The morning call., 1894-11-16
OFFER TO UNCLE SAM
Generosity of the Union Pacific
Directors.
Government Can Take Half Loaf
or Run the Chance of Get.
ting Nothing.

OMAHA, Neb.. Nov. 15.-An interesting
feature of the proposed reorganization of
the Union Pacific developed to-day in con-
nection with interviews with local rail-
road men by Frederick Cnudert and John
w. Doane, Government receivers of that
properly, who passed through last night
en- route East after examining the system.
MIR. Coudert expressed himself as being
favurably impressed with the Union Pacific
properties, and thought the differences
existing between the Union Pacific, Den
Yer and Gulf and the Union Pacific Com
pany would be adjusted to the advantage
of both companies.
Regarding the plan Of reorganization for
the Union Pacific Company, as proposed
by the Government directors, he stated
that he was heartily in sympathy with it,
and looked to Congress to do something
at this session that would start the ball
rolling 10 final settlement of the yexed
problems. The scheme of the directors,
as reflected in this report, is to substitute
per cent blanket mortgage for the pres.
ent per cent mortgage soon 10 become
due. In other words, to pay the Govern
ment debt by mortgage for $40, ,600, 900
dated July 1, 1895, subjecling the entire
system of railroads to a single mortgage,
under which will issue 3 per cent 100-yeaI
bonds to such an amount that the accruinS
interest will not exceed tho minimum
earning power. then apply the moneys and
securities in the sinking fund to the part
payment or extension of bonds which have
priority of lien over the lien of the Gov
ernment, and so ON until the stock of the
ia all nrnvi6ad fnr ha
conditions.
"Of course" said Mr.. Coudert. "the Gov
ernment directors are we'll aware that no
plan of reorganization can be carried out
without the approval and cooperation of
a large majority OF the holders of all
classes of securities. There may be some
difficulty experienced in substituting the
sinking fund eights for per cent bond
at 100. rs provided for in the pronosed ap-
plication of securities. and Ia changing the
collateral trust skies to threes at $50, but,
with these exceptions, l cannot see why
the plan submitted is not good one. 1t
is the judgment of the directors that no
plan of reorganization can be carried in to
effect without complete foreclosures of the
property of the company to be reorganized,
including in such foreclosures all OF its
property held in collateral trusts"
Mr.. Coudert felt hopeful that such a
scheme as proposed by the directors might
be favorably acted upon in Congress, by
recognizing that the Government had bet
ter be satisfied with a half loaf than with
getting nothing In the event of the first
mortgage bondholders beginning fore
closures upon default Of the payment of
interest. Speaking of the second mort
gage held by the Government the directors
state that its lien is imperfect and incom-
plete, and it is tor this reason impossible
TO marshal the securities intended to be
issued so as 10 give TO tile Government as
favorable a settlement as must be offered 10
those holding security of higher class.
The real question to be considered is
whether the proposition to the Govern
ment is a. better proposition and will Sc
cure better return to it than il could OBJ
tain by resorting to foreclosure Of its
lien.
Messrs. Mink and Anderson of the re-
ceivers, Mr.. Boissevain and his party, aud
General Manager Dickinson were on the
navigation company's lines to-day. The
proposition of Mr.. Coudert was generally
discussed by the receivers.