CHAPTER XVI

The Detroit, Toledo & Ironton Railway was organized some twenty-odd years ago and has been reorganized every few years since then. The last reorganization was in 1914. The war and the federal control of the railways interrupted the cycle of reorganization. The road owns 343 miles of track, has 52 miles of branches, and 45 miles of trackage rights over other roads. It goes from Detroit almost due south to Ironton on the Ohio River, thus tapping the West Virginia coal deposits. It crosses most of the large trunk lines and it is a road which, from a general business standpoint, ought to pay. It has paid. It seems to have paid the bankers. In 1913 the net capitalization per mile of road was $105,000. In the next receivership this was cut down to $47,000 per mile. I do not know how much money in all has been raised on the strength of the road. I do know that in the reorganization of 1914 the bondholders were assessed and forced to turn into the treasury nearly five million dollars—which is the amount that we paid for the entire road. We paid sixty cents on the dollar for the outstanding mortgage bonds, although the ruling price just before the time of purchase was between thirty and forty cents on the dollar. We paid a dollar a share for the common stock and five dollars a share for the preferred stock—which seemed to be a fair price considering that no interest had ever been paid upon the bonds and a dividend on the stock was a most remote possibility. The rolling stock of the road consisted of about seventy locomotives, twenty-seven passenger cars, and around twenty-eight hundred freight cars. All of the rolling stock was in extremely bad condition and a good part of it would not run at all. All of the buildings were dirty, unpainted, and generally run down. The roadbed was something more than a streak of rust and something less than a railway. The repair shops were over-manned and under-machined. Practically everything connected with operation was conducted with a maximum of waste. There was, however, an exceedingly ample executive and administration department, and of course a legal department. The legal department alone cost in one month nearly $18,000.