The sun. [volume] (New York [N.Y.]) 1833-1916, 1891-09-26
UNION PACIFIC FINANCES.
THEY ARE FINALLY ADJUsTKD 10 THE
GREAT RELIEF OF ALL CONCERNED.


n Receiver In Charge Of the Property ..a
Has Sole the Stock Heavily. S~s Mr.
Gould and Mr.. Morga. ADJUST Their
Diserences, aad che Public IL y,viteA 20
Participate in Their WORK.
Wall street Is experiencing q sensation
nearly every day. The collapse OF the Septem.
Der corn deal was followed closely by the Mis-
souri, Pacific dividend episode. which. By the
way, is not yet completed. and yesterday the
affairs OF tho Union Pacific Railway took q
turn that damaged a good many peoples cal
culntions. though 1t will result to the advan.
tage OF tho company. To make long story
short by condensine Trustworthy evidence. It
appears that the capitalists who undertook
last winter to avert the formal bankruptcy Of
tho Union Pacific Company have changed their
plans twice under pressure OF circumstances
1t will be remembered that when the company
got into difficulties last December on account
Of its enormous floating debt and the absolute
loss Of confidence caused By tho embarrass-
mont Of the Earrings. Mr.. jay Gould and his
Immediate associates in railway and financial
affairs. came to the front with the view Of con-
trolling the property by taking care Of its float
ing debt.
Ono OF Mr.. Gould's motives on this occasion
was we'll known. He argued with his friends
that tho financial collapse Of, the Union Pacific
system meant widespread and protracted pros
tration to the railway industry Of tho country
as a. whole. which would be reflected in a
stagnant and diminishing market for all rail-
way securities. They. and doubtless every
one else cognizant OF the facts. agreed with
Mr.. Gould. Certain Of his friends. however
notably Mr. Russell Sage. did not agree with
Mr. Gould that it was his and their duty to as
sumo the burden which Mr.. Charles Francis
Adams had heaped upon the company. Never
theless they were persuaded to join in tho work.
Mr. Gould doubtless had another motive. and
1t was a perfectly legitimate one. namely. to
make money out Of the transaction and to con-
troll the property in tho interests OF a general
unifcation Of the railway systems Of tho West.
Incidentally he must have derived a certain
degree OF satisfaction In contemplating the
spectacle Of himself repairing the damage and
correcting the mistakes which he and many
other people imputed to Mr. Adams's manage
ment OF the Union Pacific system.
Mr.. Sage is authority for the statement that
he and Mr.. Gould wero deceived as to the
amount OF the Union Pacific floating debt
when they determined to finance the company.
Their information as to tho amount Of the in
debtedness was. according to ono Of the par
ties in interest. derived chiefly from Vice.
President Gardner N. Lane. who UP to that
time had special charge OF the details Of the
cot1panys finances. Messrs Gould and Sage
were given to understand that the floating
debt amounted to between ten and eleven mil
lion dollars. They did not at the start intend
to become individually responsible for any
part Of the obligations Of the company. and at
least one Of the number. Mr.. Sage. has lived
up to the resolution that he made at that time.
That the others have not done so will appear
further on In this narration.
In due time Mr.. Gould and his associates dis
covered the real condition Of the Union Pacific
Company. To finance 1t proved to be bigger job
than they cared to struggle with. They paci-
fled good many creditors. shifted loans. and
incidentally helped along bull campaign last
spring with the hope Of improving tho general
situation to an extent that would enable them
to win outside support for funding scheme.
But spring Is not the best season Of tho year
III which to engineer bull campaign. and
though the one referred to was successful on
the surface. It did not produce the expected re-
suit with investors. Besides. the exertions Mr..
Gould made proved too much for him and he
was obliged to give up business and 60 West
for his health for the summer.
There Is much strong circumstantial evil
dence in support Of the view that when Mr..
Gould was obliged to relinQuish business he
also abandoned the project OF financing the
Union Pacific Company. Possibly he thought
that by appearing to abandon It the creditors
themselves. who are really more interested in
the matter than any one else. would come to
the front and assume the task which had
proved too much for him. And this is precise
larger creditors got together. and after many
e sS se9e Of . at % CLAIMS es against
their par value three.year collateral
T n3t %sss5 has
se s9M 81 pwnS Psa the
requisite cash. The directors Of the company
@ ssd hs and few su
sary cash subscriptions. was lacking down to
tende e, P fS tic aa 'ne company were al
$i.Oo1O99 Of the r. notes ,n provided Messrs.
rSsn On c a
made 6y that irm 70 the Union Pacific Com
two Of Boston. They also wished to DO re-
leased. Mr. Gould and others similarly situat-
s 81 MESSED e.
should take tho. three;.year notes, fer their
claims ct fa bc cash. banne'f
holding their. respective positions. and.
q there haze fHso been
Of tho larger creditors have been so annoyed
At the delay resulting from this apparent dead
lock that they have laid the blame entirely
ppoE one party to tho controversy. namely,
Mr.. Gould and those allied with him. Some
people experienced In business affairs have
given vent to their irritation In the crcunl-
stances In language not calculated to promote
any negotiation. However. all that Is past
now. for n settlement was finally reached late
yesterday afternoon which includes an invita-
lion TO the public to participate in the funding
gan. Chairman OF tho Creditors Committee.
and whose Arm is to net as trustee OF the col
lateral trust notes. took hold OF the situation
yesterday with unusual vigor and determined
70 put the funding plan through without the
held. That gentleman's position was do
bcrbed In tho street as obstructive. probably
Tor OBJECT upon the stock market. But it viii
be seen from tho foregoing that Mr. Gould
must linve felt that he was entitled to some
consideratiSn in the premises; As a matter Of
~ s mis- fa sc E
obligations held by Messrs. Drexcl. Morgan L
Co. His cash subscription to tho new notes
then became operative. and with other sub
Sorfptions to the notes the possibility Of q re-
ceiver for Union Pacific Is removed.
1t would appear from an advertisement