposition was made to the stockholders of the St. Louis and San Francisco Railroad Company to exchange each share of $100 par value of that company's stock for securities of the two holding companies [...]

The plan also provided that the 5 per cent collateral bonds of the Chicago, Rock Island and Pacific Railroad be secured by the deposit with the Central Trust Company of New York, trustee, of the capital stock of the St. Louis and San Francisco Railroad Company so exchanged. In accordance with the plan and agreement between the holding companies, dated May 6, 1903, capital stock of the St. Louis and San Francisco Railroad Company of a total par value of $28,940,300 was deposited with the trustee and the following securities of the two holding companies issued to the former owners thereof [...]

An agreement between the holding companies, of May 7, 1903, provided that the Chicago, Rock Island and Pacific Railroad should negotiate for the purchase in the name of The Rock Island Company of one-half of the capital stock of the Texas lines of the Southern Pacific Company. The two agreements of May 6, 1903, and May 7, 1903, provided that The Rock Island Company should issue the necessary common stock required in the acquisition of the St. Louis and San Francisco Railroad Company stock and also its remaining authorized common and preferred stock to be used in the acquisition of the Southern Pacific lines' stock. It was also provided that in the event the deal for the Southern Pacific lines' stock was not consummated that the common and preferred stock issued by The Rock Island Company to the Chicago, Rock Island and Pacific Railroad to acquire the Southern Pacific lines' stock should be returned. As a matter of fact, the stock of the Southern Pacific lines never was acquired. The agreements also provided that the Chicago, Rock Island and Pacific Railroad should issue the remaining $29,070,375.34 of its authorized capital stock to The Rock Island Company. In the consummation of the agreements of July 31, 1902, May 6, 1903, and May 7, 1903, the Chicago, Rock Island and Pacific Railroad issued $144,999,500 of its capital stock to The Rock Island Company, constituting its total authorized capitalization, except $500 directors' shares. The Rock Island Company issued all of its authorized common stock, $96,000,000, except $1,500 directors' shares, and all of its authorized preferred stock, $54,000,000, to the Chicago, Rock Island and Pacific Railroad. [...]

It also had the effect of giving The Rock Island Company the ownership of $144,999,500 par value of the capital stock of the Chicago, Rock Island and Pacific Railroad. On December 1, 1909, the directors of the Chicago, Rock Island and Pacific Railroad authorized the sale of the St. Louis and San Francisco Railroad Company stock to B. F. Yoakum and associates at $37.50 per share. Before the sale was consummated, it was necessary to retire the 5 per cent collateral bonds of 1913 under which the St. Louis and San Francisco Railroad Company stock was pledged as collateral. In order to do this the Chicago, Rock Island and Pacific Railroad had to raise $7,314,660.83, [...]

To provide this amount the carrier advanced the above sum of $7,314,660.83 and received in lieu thereof $7,500,000 par value of 5 per cent temporary bonds due September 1, 1913, of the Chicago, Rock Island and Pacific Railroad. At date of maturity, these bonds were retired and the Chicago, Rock Island and Pacific Railroad issued to the carrier in exchange thereof 5 per cent temporary bonds due September 1, 1917. In November, 1914, the carrier returned $1,388,000 of these bonds to the Chicago, Rock Island and Pacific Railroad in liquidation of temporary bonds to the amount of $1,300,000 and accrued interest thereon, leaving $6,112,000 in the hands of the carrier. After the sale of the St. Louis and San Francisco Railroad Company stock by the Chicago, Rock Island and Pacific Railroad, its only source of income was the dividends on the carrier's stock still held by it. The only source of income of any consequence of The Rock Island Company was the dividends on the Chicago, Rock Island and Pacific Railroad stock held by it. The last dividend declared by the carrier on its capital stock was paid early in 1914. For this reason the Chicago, Rock Island and Pacific Railroad defaulted in the payment of interest on its outstanding collateral bonds and a receiver of that company was appointed on January 18, 1915. On April 20, 1915, receivers were appointed for the carrier. A receiver was also appointed for The Rock Island Company on July 29, 1915, subsequent to the date of this report. Further data relating to The Rock Island Company, including statements of its investments in the securities of other companies, its capitalization, its income and profit and loss accounts, and a statement of the dividends it has paid, are contained in the report of the accounting section.

Corporate History

The Chicago, Rock Island and Pacific Railroad was incorporated under the laws of Iowa on July 31, 1902, to construct or otherwise acquire a line of railway from Davenport to Council Bluffs, Iowa, to purchase, lease, or otherwise acquire, either directly or through ownership of the corporation owning or operating the same, the railways, property, and franchises of the carrier and other lines of railway property in Iowa and in other States; to maintain and operate any of the lines of railway and railway property it might acquire, and to operate under lease or other contract lines of railway owned or operated by other corporations. In May, 1903, the company acquired all of the outstanding capital stock of the Des Moines Southern Railway Company, which was incorporated June 20, 1901, under the general laws of Iowa, by local interests independent of any railroad, for the purpose of constructing a railroad from Winterset to Greenfield, Iowa. At the same time, the Chicago, Rock Island and Pacific Railroad obtained possession of all the right-of-way lands that company had acquired.

Dividends on capital stock of the carrier, held by the Chicago, Rock Island and Pacific Railroad, constitute the only source of income of the latter. Consequently, when the carrier ceased paying dividends in 1914, the Chicago, Rock Island and Pacific Railroad defaulted in the payment of interest on its outstanding bonds. On January 18, 1915, Walter C. Noyes was appointed receiver for the company by the United States Court for the Southern District of New York and ancillary receiver by the United States Court for the Southern District of Iowa on January 21, 1915.

Development of Fixed Physical Property

The Chicago, Rock Island and Pacific (of Iowa) owns 1.324 miles of single track railroad extending westwardly from the depot of the carrier at Winterset, Iowa, constructed in 1904 under contract with the Gulf Construction Company, which track is used under an implied lease by the carrier.

In addition, the Chicago, Rock Island and Pacific Railroad, in May 1903, acquired all the outstanding capital stock of the Des Moines Southern Railway Company for $91,194.64, the transfer of which carried with it title to all the lands that company had acquired for a projected railroad from Winterset to Greenfield, Iowa, which amount was charged by the Chicago, Rock Island and Pacific Railroad to investments in other companies.

http://books.google.com/books?id=4KcFAAAAIAAJ (later valuation)

Predecessor Companies

CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY—PREDECESSOR OF THE ROCK ISLAND

INTRODUCTORY

The Chicago, Rock Island and Pacific Railroad Company was incorporated July 31, 1902, under the laws of Iowa.

In Chicago, R. I. & P. Ry. Co., 24 Val. Rep. 709 at pages 1077, 1084, are detailed its financial transactions as a holding company, and the subsequent appointment on January 18, 1915, by United States Court for the Southern District of New York of Walter C. Noyes as receiver. The common-carrier property of the company consisted of station building and other structures at Winterset, Iowa; 1.324 miles of track extending from Winterset, Iowa, westerly towards Greenfield, Iowa, and an undetermined amount of additional grading beyond end of track. It also owned certain noncarrier lands, which were disposed of after June 30, 1915.

On November 1, 1916, all of the property, rights, and franchises of the company were acquired by purchase by the Rock Island from the receiver.

The common-carrier property of the company was operated by the Rock Island without formal agreement from date of completion to date of sale, but no rental was recorded as accrued or paid.

CORPORATE HISTORY

Details with respect to the corporate history of the Chicago, Rock Island and Pacific Railroad Company, as of June 30, 1915, are given in the 1915 valuation report at pages 851 and 852. There have been no changes from that date to date of sale.

DEVELOPMENT OF FIXED PHYSICAL PROPERTY

The owned mileage of the Chicago, Rock Island and Pacific Railroad Company as of June 30, 1915, was 1.324 miles as detailed in the 1915 valuation report at page 1080. There were no changes from that date to date of sale.

HISTORY OF CORPORATE FINANCING