New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-10-05
WHAT THEY SUGGEST.
REPORT OF THE GOVERNMENT DIRECT
ORS OF UNION PACIFIC

ANOTHER PLAN PROPOSED FOR THE REoh'AN-
1zATroN OF THE COMPANY.
The Government directors OF the Union Pacihc
Railway COMPANY have submitted their report oi
the company for the year ended June 80 ls''' ~
The Secretary OF the Interior and have also iSsu'u
If in circular form for distribution. The report
covers in outline thc operations OF the road for the
vear a review Of the work OF the receivers since
they cam. into control and an outline Of plan io'
the reorganization Of the property.
,ftcr recting the facts leading to the appoint
mont Of the receivers. the report mentions the
difficulties that presented in the WORK oi a'
ministering the property To meet all the ob-
ligations Of the company. especially those result
ing from traffic contracts with other eoinpanl.S'
and IL saws that the receivers adopted policy for
the administration OF the property which would
conform TO the equities and rights of the various
dspendent companies and the holders OF 'heir Sc
curities In regard TO this policy IL says in part:
Tho receivers have considered it to be their duty
to administer thest properties as though they han
been appointed receivers IN SUITS D,o"s a, ,bem
close the various mortgages when cover ~,
dhey h n rails covered BY particular mortgage
nianI on annlieS 70 The paymen of interest
cruing on bonds issued under such mortgage; fl, III
,,nrest accrIing upon mortgages covering other
properties or in satisfaction o. 3I G 1wav COM
pany.
The report says. in reference to the work OF the
REORGANIZATION Committee:
plsh its objects. The principle upon Whl'h !, , MAJ
rrocced,d has been that the terms of seitismeno
n ~," proposion could be- made the general cred
itors. This We think was hisla a h,.ing hforn
them the whole proposition or any s,ale"c, rn,
terms BE- offered TO other credltorS hHI' ,b no
were asked to make; and would haturaanS anu "a
reason Of their official reau%ns sec ,SIS than the
property could possibly be mad 10 9nmi,,ss nro
posed no plan OF It's own
The report then mentions the bill introauced III
Congress for the reorganization OF the property
This bill provides that the moneys ana se'"''''''
in the sinking fund should be applied to part pay
mont Of existing first mortgage bonds whose h'hS
were prior t. the lien Of the United states aI''r
sucb application there would remain slVN"p 90
such prior bonds Under the provision OF the
Reilly bill the only securities available to be used
for paying off the s2l.co0OJ bonds are securities
which Will be subject 10 the Government heh ana
existing liens subsequent 10 the lien Of the "oVerh'
mcnt
The Government directors IL not think that these
conditions can be compiled with. and have snG-
gestel a plan for the reorganization Of the mon
Pacific Railway Company which can also De APP
piled to the oregon short Line and titan Northern
Railway Company and The oregon Railway ana
Navigation Company. This plan u o'seu uio" "i'
following principles:
Ascertain the minimum net earning power 81 me
railroad railroads TO he reorganzed suDJ'.t WIG
|
gage. under which Issue per cent In-yfar
bonds 10 an amount SUCH that me a'ciu,nt
interest," nr nowt WIN ascertain tho debt duc to the
Government by adding interest At per cent 10 ,,e
principal Of the bonds from their date 10 th.'!
maturity. creiting against same the amount %,
thu United states bond and Interest accom-, ri.i
di-counting the principal ana interest," >" 49,
~ per cent per annIm. for an agreed ia'' say
July l. $50 apply the moneys an sr'nI't's IN '',
sinking fund the part payment or 'Ntlh''l'h
G,ni5 wnTr na 49, the Stock Of the linton
/, R,f1 a
Of payment II assessment lssI" new stock Tor Inc
amount thereof. apply $500 81 me a,l"h IN , 80
raised to tn further extinction ~ bonhs having
prnrify 81 lien over the lien ~ the Government.
s.l 50 many II TIE first mortgage per cent 10"
Irtr bonds As shall BE- required 10 pay III ~" re-
riiy. issue To- the Government An amount 81 mrs
m0rigag" per cent l"'-S"ar honi- tiH'' - ~
lug pr cent hTst W'ilse h''l' al" 20 nI'"
preferred stock as may p" necessary I" ''rrhfht %"
security holder, Tor trlu'u"h o. 1',. ~
satisfaction OF lien subsequent 10 ne Hen OF nc
United states am Of the bonds heii u me col
lateral trusts 81 the company carry To ioreciosurc
decree ana sal" ~" "ntlre rai'di iIop.t'E 81 u'r
'ulnu Pacific Railway Company. Including I'M
| bonds ana lands held ia the collateral tTusts.
ON these principles and according ~ the net
earnings for last year which wer" HN@."1 there
| would hay. - Doe issued SlHC"ro 3 per cent ico
year gold bonds. SZJVp0J : yer cent n"n-cumula-
| tlv. preferreI stock and Ssi.'o.Go common stock.
In closing the report the dire tors Ray I'm part
II il oar Judgment that plan OF reorganization
can h. carried into effect without complete fore
cloeilfe ~ the property 81 the company O. Doe To-
oreanlzei Including IN such foreclosures all Of iis
question be- considered r. whether thr proposiu"a
=, fh,. ,;oyrrumruf b. a better proposition and VII
secure better return To- u than II could obtain by
r,.ortlnC forcciosur" ~ ITS Hen. W" max" IN"
accommodation contained IN this report because
Incni In this way will be- greater than could pos
| sibly be derived 10y compulsory process.