Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1898-01-18
CONTESTFOR RAILWAY
Seattle, Lake Shore and Eastern is the Bone
Of Contention.
CANADIAN PACIFIC WANTS THE ROAD,
Discovery of Gold In the North Makes II n
Valuable Linc-sharp Financial
Fight In Progress.

New York. Jan. 1s.-The Herald
SAYS: The contest for the control of
the Seattle, Lake Shore and Eastern
railway bonds, now in progress in
Wall street,is the sharpest fight of the
kind that has occurred in several
Years in the financial district That
neither side is confident of it's position
is made apparent by the advance in
the price OF certificates.
In two years the certificates have
remained dormant In investors homes
without income and with little or no
value beyond what the distant future
might have for them. A week ago
Saturday they sold at 40 while ycster-
day they changed hands as high as
~. although the last sale of the day
was at 6S1a.
The secret of the present value of
the certificates is found in the terms
of the reorganization of the old Sc
attic, Lake Shore and Eastern road in
1886. The road had been constructed
by the Northern Pacific through II
guaranty of its bonds. but when the
Northern Pacific became insovent its
guaranty was worthless. A receiver
ship of the Seattle road followed and
Ia the reorganization its properties
and franchises were divided up he
tween two new corporations, the Sc
little and International and the Spo-
kane and Seattle. IT was provided.
however, that should the trustees OF
the stocks and bonds of the two new
corporation wish to sell. lease or con-
solidate the roads they should first
secure the assent of sixty per cent of
the certificates representing the old
Seattle, Lake Shore and Eastern
bonds. which were deposited with the
Manhattan Trust company at the time
OF the reorganization. 1t is the GER
tifcates issued on the deposits of the
bonds which are now in demand.
In view of the discovery of gold in
Alaska and the Yukon country traffic
between Seattle and the north is cx-
pected to be large, and the Canadian
Pacific apparently recognizes the adj
vantage which would accrue to 1t
through the control of the Seattle
and International, which runs almost
straight north from Seattle to Sumas,
where 1t connects with the Canadian
Pacific. The agents of the Canadian
Pacifchave been at work quietly for
ten days or more gathering in con-
sents. but. so far as can be learned
they have not succeeded to any great
extent.
,.'here was meeting yesterday of
s'Ille vi tiit AT lilt
OF Morton s. Patton, when the terms
offered by the Canadian Pacific for the
lease We're made public. The COM
pany proposes to guarantee the inter
est on the bonds at the rate of per
cent for the irst year, 3 per cent for
the second year and 4 per cent there
after. 1t also asks that it be given
an option to buy the bonds from the
bondhnders outright at 771s. 1t is
said that those present represented
about 100000 out of the issue Of So
55t GOO.
Several very large holders OF the
certificates who have a lively recol
lection of how they Jared under pre-
vious guaranty object to the terms
and expect to organize an opposition
Ilan for the Canadian Pacific. Moore
and Schley advertised in the Sunday
papers asking that holders call on
them for consultation, and as result
they Were kept busy yesterday. To
visitors 1t was pointed out that
guaranty of a foreign corporation was
not very desirable security. The ilrm
intimated that II would be prepared
today to make a fiat cash offer for the
certificates.