The Saint Paul globe., 1896-12-14
TRUST0F CREDITORS
HOLDERS OF UNION PACIFIC Sc
CURaTIEs TO REORGAN-
IZE.
WILL SEEK FORECLOSURE
AND SALE oF COLLATERAI.s HELD
IN TRUST FOR THE COM
PANY.
THE MOVE A FRIENDLY ONE.
Creditors Working In Harmony
With the Railway Reorgani
zatton Committee.
THE MOVE A FRIENDLY oNt

NEW YORK, Dec. 13.-The Union
Pacific collateral trust note reergani-
zation committee, consisting Of John G..
Moore, James w. Alexander, of New
York city, and Edwin F. Atkins, will
issue its plan of reorganization Mon
day for the reorganization of the
Union Pacific 6 per cent collateral note
trust, and it is understood will work
in harmony with the general reorgani-
cation committee of the Union Pacific
railway.
The plan calls for deposits of the
three-year general trust coupon notes
issued by the company under its in
denture of Sept 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 col
laterals held in the trust and their
purchase by a new company to be or
ganized under the title of the Union
Pacific Securities company
The amount of notes outstanding is
stated to be So, SOC, GOO; the new, COM
paaly is to issue 5 per cent, first mort
gage, twenty-five year gold bonds to
the amount OF $10,0e0 300, which are to
be exchanged at par for notes ,depos-
tied under the plan and are to be Sc
cured by the same collateral. $780,
900 in stock is also to be issued to hold
ers Of the old notes to the extent of
90 per cent of the par value of the
nctes.
The remaining bonds, 81, ,50D, 600, are
to be held in the treasury OF the new
company to be used with the consent
of the trustee of the mortgage in the
protection of the securities held In the
collateral mortgage by joining in plans
OF reorganization, payment of assess
ments under such plans, and other
purposes connected with the business
OF the company.
The time for declaring the plan eff
fective is limited to Feb. l. 1g97.
The conditions requiring this reor-
ganiZatfoT are outlined as follows by
the secretary of the committee:
'It IS proposed to feorganize the
trust securities in harmony with the
reorganization of the Union Pacific
railway. The character of the securi-
ties is such that this method OF reor-
ganiZation Is required to best preserve
and enhance their value. The present
enterprises promoted by the Union Pa
cific Railway company are SO related
to it that the best result to both in
q harmonious reorganization.
1T is obviously to the interest Of the
note holders, as well as to that of the
holders of all fixed obligations of the
railway company, that the properties
represented in the trust should NOT
be scattered in ownership, and should
be kept together and administered for
the common advantage of the secu~
rfty holders. The committee has been
organized for this purpose.
'aThe holders of notes are called
upon to accept a 5 per cent obligation,
III lieu of an overdue s per cent obli-
cation secured upon the same coIlat-
eral. The differanee in the interest rate
and the possibilities OF increased val
ue, resulting from holding the securl-
ties togsther and administering them
as proposed by the committee are rep
resented by the stock of the new conn
pany to be issued to the asserting
ncte-holders in the proportion fixed
by the plan"
The depositaries under the plan OF
the organization are the Mercantile
Trust company, of New York, and the
American Loan and Trust company, Of
Boston, who will receive deposits un-
der the plan Monday