respectively, these returns sank to a very modest rate. The property is a valuable one, but will have to show great development to justify its purchase price. Payment was made by the issue of collateral trust 4 per cent bonds to the amount of $23,520,000, in return for which practically all of both issues of stock were deposited. Certain smaller roads were also bought in. In June, 1902, the stockholders voted to increase the capital stock from $60,000,000 to $75,000,000; and in July the directors decided to allow the stockholders to subscribe at par for $8,235,000 of the new issue in amounts equal to 12½ per cent of their holdings;—the new stock to take up shares of the Burlington, Cedar Rapids & Northern, the Rock Island & Peoria, and the St. Louis, Kansas City & Colorado.[661] The first of these roads connected the Rock Island system with Minneapolis and St. Paul.[662] The Rock Island & Peoria was a short line in the state of Illinois. The St. Louis, Kansas City & Colorado was to afford, when finished, a more direct route between the important cities of St. Louis and Kansas City. This is where matters stood when the reorganization plan of August, 1902, was brought forward. There had been a refunding put through in 1897 whereby some simplification of bond issues had been secured;[663] but this scheme of 1902 was for a different purpose and differed radically in the methods employed. Its explanation is to be found in the character of the men in control. We have seen that Mr. Moore had made his reputation in the speculative promotion of industrial combinations, that he had entered Rock Island in search of an investment, and that he had thrown himself into the extension of the system in part because he saw the opportunity for development, in part because he hoped to pave the way for profitable manipulation of the stock. The time he had awaited seemed now to have arrived. His projects had caught public attention, comment on the whole had been favorable, and the price of his shares was at a high level; all indications pointed to the probable success of a scheme of stock-watering on an enormous scale. At the same time Mr. Moore was too well pleased with the position he had attained to wish to sacrifice it by the sale of his holdings; and his desire was, therefore, to devise an arrangement whereby the stock of the Rock Island should be inflated and large blocks sold to the confiding public, while the control should remain where it had been before,—in the hands of Mr. Moore and his followers. It is to be noticed that there was no call for a reorganization by the creditors of the road, and no question of a default in interest, or even of a cessation of dividends upon the common stock; nor, on the other hand, were earnings so great that the managers felt it unwise to distribute them. The reason for the reorganization was entirely the financial ambition of the Moore group and the chance which its members saw of making larger profits than the