Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-08-13
UNION PACIFIC IN BAD SHAPE.
What New York Financiers Say About the
Great Western Line.

Great Western Line
The Chicago Herald contains the follow
ing:
New YORK. Aug. S.-There is nothing
about the Union Pacific company to-day
which has not been known for months to
the few. There is : reat deal more known
about it TO the many Therein consists
largely the difference in the speculative pO-
sition of the stock, and it may be added, of
the bonds also. The market the past week
has hinged considerably on the movements
of Union Pacific. 1t did not make its bad
break till Thursday, but there had been free
selling of that and other stocks the day be-
fore. On Friday the whole list responded
to the rebound in the pivotal stock, and to-
day, on q much reduced volume of trading,
prices were steady at some concessions from
Fridays best figures After this furry
there may be a dull spell again. No one
seems inclined to dispute the fact that the
chief question in regard to Union Pacific is
how TO keep it out of the hands of 4 re-
ceiver.
When the real condition of the comp any
was made known, shortly after the publica-
ton of its last report, it seemed to startle
the street. The statement was denounced
in some quarters as exaggerated and SenSa-
tiOnal, but especially condemned as being
prepared III the interests of the great bear
OPERATOR Addison Cammack. This was
DGtduSt JIlt OIlc OulN jlllg JIltI
investor or Spectator was interested in was
TO know whether the statements made were
true. Their truth or their falSity was some
thing which MIR. Cammack could not pos
sibly affect, and as the company'S report
was given as the authority every one could
see for himself whether they were true or
not. OF course they were true. It has
taken but short time to demonstrate this.
The special cause of the break in the stock
the past week seems TO have been the de-
mand of certain Of the money lenders for
payment of their loans. What prompted
this sudden demand! Possibly the knowI-
edge that the earnings of the company are
not turning out we'll The June statement
was expected some days ago, but it has not
been seen by the public yet. Somebody
must know what it is. But one months
earnings, good or bad, is unimportant.
The present position Of the company is
the result of years of downward progress.
y fatal facility in borrowing has brought it
where it is. Had the managers found it al
ways difficult to sell bonds prudence and
economy would have been forced on them
Now that the bonds cannot be sold 4 CON-
bination OF the company's creditors with
certain banking houses has been formed to
keep the company out of formal confession
of bankruptcy for three years. They will
advance il what money is needed during
this period-''for q commission" AT the
end of that period it is supposed the COM
pany will have been enabled to sell its
bonds to the public. Borrowers have to
pay interest according TO their necessities
and the measure of the risk taken by the
lender. 1t may be imagined, therefore, that
the Union Pacific will not gets its money
cheaply. All this is not the sort of thing
which makes a stock look like desirable
investment. 1t is rather suggestive of
committee of crows picking the bones of a
carcass. AT the end of the three years the
bones may be picked clean.
How many more roads will require to be
financed in this fashion before the bond
market improves9 The Union Pacific road
does not stand alone. Its representative
Western system, and the excessive building
of the branch lines into improbable coun-
try which has brought it low, is a craze
with which other companies have also been
bitten. The greatest competitor of the
Union Pacific is the Burlington. The eX-
tensions of the latter have all been in the
others territory or into the barren wilder
ness. The Burlington is also now confronted
with the impossibility of selling more bonds
Perhaps this is fortunate. In the way its
extensions were projected, it seemed as if
their competitors would mark the certain
bankruptcy of the company. But what is
to be the fate of the truly remarkable line
from the middle of Nebraska up into the
wilds OF Northern Wyoming, some five hun
dred miles or more. or which at present is
lost somewhere in that wildernessa Is it to
stop there or go on some more hundreds of
miles, finally TO emerge at Butte or Helena
in Montana, and there come into competi-
ton with the Union Pacific again, or the
Northern Pacific? 1t is no answer to say
that the insiders support the stock. That
does not wipe out the fatal policy
which has been steadily reducing
the earnings of the Burlington
company year by year and swelling
its fixed charges. This will tell in the end
Cniou,Pacific stock has had Just such support
at many stages of its progress from above
par downward. So many bull pools were
formed in it, and so disastrous were they in
their results, that the stock at one time be-
came known as the pool killer" It has
not reached 25 yet, but it will, although
after this recent furry it may possibly go
above 40 again, if the general market is IA
yorable.
The fact that so many large systems of
roads are really hard up, simply because the
public has become surfeitedcwith the con-
slant streams of bonds they poured out.
largely contributes TO keep alive that feel
ing of distrust which makes the stock mar
ket heavy in the face of the crop news. The
latter is all one way and Wall street is Ge-
luged with dispatches piling up the esti-
mates of the grain yield, each higher than
the other, until figures have been reached
such as the country never heard of before
And yet the public refuses TO buy and
snSeps aloof from the market.
Another cause of the distrust is GER
tainly the silver question. II is an awfully
complex one, and the din of discussion is
heard perpetualy, for no two persons seem
to agree upon it, and the average man is
ready to give il up as too much for him.