The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-10-24
THE PHANTOM SYNDICATE.
RUSSELL SAGE AND GEN. THOMAS
TELL WHAT THEY KNOW AMOUR 1T.

That the Fake Stories OF n Now Union Pa
cino Plan OF Reorganization Have Had
Some Eject Mt washinEton-A Postponement
OF tho Sale Would he n Great Misfortune.
Tho exposure in THE SrN yesterday OF the un-
substantial. malicious, and mcretricious charac.
ter of the schome that tho World has been advo-
eating for the last week for tho formation of a
syndicate to outbid the Reorganization Commit
tee at tho sale OF the Union Pacific proper
tics early next month completed the collapse
OF the so.called Sagc-Thomas-P ulitzcr syndicate.
1t Is expressing 1t mildly to say that Wall street
was amazed that two such shrcwd and expert.
encod hnanciers as tho Hon. Russell Sage and
Gen. Samuel Thomas had been inveigled, no mat
ter what their motives of profit or retalia-
ton may have been, into countenancing
a stock.jobbing operation which, though 1t may
not have originated in the World office, was
promptly taken up and actively promoted by
Pulitzer. AS appears from a formal state.
mcnt from Mr.. Sage, printed below, he has
seized the opportunity afforded by THE SUNS
exposure to diSclnim any responsibility
for the uso of his name by tho World
in connection with tho formation of n
now Union Pacific reorganization syndicate.
Tho mistake that Mr.. Sage made, il he
had no intention OF participating In q
movement TO outbid the Union Pacific Rcorgan-
ization Committee. was in permitting an editor
of tho Worid or any employee OF Pulitzer to be
brought into his office by an adventurer. whom
he knew by experience to be such, and also to bc
absolutely Enthusiastically.
Gen. Thomas seeks to cxtricato himself from
the predicament in which he allowed himself to
be placed by taking up the subject seriously
with the man who represented himself
as an cmissary from Mr.. Sage by
ayprrinp that hn be1icrnJ Tint Inp,nr who n
NV appears originated the scheme, was author
lied to represent Mr.. Sage in negotiations for
tho creation of n purchasing syndicate.
Enough has been learned TO warrant the
stat ment that Lamar's stock in trade
was similar TO that which he relied upon In his
preposterous and futile effort to bring about
an alliance Of some sort between the Man.
haitian Railway and the Metropolitan Trnc-
ton companies, namely, positive state
mcnts to various people that he represented
certain other people. 1t was learned yesterday
that before approaching the u'OrLd with his
scheme for attacking the Union Pacific re-
organization Lamar underworld to get another
but with only indifferent success.
1t was also learned yesterday that although
the bubble has been prickcd. as far as Wall
street Is concerned. the suggestions advanced
by the World and its tentative associates have
been presented to the authorities at Wash
ington through several channels and by n
number OF persons to an extent that has
'fs'hNAN '''i'S = vi NhV Iu'S
ton whether e. higher price than the minimum
bid guaranteed bv tho reorganization syndicate
might not he obtained II the sale of the proper
ties was postponed. Representations of this
character have doubtless been made by those
believe that Mr.. sage and Gen. Thomes were
forming q new syndicate. and that the, first
last named $1,000 900. However that may bean
Impression that an extension OF time might be
beneficial to the Government has been created
In official circles by the now unsayory develop.
inents In Wall street and in yellow journalism
during the last week.
1t may be stated without fear of contradic-
ton That tho, creation OF that impression. es-
gecisl!y should IL prove to be LASTING or in
ernmcnt. is a distinct menace to the pros,
pority of the country. The Union Pacific
upon rySSss a soIVent basis sSha the only T"T informant i"plTsn TO Tai RI,nsSi
the holders OF its securities. Every one OF those
holders; and their name is legion, is in
terested in the success of the plan. The
entire transportation industry OF the country
Utilization of the Union Pacific Company and the
restoration. of its management to those whose
ment might not suffer through n foreclosure
OF the first mortgage upon the property, the
reorganization Committee arranged with the
previous ADMINISTRATION to bid an amount for
the property that would satisfy the claims OF
the first mortgage bondholders, the entire prin.
cipnl of the Governments second mortgage lien,
and a large percentage Of the arrears OF
interest, upon that, Indebtedness. This, ii
bid. The sale is open TO any purchaser, and Mr..
Sage and Gen. Thomas. who have grown gray
s srties. rich and in p %ininiSg'"'i MSo. r"ilrG @srcd nTSp
instinct Is his most highly developed
CHARACTERISTIC, have, been familiar with
the situation from the start. and since the
minimum bid was guaran' eed to the Govern,
ment last winter hive had fully as much time as
the ReorganiZatiOn to raise what
ever funds might be necessary TO outbid 1t at the
foreclosure SALE.
The present administration has been success
fnl in raising the minimum bid guaranteed by
the Reorganization Syndicate $1,000, 600
After doing SO it ac9piesced in tho decree
faith on. the, part of the Government
o reccde from tho position it has taken. by
Reorganization syndicate. which assures it The
principR o the Indebtedness to the Government
and liar c proportion of the arroars Of
would act in good faith, ana undoubtedly
der as'Hs sB B5Se'rss5 5000 'S 6S !o6o fo M'' the any Go %!HnT S'ai
claim, the Reorganization Committee has moi
only secured pledges from bankers and individ,
uals in this country and Europe for the amount
required to carry ont It's plan, but has actually
collected a large percentage OF the money and has
tho holders OF Union Pacific stock, to be used In
rehabilltstipg the property. both financially
have received practically all Of the Unior
Pacific first mortgage bonds, and the SO
SSu u1 Of the various allied lines, The
c~urities under the plan OF reorganization In lieI
Of cash, thus facilitating the operation anc
CURED TO settle with tho various classes o
ere iitors.
The Reorganization Committee has alsc
planned and in some cases virtually consum
mated traffic arrangements and alliances witt
connecting lines which are calculated t.
conserve and increase the revenues OF Tia,
reorganizcd property. The reorganization. i
completed upon The lines laid down, will be 0
inostimable value to all OF the transcontin ntn
railroads, The authorities at Washington ar,
unquestionahly aware OF all these facts, an,
doubtless appreciate the shadow that woul,
be cast upon the business OF the country
and particularly upon the transportation In
dustry, should this comprehensive programm,
be deranged.
Mr.. Russell Sage gave out yesterday the fol
lowing statement: There have been SO man
stories published within the last few days AM
misstatcmcnts circulated relative to my conneC
ton with II pretended syndicate formed 4
bid for the Union Pacific Railrond, an,
| have in consequence found myself and man,
before the public, that l feel compelled to max,
a plain statement of the facts in the case.
"Some two weeks ago u man well known ii
Wall street called on me and asked il | woul
subscribe 10 a syndicate TO bid for the UnioI
up. replied that II a proper syndI
cate was arranged by responsible partic
would be willing to consider 1t.
fcw days later he came again, ~accompanie,
nv n man whom he introduced ma One ~ m.