New-York tribune., 1874-09-21
financial.
findncl1l.
UNION PACIFIC RAILROAD.
NOTICE TO BONDHOLDERS.

NUIICE IU DUNUuULDUnC
The Directors Of the Union Pacific Railroad Com
pany feel much gratlfoaton in announcing TO the
bondhoders the great success and approaching close
Of the funding operations of the Company On the
2d inst the Directors extended the time for ex-
changing Income Bonds for Sinking Fund Bonds
until the 18th inst, and since then oNE-AND-A-HALF
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
eIapsed since the funding operations were COM
menced about NINE MILLION DOLLARS Of the Income
Bonds have been converted into the new SINKING
Fund Bonds: and when it is taken into considera-
ton that in this period was embraced the duIest
month of the Summer, the Directors, many OF whom
have been identified with the enterprise since lts
very inception, naturally feel great satisfaction
at the success which has attended their efforts ior
the future welfare Of the Company, the rapdity OF
the conversions being unprecedented III railway
finance.
The exchanges within the past two weeks have
convinced the Directors that much larger amount
of noome Bonds than they bad supposed are held in
Furope many Of the recent exchanges having Deen
for European account. The Company have notlil-
cations of bonds on the way from Europe Tor ex-
change which were not shipped IN time 10 reach
here by the 18th inst, and numerous cable
kilograms have been received by New-York cor
respondents of European bOndh0lders asking II the
Company would continue their terms OF exchange
six of the Sinking Fund Bonds for i've OF the Income
Bonds-until their bonds could reach New-York AT
the request of the New-York representatives OF
Furopean bondholders the Directors, after mature
deberaton have decided to extend the time for ex-
changes until Oct l. No doubt both the remaining
will
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 the steady appreciation IN the
market value of the new Sinking Fund Bonds which
have advanced over nine points since the Id inst
These bonds are constantly growing in favor with
investors and it would seem should eventually take
| 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 Pacific
Railroad Company after the First Mortgage BONDS
and the Government lien, which alone is sufncient
security to give the bonds high standing and IN
sure the prompt payment of interest and prlncpai
but in addition they are Second Mortgage upon the
immense Land Grant of the Company. The Land
Grant Bonds, which form first lien upon the lands
have been reduced from $1O40O000. to nearly
Ss.OO0.OOO, and the Land Department has in notes
and cash about $2,7OO,OeO, which, at the present
market price. would retire $3,OOO,0OO more of the
| bonds. reducing the total to $50OOOOO. The Land
Department has bought aud Cancelled nearly S6OOOOO
Land Grant Bonds since Jan. l, which is very rapid
reduction in the bonded debt 1t will be seen, there
fore, that the time is not very distant when the
Sinking Fund Bonds will become First Lien upon
the lands of the Company, an empire in Itself. Inc
Company. up to Aug. /, 1874. had disposed of
784 acres for 367, average of S4 80 per
acre, and still had on hand 110A2l5 acres.
As illustrating the prospective value OF the Union
Pacific Land Grant the of the Illinois Central
Company can be cited, In 1850. Congress granted
10 the State of Illinois six sections of land per mile
OF road in aid of the construction of railroad from
Cairo to Chicago and Duneith. This grant was
transferred by the State to the Illinois Central Com
many. The extent of the Land Grant was 2,59j,OOO
acres of which 100000 acres were set apart for con-
sruction 900 acres to pay interest on bonds and
S45 900 acres were left free Of membranes. Accord
ing to the last annual report OF the ILLINOIS Centra
Companv. the sales of lands Including advance in-
terest had realized S2499i 766 and the average per
acre had been 81 "a for interest lands, $40 80 for
construction lands and 81 9i for free lands. The
Land Grant of the Illinois Central Company con-
sisted of agricultural lands only, while the lands OF
the Union Pacific Railroad not only agricultural,
but also contain rich and apparently inexhaustible
deposits Of coal and iron ore. The Union Pacific
Land Grant is nearly five times greater than that of
the Illinois Central and yet the latter has realized
nearly S25 10000 from its lands, with $4,000 acres
still on hand Some idea OF the prospective value OF
the Union Pacific Land Grant can be derived from
these figures. The coal lands of the Union Pacific
when developed, viii supply the Western country
and the Pacific coast with COAL the moving Of which
will give the Company large and valuable traiiic
The Directors, in making this communication to
the holders of the Company's securities. feel bound
TO express their conviction that there is great
future before their enterprise. The traffic returns
| are very encouraging the net earnings Tor July
having shown an increase of $4,000. notwithstand
| ing the general depression of business. The Com
| many has effected new arrangement in regard TO
ts coal supply whereby fuel IS obtained at much
lower cost than formerly. The extra expenses ior
filing up trestie-work, which have been charged TO
operating expenses, are about over, and In other
wavs the expenses of the road will be reduced from
| this time forward
Thesefacts together with the rapid growth of the
| Pacific commerce and the prospect that the Union
Pacific will for many years constitute the sole con-
Meeting link between the Atlantic and the Pacific,
should improve the value of the property and the
credit of the Company in the future; and to this
| end the best efforts of the management Will be
directed.
| Exchanges of Income Bonds for Sinking Fund
Bonds can be made or information obtained at the
| Office of the Company in Boston, or OF
MORTON, BLISS & Co.,
Financial Agents Of the Company, Drexel Building,
Nacaa1a..t