The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-10-18
UNION PACIFIC
The Plan of Reorganiz Outlined and Is
Operative Until December 81, 1890

The Plan of Reorganization Outlined and Is
Operative Until December 81 1896
NEW YORK, Oct. ia synopsis of
the plan of reorganization of the I'm ion
Pacific was announced today. 1t places
the milage affected by the reorgani cation
of total of maih line of 1927 miles; ball
anees due on outstanding land and town
lot contracts on December 81, 1891, wer Q
Sc, 162. 751. and unsold land grant lands,
including those under contract. amount
ed to 6, 524.0)0 acres, estimated value, S13,
S5s, 800. The total funded debt is placed
nt..$140, 425, S62. The fixed charges ana
deductions from net earnings, including
Interest on bonds, sinking fund and gov
eminent requirements are stated in the
pamphlet for period of five years the
average fixed charge being SIS, 500, 00l.
This, it will show, is exclusive of the ex-
cess of interest on the debt to the govern
ment, over the net earnings applicable
nnder the Thurman and other acts, OF
interest on bonds held on main line
mortgage trusts under conversion pro-
visions and of the Obligations OF the rail-
way company under traffic guarantees.
Including those items, the isd andother
charges prior to the stock for the year
1892, being the year just preceding the
receivership, aggregated the sum of
s., sS1, 475 or greater by 1881. 475 than the
amount necessary to pay the ANNUAL in
terest upon the mailman mortgage debt
and full annual dividends on the mini
mum issue of preferred stock conte III plat
ed in the reorganization plan.
The pamphlet shows the average annual
net earnings for ten years, 1885 to 1894,
Inclusive. were 81, $50, 500, or an amount
greater by 1868, 500 than the maximum
interest and dividend requiem ents upon
the new bonds and preferred stock pro-
yided for the Plan.
The lowest net earnings realized by the
Union Pacific railroad were those OF the
year 1894, when they were $4, 3l50 OFF, or
S3l5. OF in excess of interest ON the max
imum amount of proposed bonds of the
new com pany. The plan contemplates
the issue of 500, 900, 900 of first mortgage
railway and land grant 50-year per cent
guaranteed bonds, $40, 0oe, 600 of tue per
cent preferred stock and $61. 900. 600 of
Common stock. The new bonds are to be
secured by first and only lien upon the
main line mileage OF the Union Pacific
railway, equipment, land grant, lands
and land grant balances, and upon such
branch lines of railway as the com mittee
shall avail of through the ownership in
mortgage trust of branch line bonds.
The preferred stock is to be entitled to
per cent non-cum ulative dividends. pay
able out OF net or surplus earnings before
the payment of any dividends on the
com mon stock. The stock of the present
company will be assessed $l5 per share,
the holders receiving new preferred
stock, equal at par to their present
holdings.
reorganization syndicate .has been
organized to furnish ten or fifteen mill
a rn1 20 4, r.
of the first mortgage bonds all defaulted
coupons and interest assignments per-
tanning thereto, and thereafter, as they
mature, all coupons and interest matur
ing during the tendency OF the plan upon
such bonds, and to adjust, in cash, the 2
per cent difference in the rate on old
and new bonds from the date of which
the new bonds begin to bear interest, to
the due dates of the principal of any cub
sequently maturing first mortgage bonds.
The cash provisions apply to Union
Pacific first mortgage skies; Kansas Pa
cific, Eastern DIVISION, skies Kansas Pa
cific. Middle division, SKIES. and Kansas
Pacific, Denver extension, first mortgage
skies.
The time for declaring the plan opera
tive is limited to Dece N Der 81, 1896, with
right of extension to June 30, 1897. The
time for the deposit of bonds and stock
is limited to December 81, 1895, after
which penalties cf per cent on bonds
and So per shars on stock will be i'm
posed. The new bonds will be dated
January 1. 1897, and shall bear interest
on that date of January l and July
thereafter. Deposits may be made at any
of the repositories on and after Novem-
Der /, 1895, from which date naturei
coupons on first mortgage bonds will be
cashed as provided in the plan. Stock
part of the assessment until thesplan has
been declared operative. Securities will
be returned free OF expense to holders
should the plan be abandoned. The de-