The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-05-31
THE ROAD BANKRUPT
Gould Saved the Union Pacific
From a Receiver.
CAN He EXTEND THE DEBT
Peninsular and Oriental Steamship Co.
pete With Canadian Pacific.

NEW YORK, May 30.-TSpecial. THE
Times says: In its main features the mar
ket for the past week presented little
change from the previous week. One or
two stocks have been especially strong,
and one or two especially weak. One of
these weak stocks has been Union
Pacific. 1t has acted curieusly
since the crash last November.
Whatever mystery there may have been
about this has been cleared up by the pub
LEGATION of the annual report. The state
of affairs which an analysis of its lab folio
pages discloses must be revelation of
startling nature to the general public. To
the few initiated the facts were known,
but to the average investor and specula-
tor they certainly were not.
The road is bankrupt. There is no other
word for it. 1t must have gone into the
hands Of a receiver in January had not Mr..
Gould furnished money out of his own
pocket 10 meet its obligations. There
were vague rumors at the time Of its,press-
ing difficulties, but it is safe to say that
few people knew the real facts of the case.
This report shows that for at least eight
years the Union Pacific has been going
down and down, each year worse of at the
end than at the beginning, each year pill
ing up the floating debt until on the
31st of December, 1890, it had reached
the colossal proportions of sci, 4fS,094.
1t is actual debt, money borrowed from
every possible source and notes of the COM
pany given for it, secured by collateral for
which no market could be found: a debt
as real and tangible as many an
! = krr<, Aa~ 80
tailor and his landlord, for which
he has his notes out. and this is the pres
ent actual condition of the company. The
holders of its notes could not have got
back one-third of the face value of
their loans if they had sold
the collateral. Hence they were
compelled to hold no. Other creditors who
had notes which were due got their
money from Mr.. Gould. They would have
gone TO the wall if the paper had gone 70
protest, and the Union Pacific Company
would have gone into receiyership. Il is
now proposed to take up these millions
upon millions of floating paper by issuing
collateral trust bonds secured By the
same collateral; in other words, the
general investing public will be asked
to step into the shoes of the present
creditors of the company and accept the
same security as they have, which security
proved TO be worthless when the pinch
came, because there was no market for the
collateral.
Mr.. Gould has sent Mr.. Clark 10 manage
the property, and great economies are
promised. No showings OF net earn
ings, effected by reducing the operating
expenses, will ever boat these col
lateral trust bonds, for investors have
been educated by costly experience,
and if the public does not take the bonds
and a receivership is to be avoided,
Gould must take them himself All
that it would mean, in the opin-
ion of people whose Judgment even
he respects, is that for the next four or five
years he would worry, and scheme. and
plan, and drain his own purse TO keep the
Union Pacific road out of the hands of a
receiver, and perhaps fail in the end. Is he
did with the Wabash.