The San Francisco call., 1895-10-18
FOR FAIR SETTLEMENT.
EFFORTS TO ENFORCE LIENS OF
FIRST MORTGAGE TO HELP
BONDHOLDERS.
NEW STOCK TO BE TURNED OUT
RECEIPTS AND EXPENDITURES ON
PRINCIPAL DIVISIONS FOR
Ten YEARS.

NEW YORK, \. Y, Oct. 1.-THE re-
organization committee of the Union Pa
cifc Railway Company-Louis Fitzgerald,
Jacob H. Schiff, T. Jefferson Coolidge Jr.,
Chauncey NJ. Depew, Marvin Hughitt and
Oliver Ames-with the cooperation of
Kuhn, Loeb & Co., bankers for the COM
mittee and managers of the reorganization
syndicate have issued plan for the re-
organization of the property. The COM
mittee states it to be its purpose, while
continuing all proper efforts to reach a
just and fair settlement of the Government
debt, TO enforce the liens of the first mort
gage in the interest of the bondholders and
OF the objects of the reorganization plan.
1t is stated that the fixed charges under
reorganization are based on the lowest re-
suits OF the operation of the main lines
during the time of the greatest depression,
and the plan submitted has been prepared
with the purpose of insuring full returns
TO the depositing security holders, with
immediate and continuing cash provision
for matured and maturing interest upon
first mortgage main line bonds pending
reorganization.
The main lines of the Union Pacific
Railway Company affected by the pro-
posed reorganization include the Union
division, Council Bluffs to Ogden; Kansas
division, Kansas City to Denver; Leaveu-
worth division, Leavenworth to Lawrence;
Cheyenne division, Cheyenne to Denver;
total main line mileage of 1, ,S27.5O miles.
Balances due on outstanding lands and
town lot contracts on December 81, 1894,
on Union, Kansas and Denver Pacific
divisions were So, 162, 751 65, and the unsold
grant lands Excluding those under con-
tract) amounted on that date to 6,254, 900
acres, of All estimated value of S13, 1873, 500.
The bonded Indebtedness of the Union
Pacific Railway Company on October 1,
1895 (including collateral trust obligations
amounting to $1,000 ,O00 and not embraced
in the plan) amounted to So, 1856, $50, and
the debt to the Government was, principal
$3S,539,5l2, and interest, approximately
after deducting estimated value of the
sinking fund, $19, 800 900. The total funded
debt is stated at $40, ,425 662. The out
standing capital stock of the present com.
pany is $50, ,86S, 800.
The fixed charges and deductions from
net earnings of the company, including
Interest on bonds, sinking fund and Gov
ernment requirements, are stated for a
period OF five years, the average fixed
charges Tor these years being Sc, ,SO2, ,OO1 2s.
This is stated to be exclusive of the excess
OF interest of the debt to the Government
over the net earnings applicable under the
Thurman and other acts and of interest on
bonds held In main line mortgage trusts
under conversion provisions and of the
obligations of the railway company under
the traffic guarantee. 1t is shown that in
cluding those items the fixed and other
charges prior to the stock of the wear 1890
being the year just preceding the receiver
ship, aggregated the sum of s.. .881. .475 "A
or sum greater by 1881, AS A than the
amount necessary to pay the annual inter
est upon the maximum issue of the nre
ferred stock contemplated in the reorgani
zation plan.
a statement of the gross earnings and of
net earnings, taxes deducted, for a period
of ten years-1SS5 to 1894 inclusive-is pre-
sented with the stated result that the
average net earnings for this period were
$685. ,669 10, or an amount greater bv
$563,669 10 than the maximum interest and
dividend requirements upon the new
bonds and preferred stock provided for in
the reorganization plan.
1t is noted that the lowest net earnings
realized by the Union Pacific Railway were
those of the year 1894, when they were
$4,3l5,077 %, or $315,077 25 in excess of in
terest on the maximum amount of pro-
posed bonds OF the new company.
The reorganization plan contemplates
the issue by new company of first mort
gage railway and land grant, fifty-year 4
per cent gold bonds, S100 600, 900; 4 per
cent preferred stock, $50, 900, ,O00 and COM
mon stock, SOL 900, 000 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 contract balances and upon
such branches OF railway as the committee
shall avail of through the ownership
In mortgage trusts of branch-line bonds.
The preferred stock is to be entitled To
4 per cent non-cumulative dividends. nav.
able out OF net or surplus earnings before
the payment OF any dividend on the COM
mon stock
The stock of TIE present company will
be assessed $15 per share, the holders re-
ceiving preferred stock for the amount of
their assessment and common stock equal
at par to their then present holdings.
reorganization syndicate to furnish
$10,0OO0O0, with the right on the part of
the committee and the bankers to increase
this amount to $15,0O00OO, has been or
ganized by Kuhn, Loeb & Co.. bankers.
TO purchase upon deposit of the first mort
gage bonds all defaulted coupons and in
terest assignments pertaining hitherto and
thereafter, as they mature. all coupons
and interest claims maturing during the
tendency of the plan upon such bonds. and
to adjust in cash the 2 per cent difference
between the rate of interest of old and
new bonds from the date at which the new
bonds begin to bear interest to the due
oates OF the principal of any subsequently
maturing first mortgage bonds. The syn
aicate Is also to purchase, if it shall be
Iound advisable, for the promotion of the