New-York tribune., 1868-04-20


Total s2,4s61sO 81 s
The average length of the road operation 1or .e
eight months, from May to December 81, was $50
miles.
The amount of First Mortgage Bonds the Company
can issue on $50 miles of road at $4,000 per mile Is
s6,176,OOo.
Gold interest for eghtmonths at the rate OF per oo
ADD 20 per cent premium for gold 0086
ro,., .ss4585c
sup%s after paying Interest on First Mortgage
bonds
twill be seen that the net earnings have already
been more than three times this interest.
We will now add to the account the interest on the
| United States Second Mortgage Bonds, and 1t Will
| stand as follows:
Netearnngs for eight MONTHS. 70
| Interest on First Mortgage Bonds re- o-,
| Interest on Second Mortgage Bonds in
S''@'''O "
Surplus after paying all interests s7e24o oS
| The amount paid by the Government for the trans
portation of troops munitions stores and mails, has
been, and doubtless will continue to be- much more
than the interest the United States Second Mort
gage bonds If it is not, the charter provides that
after the road is completed and until said bonds and
interest are paid at least five per cent OF the net
earnings of the road shall be applied to such pay
| nent At the time the act of incorporation was
passed it was expected that the earnings OF the road
would be very large, and the Government reserved
the right to reduce the Companys charges when-
ever the profit on the cost of the completed line
should be more than 10 per cent per annum Sec 49,
Act of 1902
ARE THE BoNps SECURE '-Congress has taken an
especial care that the interests of the bondhoders OF
this read shall be secured that has never yet been
ci, ont IN mortgage
is made to the Hon. E. D. Morgan, u. s. Senator from
New-York, and the Hon. Oakes Ames, Member OF
U. s. House of Representatives from Massachu-
setts who alone can deliver the bonds to the Com
pany and who are responsible for their delivery in
strict accordance with the terms of the law.
The President of the United States appoints five
Government Directors who cannot be stockholders,
who take part in the direction of all its affairs and
one Of whom is to be every committee of the Com
pany 1t is the duty of these Directors to see that
all the business of the Company is properly managed
The President of the United States also appoints
three Commissioners TO inspect the work as 1t pro-
crosses in sections Of twenty miles, to see that 1T IS
in all respects rsclass road. and that 1t is sulta-
bly, provided with depOts stations, etc, and all the
rolngstOck necessary for its business. The United
States bonds issued TO the Company only as each
section Of twenty miles is accepted by the United
|
Mortgage bondholders deliver the Company's own
| First Mortgage bonds to the Company only on the
same conditions, except that the Company permit
ted to issue their bonds for one hundred miles in adj
vance of the completed line to cover part of the
| cost Of grading, &c.
IL will be noticed that the Union Pacific Railroad
| is in fact, q Government work, built under the
supervision of Government officers and to q large
| extent with Government money. IL may be said,
,rihom dcnger Of contradiction that no bonds issued by
any Other company in this country, or, so far as IRE
knor in he world are made secure By responsible
| Gorenmoit az the First Mortgage Bonds Of The Union
| Pacific Railroad Company They are not only first
mortgage upon property that costs three times
their amount, but upon property OF daily-increas
ing value whose income is already more than three
| times tier interest. There are many persons who
now prefer them to those of any State or nation
because they are secured upon great and tangible
reality which can be in way affected by political
| action
| WHAT ARE THE BoNDs WORTH AS AN INVEST
MENTi-AHs-Other conditions being the same secu-
rites valuable according 10 their rate Of interest
The recent average quotations for u. s. 1910 bonds
bearing only per cent gold interest redeemable by
the Government in six years have been l0l TO 10lt
and the U. s. 520s of 67, gold six per cents which
| may be redeemed in five years, have been at from
lU' 10 lUh lie Dest DrSt mortgage SIX per cent rail-
| road currency bonds range at about par, and the
seven per cents to a considerable premium while
| the Union Pacific First Mortgage Bonds are sure to
pay six per cent in gold. which, with the premium
at 40 where it has stood upon the average for about
| three years, pay 3-j per cent
Another and very important consideration in de-
terInnng the value of these bonds is the length Of
| time they hare 10 run.
! 1t is well known that long bond always COM
mands much higher price than - short ono. With
the u. s. 520s. of 67, having five years TO rum at
| from to per cent premium, the Gs of 81, running
thirteen years before maturity, bring 70 per cent
more. II is safe 10 assume that during the next
thirty years the rate Of interest in the United States
will decline a. il has done in the old countries Of
Europe and We have n right to expect that such six
per cent securities these will be held at hgh
| premium those of the Government, which in 1857
were bought in at from 20 to % per cent above par
The Union Pacific bonds are for $1,000 each, old
| have coupons attached. They have30 years TO run,
and bear annual interest payable the first days of
January and July. at the Companys Office in the
City OF NewYork at the rate of six per cent in gold.
The principal is payable in gold at maturity.
| At the present rate Of gold these bonds pay an
annual income their cost of nearly nine per cent.
and it is believed that they will soon be at premium.
The Company have but very limited supply of their
bonds remaining hand but il is expected that the
| first instament of the new bonds to be issued
that portion of the road to DO completed this year,
| will DO ready in May.
Any subscriptions accepted to greater amount
than can be filed from bonds now in the Company's
possession will be supplied from the new bonds in
| the order in which they received.
The Company the right to advance the price
of their bonds to rate above par at any time, and
will not fill any orders receive any subscriptions
on which the money has not been actually paid at
| the Companys Office before the time of such ad-
| vance.