The San Francisco call., 1897-01-24
PROPOSED RkORGANIzArION.

as a genuine surprise to the majority Of
the officials.
PROPOSED RGANIzATION.
Russell Sage Says the Stockholders WtH
BE the Chief Sufferers.
NEW YORK, \. Y, Jan. 23- Scarcely
second in public Importance to the fact
that the Government will shortly fore
close on the lien of the Union Pacific
line is the prospect of the reorganization
of the company. In no other company
have so many citizens of the United
States been interested as the bond and
stock holders, and the widest concern is
being shown in the plans of those having
large interests in the company and at
once looked upon as leaders in any move
ment to put the system upon its feet.
There are two views in Wall street as to
the proper course to pursue and the time
which will be required for reorganization
The leading interests are at odds. One
plan is now before the people which pro-
poses a reorganization which shall cut off
many branch lines and junior securities
aud assess stockholders $15 per share.
By many holders of securities it is hoped
better plans will be accorded them. The
mortgage and preferred-security
holders are in accord with the present
plan.
Some of the leading capitalists and in
stitutions are opposed TO the present plan
and hope to see a modified plan. 1t was
suggested to-day that an effort might
possibly be made, perhaps by Congress, to
prevent the foreclosure sale ordered by
the President, but how such objection
could be made is not explained.
1t is expected the syndicate will bid not
less than $45 554, 600 Tor the Governments
lien and mortgage on the Union Pacific
and Kansas Pacific line and the sinking
fund. II is understood the syndicate will
be forced 10 pay out the sum mentioned
for the sinking fund, and other credits
secured will reduce the actual cash needed
to about $28 ,OOO 900. The sum required
has been secured by the Kuhn, Loeb &
Co. syndicate, which favors the plan OF
the Fitzg raid committee.
The views of the older interests in the
Union Pacific system, which include
several capitalists and trust companies,
on the present situation were stated to-
day by Russell Sage, who has followed
the Union Pacific from its conception:
UNLESS the Government is interested
in the Union Pacific, which it may be,
predict the road will in the end never pay
any return to those who advance the
money TO pay the Government lien. This
is q decided statement, but 1t will be
proven true by time. The com petition
will ruin the road unless Congress can
stand by to aid, as for instance in uphold
ing a 10000 mile law. for the Northwestern
system can tap every station on the north
and the Burlington system every station
on the south side OF the Union Pacific
leaving it only a narrow strip of poor
country to live upon.
Zone fact should not be lost sight OF,
and that is that thousands upon thousands
OF people have invested their savings in
the junior securities of the system, in
the $50, 100000 OF stock because the Gov
eminent was interested with them and
would protect the property. They put it
in the com pany as others put money in
the savings banks. They will lose all
they have and Whatever they might pay
in TO save it if the Government is COM
pleteIy disinterested,
NOW this quest ton is not settled and is
going over to the next administration.
We nave had assurances from the highest
officials that the Government would con-
tinue its protection, and unless it does do
so the company may not be reorganized
for years. With the Government IN it an
assessment OF $40 per share would be suf-
fcient and the savings of tens of thou
sands OF people would be protected.
The Government directors of the COM
pany met at 1 o'clock this afternoon.
L. Ellery Anderson said that the meeting
was hardly more than form. Nothing
stood in the way OF foreclosure, he added,
as Congress could not take any action
contrary to the law OF 1873.