New-York tribune., 1901-10-19
NAY RETIRE ". p. PREFERRED
BELIEF THAT THIS WILL RE DONE on
JANUARY IA BASIS OF AGREE
MENT NECESSARY

The stock market is apparently hanging on
the outcome OF the Northern Pacific compuca-
tion. and reports that that complication
in a fair way OF adjustment Northern Pacific
preferred yesterday rapidly sod up 10 l0S7s. the
closing price. 100 being 1 points higher Jnan
Thursdays last figure. IN the Of ruinor
and assertion fact was found. that the pre-
ferred stock Will be retired on January l. 1902.
IL basis OF agreement between the Hill Nor
gan and Hartman interests which IS now being
sought on both sides. can meanwhile he arrived
az. Mr.. Hartman and hts associates hold
majority Of the entire stock. taking the common
and the preferred together. Mr.. Morgan and
Mr.. Hill hold a majority Of the common stock
Retirement Of the preferred stock would oh
viOusly vest the control Of the road in the bold
OF the majority Of the common stock thus
reproducing in the Northwest the situation
which existed when the Union Pacific interests
began their determined effort 70 purchase CON-
troll Of Northern Pacific. and with it an equal
vote with Great Northern in shaping the policy
OF the Burlington.
Two questions Of vital Importance have pre-
sented themselves in the discussion Of the
Northern Pacific problem. The preferred stock
certificates contain this prOvi 'on: The COM
pany shall have the right its option. and In
such manner II shall determine, TO retire the
preferred stock in whole in part par, from
time To time. upon any first day Of January
prior 10 1914" The first question arising under
this clause is TO the significance Of the word
company" There seems TO have been no ques-
tion In the minds Of the Union Pacific interests
when they were making their contest for the
Northern Pacific that If they should secure
majority of the total capital stock they would
secure control. and it is understood that they
have been advised by counsel Of eminence that
the company does. in fact, mean the share
holders
on the other hand. IL has been understood to
be the contention Of the Morgan-Hnl pa--y-a
contention supported by high legal advice-that
under the charter and bylaws the directors may
be regarded representing the company for
the performance 0f such acts retiring the
preferred stock. The present board Of directors
is generally regarded as containing a majority
Of members favorable TO the Morgan-Hil inter
ests. The further question then arises. whether
or rot assuming the Morgan-Hn contention 10
he the correct one, the directors Will proceed
10 retire the preferred stock on January |. l9f2
The answer to that question, far the in
tention Of the rival interests be ascertained,
Is that the board Will take that action its course
being acquiesced in by the Hartman party, If
as condition precedent an agreement shall he
arranged which shall safeguard the interests
OF the Union Pacific and also OF the ST. Paul and
the Chicago and Northwestern all of watch
systems now have representatives in the North
ern Pacific board; but that. II such agree
ment can be reached. the board will take no ac-
tion this time although both parties are nat
]
affairs. and are holding conferences with mat
| object in view.
IL is said that more than one solution or the
tangle has been worked out since May by the
bankers only to be rejected by the lawyers as
untenabie because in conflict with the laws OF
Northwestern States against consolidation III
( a feasible agreement can be reached there Is
good ground for believing II will probably IL
yolve the formation Of proprietary company
similar TO that wEich Mr. Hill is reported 10 De
forming 10 hold the Great Northern control the
Northern Pacific corporation to take over the
common stock of the Northern Pacific Railway
Company. issuing in exchange its own securl-
ties. to consist OF relatively small amount on
stock and a large issue OF bonds. the stock 10
be apportioned among the holders of Northern
Pacific common stock and the bonds 10 De
offered for sale TO investors IL was asserted
yesterday that The holders of the preferred
shares il common stock were Issued 70
take up the preferred stock. would he entitled
equally with the holders OF the present common
stock 10 subscribe for the issue II thal
view be correct. the Hartman kuhn- LoSo
party may hold an actual ma iority OF the stock
OF the proprietary company. There is outstahu,
ing SIo.oUuVoc Of Northern Pacine preiei'e0
stock