The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-06-17
A MYSTERY SOLVED.
How the Union Pacific was Made 60 Pay Div
idends-A New Why 90 Oct Goal.

tdends-A New WHy TO tet tOHi'
To THE EDITOR or The SUN-Str IL has
been mystery to railroad men and wall street
generally that the Union Pacific Railroad, which
under former management could hardly keep
itself out OF bankruptcy, should, after Gould's
accession to the control, have suddenly devel-
oped capacity for paying eight per cent. divi-
dends.
II vas known that the railroad had been
poorly constructed, aud that large sums had
to be expended annually to keep tho track
and road bed In proper repair. The wood
used for sleepers was Of a kind which requires
renewal at short intervals, and In every way the
railroad was an expensive one to keep up to the
requirements OF Its business.
After Gould had bought enough stock to carry
the election, and had placed himself Ia post
tlon to c1ntrolt the railroad permanently, reports
began to be circulated that the cost Of running
the concern had been greatly reduced that re-
trenchmcnt was carried out in every depart
ment; and that II no unforeseen accident oc-
CURED stockholders who stood Arm In their
purchases might expect a dividend at no distant
day: True enough. dividends were declared and
paid whether the parties who hold the great
blocks OF stock received theirs or not IL known
to few but themselves II IL certain that those
holding small lots received the mounts d eel red
from time to time.
Recent developments explain TO a certain de-
gree how portion Of tue money from which
dividends have been declared was obtained.
Some days ago II became known IN New York
that Gould had lost control Of the Colorado
Central Railroad. and that his contract Of n year
and n half ago with the Kansas Pacific Railroad
had been seriously i'm Uairod. II was stated that
parties with whom he had not kept agreements
entered into at the time OF the Kansas Pacific
negotiations, had combined and broken up his
control OF the railroad system To the southeast OF
were was not explained.
II now appears that the capitalists who were
laIsey lnteresteu ih Soi"ranO Central were also
pHnv. the lands OF which are situated near Gold
en- CITY, on the line Of their road. The supplies
OF coal for the use Of the Union Pacific Railroad
are obtained 20 great extent from the mines
" the Wyoming Coal Company, and pass over
the Colorado Central before reaching the trunk
line. The Union P.cinc Rairoad, relying upon
controlling the products Of these mines, M ade
contracts with the Central Pacific Railroad to
supply II with coal, IN addition to that re-
qured for It's own consumption. The pro-
prietors OF the Wyoming Coat COMPANY, after
mined as much coal as was called for by the
Union Pacific, aud kept up the supply ut q 1xed
rate. The critical condition OF the finances
paying In fun for tue coal which 1t used
and supplied 70 the Central Pacific. and
was due to the Wyoming Coal Company. OF
which the latter was much In need, The orders
Of the Union Pacific were, however, allied for
long time, and IL WAS not until the Union Pa
clnc owed nearly $l,5Oc,OOJ tnat the co Il COM
pany became urgent Ia demands for Its pay:
OF further delay In payments did not seem sem
sible to the owners OF tue coal mines, particu-
larry as Gould was spreading differing reports
Of the condition ~ the Union Pacific Railroad
In Wall street, and its bonds and stocks were
steadily creeping up to higher figures.
Matters nm lily came To such pass that the
wyoming Coal Company refused to supply the
Uulon Pacific with coal until that all sady deliv-
cred mad been paid for. Ile proprietors Of the
mines we're considerably surprised one morning
soon afterward ut the feply Of the Union Pacific.
Ii appeared IN the form OF a large body OF men,
WAC proceeded To take possession OF the wy
oming Coal COnpanys property and Offices by
force. The old officers aud employees we're ruut-
o.. and in region where niignt seemed to make
right. they were unable to organize an effective
Resistance or to regain possession Of the mines.
Tue new set OF men. acting unoer orders from
Gould anu Dillon, foTthwitn BEGAN luiuing, nd
have su plieu whatever c"al was required oy the
Union Pa'tnc ana IT. connections ever since.
Tue claim whch was made Dy Gould in support
OF this arbitrary proceeding was that tue land
belonged To the graut oi the Union Pacific Kali
rod. lnasmuch az that BODY Of land had not
been surveyed, and the Limits Of the Union Pa
cluc sections dc nneG, ~ IL unlikely that the po-
sition Will ne FOUND Il nable.
The wyoming ca Company has taken the
matter into the courts. both "a to the claim for
Sl,5OOOOJ for coal ala eady furnished, ana TO de-
1ne lts rignts to the pro pert, irotn winch Gould
When tis annual elc ton for directors Of the
Colorado Central occurred "a short lime ago, rs
stoCkholderi Of that railroad saw chance to
protect tier rights In tue coal niues, and hAv-
ing ousted Gould. they now hold the win
ming caids as to tho Wyoming Coal Com
p4ny, Gould may mine the coal, but the rail
road can charge Its own turin for Its traueporta-
ton u the line OF the Union Pa tic. Tue latter
c"rpor ton does not possess mines enough IN it,
own vicinity TO meet It's demands for fuel, aud
VIII undoubtedly have to submit to the exac-
tiuns OF tue Colorado Central. which are not
hkey to Dc moderate.
Ihe ability OF the Union Pacific to pay divl-
bends seems 10 loo Limited bv the number Of
wealthy corporations along the line Of the road
eTIRABoUT