New-York tribune., 1901-02-10
fnanrlal.
The Financial World.

Ar
go below its closing price of yesterday. ars
the week after may go lower again-or II r,.S.
do neither. IL is immateriaL The stock w.,
sell as high Burlington.
This latest prediction may be added 70 o..
many which have preceded it in this column ~
to the prices at which Union Pacific wouls sur
not one of which has failed 10 come true IT,.
have successfully been under the mark. nsva.
over it.
In previous predictions time limit was a.,
as 10 when the predicted price wouId =.
reached. because common experience is tho.
time limits nearly always wrong ona ,va,.
or the other; but in each case the priea ,.
reached in a shorter time than might reason
ably have been given; and the same rule vg,
hold good now
The full Importance of the purchase Of IN.
Southern Pacific by the Union Pacific wa,
known when made TO the few: il is becon,tn.
recognized now by the many. II not onIv uu,,
the Union Pacific in a position of Commands,
influence IN respect 70 transcontinentaI traAsc
it also averts what might in time have beeoma
an exhausting contest between important svs
TENS. The point of possible trouble was tba
situation of the Central Pacific; which road
starts, or ends-wbichever you wiIl-at Ogf1a,
For Ogden the Burlington known to ha
headed If it had gone there the Northwe,,
would have had TO follow: and the next thin,
would have been. the Union Pacific would hav.
found itself forced 70 build its own line tn sa,
Francisco This would have been heavv bur.
den. II would be a heavier burden for any com.
pany building against it.
BY the Durcha of the Southern the Union
Pacific secures the Central. thus making into
one road the two original transcOntinental lines
They were planned as one in the primary Gov
arate companies. because for those early days
the job was too big for one corporation. II
would be an easv thing for these times
Having now the original direct and low
grade line from Omaha to San Francisco. the
Union Pacific also reaches Portland by its Oregon
Short Line system, and acquires the north and
south coast line from California to Oregon
which belonged 10 the Southern Pacific: while
the main line of the latter direct between
San Francisco and New Orleans AT each end
there are ocean steamship lines. which ii also
owns. The Union Pacific is thus in a position
TO make the rates for transcontinental traffic
The conservative character of the men who
control the property is assurance TO the railroad
world that their management will be solid. and
directed 10 the maintenance of peace with sta
bility Of rates between all ether roads directly
or indirectly interested.
In respect TO the financing of the new pur-
chase ii may be said that such important
purchase as this has been made at smaller cost
to the purchaser. on it's 900 millions of stock
the Southern Pacific is earning about 81 per
cent The Union Pacific. backed by the great
est capitalists in the country, will issue its own
& per cent bonds for the amount Of Southern
Pacific stock il has bought. The bonds will be
convertible into Union Pacific stock at par. at
any time during the next five years. The bonds
thus carry a call at par on Union Pacific for the
period named Stockholders have the right TO
subscribe. The subscriptions were said 10 be at
per cent premium yesterday
As a controlling interest has been purchased,
there viii be a minority OF Southern Pacific
stock outstanding. In respect To this we have
no information. The usual course is to offer the
minority the sar1e price as was paid for the
majority. What the intent of the Union Pacific
managers may be is not disclosed officially so
far; so that we are left 70 surmise whether an
offer TO buy will be made for the minority stock
or whether il will be left outstanding. to receive
what dividends the Southern Pacific corpora
ton may declare. For it must be borne in mind
that the Southern Pacific as corporation suf-
fers no legal change by the fact that control-
ling interest in its stock has been purchased
by another company. The Union Pacific simply
takes the place held by the Huntington heirs
and Speyer & 60.
IL was said last week that this purchase
raised important questions TO the status OF
other roads having large interests west Of the
Missouri river. whether they hal Pacific Coast
connections or not The answer is that II IN
Creases the value of their securities. IL does
this by the assurance given that there VIII oe
no rate cutting fights and no rival road buiid-
ing The buying of the Atchison securltles
which has been noticeable for several days. mas
been largely by capitalists who are directly
interested in the Southern Pacific purchase
Leading men in the Atchison read say that this
settlement is equivalent To twenty points on
Atchison stock.
1t remains only to say. that growing out Oh
this purchase. other combinations are being
made. which will bring the railroad system oe-
tween Chicago and the Pacific coast into as
closely combined ownership Is row exists
among the roads between the Atlantic coast and
Chicago.
A kindred subject is the readjustment OF -
Iations In the steel trade Mr.. Carnegie, Win
100 millions of bords and 10 millions OF stoeA
To be responsibIe for. could not force his nshF
ing beyond a certain point But it would appear
that the point reached was satisfactory TO hni'
because he wanted 20 sell out and the oune.
people have bought him out. The open Ia's
system inaugurated by the trunk lines HOn
which he was not able TO bulge them deprNeu
him Of a weapon which he had used with crush-
ing effect against competitors in the past anu
recognizing this he set himself 10 making a'
uncomfortable as possible for other people III 'H'
steel trade. with the final effect of getting hl"-
self taken out of the way. IL is too carry Ses
to say what shape the new deal will take IiS'
is still under consideration. The billion doiar
GV1rrr1 81
TO be feeling thei" way in the matter; ana uillN
49,, ta,a found ~ sbarD fluctuations IN the