The herald., 1894-11-17
UNION PACIFIC AFFAIRS.
Rsceiver Coudert Shgds Light on the
Reorganization Plan.


RsorgauizA alton Plan.
OMAHA, Neb., Nov. 15.-An interest
ing feature OF the proposed reorganiza-
tion OF the Union Pacific developed to-
! day in connection with interviews with
! local railroad men had by Frederick
Coudert and John W. Doan, government
receivers of that property, who passed
through last night en- route east, after
examining the system.
Mr.. Coudert expressed himself as be-
ing favorably impressed with the Union
! Pacific properties, and said he thought
the differences existing between the
Union Pacific, Denver and Gulf and the
Union Pacific company would be ad-
iusted to the advantage of both compa-
MES.
Regarding the plan for the reorgani-
cation OF the Union Pacific, as proposed
by the government directors. he stated
he was heartily in sympathy with it,
and looked to congress to do something
at this session that would start the ball
rolling to final settlement of the vexed
problem. The scheme of the directors,
AS reflected in this report, is to substi.
tute per cent blanket mortgage for
the present q per cent mortgage. soon to
become due. In other words, to paw
the government debt by a mortgage for
$40, 600, 600, dated July l, 1895, subject.
lng the entire railroad or railroads to q
eingle mortgage, under which issue 3
per cent l00year bonds to such a sum
that the sccruing interest will not ex-
ceed the minimum earning power, ap.
ply the moneys and securities in the
sinking fund to part payment or extern
sion OF bonds which have priority of
lien over the lien OF the government,
and so on until the stock of the compa
ny is all provided for under the new
conditions.
"Of course" said Mr.. Coudert, "the
government directors are we'll aware
that no plan of recrganiZ ,tion can be
carried out without the approval and CO.
operation of q large majority of the hold
efs OF all classes of securities. There
may be some difficulty experienced in
substituting the sinking fund S's for a 3
per cent bond at l60, hs provided for in
the proposed application of securities,
and in changing the collateral trust 6's
TO 3's at 100. but with these exceptions
cannot see why the plan submitted ia
not good one. 1t is the Judgment of
the directors that no plan of reorgsni-
cation can be carried into effect without
complete foreclosures of the property of
the company to be reorganizsd, includ-
ing in such foreclosures all of its prop.
erty held in collateral trust."
Mr.. Coudert felt hopeful that such a
scheme as proposed by the directors
might be favorably acted upon in con-
gress, by recognizing that the govern
ment had better be satisfied with half
loaf than getting nothing in the event OF
the first mortgage bondholders begin
ming foreclosures upon default OF the pay
ment of interest.
The report, speaking of the second
mortgage held by the company, says ita
lien is imperfect and incomplete. 1t is
for this reason impossible to marshal the
securities intended 10 be issued so as to
give to the government as favorable a
settlement as may be offered to those
holding security OF a higher class. The
real question to be considered is whether
the proposition to the government is O
better proposition and will secure bet
Ter return to it than it could obtain by
resorting to foreclosure of its lien.
Moesrs. Mink and Anderson. receiv.
ers. Mr.. Boissevain and his party and
General Manager Dickinson are on the
Navigation compsny's lines today. The
proposition OF Mr.. Coudert was generally
discussed by the receivers.