The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-10-24
SITUATION IN NORTHERN PACIFIC,
GREAT NoRTHERN-BURLING-
TON RAILWAY DEAL
TRY TO REACH AGREEMENT
MORGAN-HILL AND HARTMAN
KUHN-LOEB PEOPLE IN
CONFERENCE
OBSTACLES IN THE WAY
Northern Pacific stock bought By
Kuhn, Loeb & Co. Is Vow in
the Treasury of the
Union Pacific.

NEW YORK, Oct. t.23.-(special.)- )-Confer-
ences over the Northwestern railway sit
uation continued today between the Nor
gan-Hil and Harriman-Kuhn-Loeb fac
uonS. 1t was authoritatively stated that
up to the present time no action has been
taken which will end the present deadlock
of the great banking interests over the
Northern Pacific and Burlington. No
agreement has been reached, and none
seems likely to be arrived at in the i'm
mediate future, for no plan of settlement
has yet been suggested which has not
mad seemingly insurmountabIe objections
raised to it. 1t is asserted that the con-
ferences are proceeding with reasonable
harmony, and those most vitalIy concern
ed repeat that they still hope that some
equitable basis of adjustment will be
found. In the meantime, lawyers on both
sides are investigating the situation. and
pass upon each phase of the plans pro-
posed, and their opinions are very diver
gent, not only in regard to the question of
retiring the preferred shares, but on most
other points raised
Legal questions loom I'D seriously in
the discussions in unlocked for WAYS. and
would offer problems, even if the two in
terests should agree upon a basis of ad-
Justment. Northern Pacific stock. pre-
ferred and common, bought in Nav by
the Kuhn-Loeb interests, is no longer
held by them, in negotiable form, or so
that they can be readily transferred, for
retirement.
Held by Union Pacific.
1t has been definitely turned over to
the Union Pacific railway and is now car
RED IN its treasury, having been taken
up out of the proceeds of Union Pacific
convertible debenture bonds, sold to
Kuhn, Loeb & Co. All this Northern
Pacific stock, a majority of that out
standing, has been deposited with a
Wall street trust company, and to COM
plete the legal transfer to the Union
Pacific the stock has been registered in
the books of the Northern Pacific in the
name of trustees, E. H. Hartman being
one of these. With bonds issued by the
CEion Pacific, which in part have been
eerVerted into its own common shares,
the question is raised how union Pacific
could surrender the Northern Pacific
stock which it took up by the proceeds
of these securities. There are many
other questions like these, which de-
velop as the negotiations proceed. and
make them puzzling as we'll as critical.
1t was stated today, as showing how
much has been conceded on both sides al
ready, that if a division of the Burlington
railway between the two interests could
be made or would settle the dispute that
SOlQl4Op COulQ DS accepted.
The question, however, has got beyond
that point The Great Northern and the
Northern Pacific railways have issued
over $220, 100000 in bonds, a large part of
which were Issued directly TO the OLD Bur-
lington shareholders. They can be re-
deemed at a premium of > per cent. but
the financial sacrifice that would be nee
essary to carry out that plan puts it out
of the question for present consideration.
Game for Huge Stakes.
The present differences, however. rise
not only over the Burlington's control
but have been widened, and mean not
only possession of the Northern Pacific
but the supremacy of the two interests
in the far Northwest, which each has
come to regard as promising to determine
the relative Importance of rival railroad
systems
Mr.. Hill has been asked for certain
guarantees in regard to this Northwest
ern traffic, which he has not Vet been
ready to give, and this adds new COM
plication to an already serious situation.
A prominent banker, who was closely
identified with the fight over the North
ern Pacific last May, said today that It
was understood that the AIorgan-HilI fac
ton would attempt to retire the preferred
stock at par on Jan. l, but that the Har-
riman-Gould holders of the preferred
stock would refuse to turn their stock
in for cancellation.
The Harriman-Gould interests are de-
manding a larger share of stock of the
new Burlington company than the Nor
gan-Hill people are willing to give.
Morgans party said that after the
Northern Pacific preferred is called in it
will not only lose all dividends but it's
voting power. Their opponents claim to
have legal advice that the stock will not
lose its voting power until surrendered by
the holder of record