Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-05-02
THE UNFORESEEN CERTAIN.

Matthew Marshall ON the Union Pacint
Stockholders Meeting-He Thinks tbs
Best Was Made Of the Conditions-An
Exploit Worthy Of Approval
ESPECIAL TELEGRAM TO THE DIsPArCH.l
NEW YORK, May 1.-Under the caption,
"Union Pacific Affairs" Matthew Marshall
writes as follows for to-morrows Sun:
The result OF the Union Pacific Railway
Company stockholders meeting at Boston,
Wednesday, emphasizes one of my favortte
maxims, that nothing is so certain as the un-
foreseen. To be sure, the success Of the Gould
party on this occasion was not unforeseen,
strictly speaking, since it was known that
they would not submit to be turned out OF
office without resistance, but it was so gen.
orally believed that they would resist In
vain, that the contrary event was great
surprise. As it was, they received only a
small majority OF the votes cast, and those
that turned the scale in their favor were, up
to the last moment, in the hands of their op-
ponents. To have snatched as they did vic
tory from the very jaws of defeat. was an
exploit which has deservedly won admira-
tfon, If not approval.
Some people are disposed to censure the
holders of the 1000 proxies which gave to
Mr.. Gould and his friends the control Of the
Union Pacific property for another year at
least and to think that they ought to have
voted them in the opposite direction, while
some even make the charge that these
proxies were sold for money. There is no
George Gould's story that he got the proxies
by the very simple expedient of proving by
argument to the gentlemen who had the dis
posal of them that it would be for the ad-
vantage OF their principals to give them to
him. They may very well have come to the
conclusion on the merits Of the case that, as
President Lincoln would have said, this was
not favorable occasion for swapping
horses, and that they had better retain the
team they had than try new one.
An Easy Affair to Manage.
Whoever will take the pains to look over
the report of the Union Pacific Company for
1891, just issued, will see that the successful
management of its affairs is no easy matter,
Eight thousand and more miles of road, a
capital of s6O, ,O0O 900, a debt, funded and un-
funded, of more than S140, 900 900, with prop
erty and assets to balance capital and debt
combined, and gross earnings OF some forty
odd millions yearly, demand administrative
talent of a considerably higher grade than
that which suffices for any banking or
brokerage business however large Mr.
Charles Francis Adams found the task too
much for him, and left the company on the
brink Of going into the hands of q receiver.
Under Mr.. Gould's administration this
by his endeavors or in spite or them it is
not necessary to discuss. since the potentates
who combined to rescue the COM
pany showed no resentment at his
behavior by their votes on Wednesday, and
the house or Morgan distinctly refused to
exert itself against him. l should not my
self like, as stockholder in the Union
Pacific, to have it controlled by man who
has so many interests adverse to its in nterests
as Mr.. Gould has: but, then, should not
hold Union Pacific stock on any terms, be-
dends they pay. Union Pacific does not pay
any, and for all 1 can see will not pay any
until shall be dead and unable to collect
them. Still. as majority of the people who
differ with me in this respect are willing to
own the stock, and are also willing to trust
Mr.. Gould, l do not see why the rest of the
world should object.
Kept From a Receivers Hands
The company has, as I have said, for the
present escaped going into the hands of a
receiver. By making an assignment Of all
its available assets to trustees for the pene-
fit of unsecured creditors to the amount of
$lS 00O, 900, it has obtained a respite of three
years, of which less than one year has ex-
pired, in which to extricate itself from its
embarrassments. At the end Of that period
1T will again have to face the same exigency
and its fate will depend entirely upon the
value and stability of the securities, by the
use OF which it has lately so happily STAYED
off bankruptcy.
1t was conceded, when the trust of these
securities was made, that they would not
readily bring enough to pay the amount for
which they are pledged. and 1t was, more
over, asserted that even if they would do So
it would be ruinous to scatter them among
numerous small purchasers, instead of keep
ing them together as a compact whole.
Whether 1t will be otherwise when the three
years trust expires the event will decide.
This, however is a matter of small import
ance compared with that of the company's
gigantic debt to the United States Govern
ment and to its first mortgage bondholders,
which natures in installments, beginning
in ls95-the next year after the maturity of
the three years trust just created-and end
liable to be called upon to pay, commencing
in 1895, q sum which, on June 30, 1891,
amounted to $51 .ssl, sol, and which is increas-
ing by about $, 900, 900 every year, so that in
1898, when the bulk of it becomes due, 1t will
be nearly $50, 900 900.
Millions to Be Prepared For.
The first mortgage bonds, which are
prior lien to the Government debt, amount
to $50, ,5OO, 900, and mature from 1896 to 1899,
making altogether sa3, ,5OO, 900, for which pay
ment must be provided or delay obtained
not later than 1899. This too, is independ-
ent of number of smaller debts on branch
and collateral lines which it is quite as i'm
to aim at is to get the time of payment Of
the principal OF the debt speak of extended
upon the best terms that can be made with
the holders of it.
AS to the s33 1900 900 of first mortgage bonds
the question is merely one of the rate of in
terest. The bonds are in the hands Of In
vestors who would much rather not be paid
off, provided they fei6 sure of their income,
and who, If they had to decide the ques-
ton to-day, would probably take per cent
per annum, and perhaps less, in place of
the 6 per cent. which they now get. The
$50 600 900 debt to the Government, represent
ing the subsidy bonds issued from 1865 to
aid the building of the road, stands in q diff
ferent position. oddly enough, while it Is
had more revenue than 1t has known how to
spend, has anticipated its own maturing
debt at q premium virtually producing it
only per annum on the money employed
for the purpose, and would therefore, pre-
jump at the offer of anything
above per cent rather than accept pay
ment of the principal. All efforts to nego-
tiate with it an extension of time of pay
ment have so far proved fruitless.
Very Nearly Law Several Times.
Bills for the purpose that have several
times been recommended to Congress by the
Interior and the Treasury Departments
have once or twice become pretty near
passing, but they have all failed finally, and |
for the present none is even talked OF, not |
that the Commissioner of |
in a report to the Secretary of |
Interior, made only last November, repeats |
his recommendation that the debt of the |
Union Pacific and Of all the other subsidize |
railroad companies be refunded, and sug-
rests the appointment OF commission by |
The Government to investigate the whole |
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