New-York tribune., 1874-09-19
BANKING AND FINANCIAL

UNION PACIFIC RAIROAD-NOTICE TO DoNDHOLDERs.
The Directors of the Union Pacific Railroad Com
Dany feel much qualification IN announcing to the
bOndhOlders the great and approaching close
of the funding operations OF the Company. On the
I'd inst the Directors extended the time for
changing Income Bonds for Sinking Fund Bonds
until the 18th inst and since then ONE-AND-A-HALB
MILLIONS Income Bonds have been exchanged,
leaving only about ONE MILLION of the Incomes now
outstanding out of the original issue of ten millions
Thus during the very short period which has
elapsed since the funding operations were COM
menced. about NINE MILLION DOLLARS Of the Income
Bonds have been converted into the Sinking
Fund Bonds: and when it is taken into cOnsidera-
ton that in this period was embraced the duliest
month of the Summer, the Directors, many OF whom
have been identified with the enterprise since It's
very inception, naturally feel great satisfaction
at the success which has attended their efforts for
the future welfare of the Company the rapidlty OF
the conversions being unprecedented IN railway
finance.
The exchanges within the past two weeks have
convinced the Directors that a much larger amount
of Income Bonds than they had supposed are held IN
Euroue. many of the recent exchanges having been
for European account. The Company have notiil-
cations Of bonds on the way from Europe tor eX-
change which were not shipped in time to reach
here by the 18th inst, and numerous caDie
telegrams have been received by New-Iork cor
respondents of European bondholders asking II the
Comnanv would continue their terms of exchange
six of the Sinking Fund Bonds for i've OFT income
Bonds-until their bonds could reach New-lorK' AT
the request of the New-York representatives Oh
European bondholders the Directors after mature
deliberatIon have decided to extend the time Tor ex
changes until Oct. 1. No doubt both the remaining
American and European bondholders will avail
themselves of this opportunity to exchange their
bonds, when the Directors hope to be able to an
nounce the final and complete success Of the fund
ing operations of the Company.
The Directors take this opportunity to congratulate
those holders of the Income Bonds who have ex-
changed the same on the steady appreciation IN the
market vaue of the new Sinking Fund Bonds which
have advanced over nine points since Jhe zd INST
These bonds are constantly growing In lavor WIN
investors and it would seem should eventually take
a higher rank on the Stock Exchange than the In
come Bonds have done. owing TO the valuable
security behind them.
The Sinking Fund Bonds are a mortgage upon the
road equipment and franchises OF the Union aciAc
Railroad Company after the First Mortgage bonus
and the Government lien, which alone Is SuInclen'
security to give the bonds high standing anu III
sure the prompt payment of interest ana pilhcPdI'
but in addition they Second mortgage upon 'no
immense Land Grant of the Company. The Land
Grant Bonds which form first lien upon tue Iahus
have been reduced from Sl0A0OOO to nearly
sOOOOO0. and the Land Department has In notes
and cash about S2,7OO,OOO, which. at the present
market price would retire S30O0,OOO more OF the
bonds reducing the total To S5,000OOO Inc Lana
Department has bought and Cancelled nearly SooVUOO
Land Grant Bonds since Jan. which Is very rapid
reduction in the bonded debt. 1t Will be seeh ehee
fore that the time is not very distant wheh the
Sinking Fund Bonds viii become flrst Lien upon
the lands Of the Company, an empire In lleeh' me
Company. up to Aug !. 1874. had disposed Oh
fOS s4 acres for s4719367 an average OF II % pei
acre, and still had on hand II, ,04,2l) acres
As illustrating the prospective value Oh the Cnioh
pacific land Grant tbe case of the Illinois Central
COMPANY can be cited. In 1850 Congress granted
to the State of Illinois six sections OF land per ne
of road in aid of the construction OF railroad from
Cairo to Chicago and Dunleith. lhis HapI was
transferred By the State to the Illinois Central
pany. The extent of the Land Grant was I,'''O'0
acres of which 100000 acres were SET apart loi con
struction $4,000 acres TO pay interest Oh Don' au
345 900 acres were left free Of incumbIanee. Acou
ing 70 the last annual report OF the lIinol'
Company. the sales of lands ,includlng adFanoe u"
terest had realized 24 1894, 7o6, and the average per
acre had been 81 "a for interest lands' CIV ~ Ioi
construction lands, and 81 81 for free iands Inc
Land Grant Of the Illinois Central Company con-
sisted of agricultural lands only while the lands OK
the Union Pacific Railroad are not only agr1cuturai'
but also contain rich and apparently lne1hausupe
deposits of coal and iron ore. The Union racine
Land Grant is nearly five times greater than tnat Oh
the Illinois Central, and yet the latter has realized
nearly s25 600 from its lands, with SSOO" acres
still on hand Some idea of the prospective value oi
the Union Pacific Land Grant con be derived i'oin
these figures The coal lands of the Un'on racine
when developed. viii supply the Western country
and the Pacific coas, with coal the moving OF wnlch
will give the Company large and valuable tranne'
The Directors. IN making this communieatioh 70
the holders OF the Companys securities ieei oouiu
TO express their conviction that there Is s'e"'
future before their enterprise Inc uauc reeuIns