The herald., 1896-12-14
Agreed Upon by Union Pacific
Trustees
A FORECLOSURE AND SALE
To Be Followed by an Issue OF Trust
Notes
Note Holders Offered Five Per Cent
Obligations in Place of Six Per Cent
Securities Now Overdue.

NEW YORK, Dec. 1S.-The Union IA
cific collateral note reorganization COM
mittee. consisting of j. G. Moore, j. w.
Alexander of New York City and E. F.
Atkins of Boston. will issue it's plan of
| reorganization Monday of the reorgani-
zation of the Union Pacific six per cent
collateral note trust, and 1t is under
stood will act in harmony with the Union
Pacific railway.
The plan calls for deposits of the
three-year collateral trust coupon notes
issued by the company under its indent-
ure of September 4, 1891.
AS the notes are now two years over
due, it is proposed, in view of the in
solvency of the company, to cause an
early foreclosure and sale of the collat-
erals held by the trust and their pur-
chase by new company organized un-
der the title Of the Union Pacific securi-
ties company.
The amount of notes outstanding is
stated to be IS, 5OO 900; the new company
is to issue five per cent first mortgage
25-year gold bonds to the amount of
Sl0, ,0U0OO0, which are to be exchanged
at par for notes deposited under the
plan and are to be secured by the same
collateral. Five million dollars in stock
is also to be issued to holders of the old
notes to the extent of so per cent of the
par value of the notes.
The remaining bonds, 81. SOC, 900, are to
be held in the treasury of the new COM
pany to be used with the consent of the
trustees of the mortgage for the pro-
lection OF the securities held in the col
lateral mortgage by joining in plans of
reorganiza ton, payment of assessments
under such plans, and other purposes
connected with the business of the COM
pany.
The time for declaring the plan effec-
tive is limited to February !, 1897
The conditions requiring this reor-
ganization are outlined as follows by the
secretary of the committee:
1t is proposed to reorganize the trust
securities in harmony with the reorgani-
zation or the Union Pacific railway. The
character of the securities is such that
this method of reorganization is reuuir-
ed to best preserve and enhance the
value. The present enterprises pro-
noted by the Union Pacific Railway
company are so related to it that the
best result to both interests can only be
obtained by such harmonious reorgani-
zation. 1t is obviously to the interests
of the holder of notes as we'll as the hold
ers of the fixed obligations of the rail-
way companies, that properties repre-
tered in ownership and administratio
but should be kept together and admin
istered for the common advantage of the
security holders. The committee has
been organized Tor this purpose.
The holders of notes are called upon
to accept five per cent obligation in lieu
of an overdue six per cent obligation
secured upon the same collateral: the
difference in the interest rate and the
possibilities to increased value result
ing from holding the securities together
and administering them as proposed By
the committee are represented by the
stock of the new company to be issued to
the asserting note holders in the propo-
sition fixed by the plans.
The repositories under the plan of the
organization are the Mercantile Trust
company of New York and the Ameri-
can Loan and Trust company of Bos-
ton, who will receive deposits under the
plan made