The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-02-05
LAST LINK INTO FRISCO
CESSITY TO THE UNION
PACIFIC
LINE MAY BE SEGREGATED
Leased Road From Ogden to the
Golden Gate VIII Probably Be-
come Part of the Union
Pacific.

NEW YORK, Feb. 4.-The Evening Post
today has the following:
The suggestion was made TODAY that
further study of the Southern Pacific
situation by the interests controlling the
Union Pacific might develop a plan by
which the Union Pacific will be able TO
assume absolute and permanent control
of the Central Pacific, without assuming
any liability for the whole Southern Pa
cific system. Union Pacific interests freq
ly admitted that the fundamental inter
eSts of the company in the Southern
Pacific is in its control as the natural and
only possible outlet for the Union Pacific
to San Francisco The Central Pacific
and the Union Pacific were conceived as
one route and their division into separate
companies was unnatural and harmful
to the best interests of the companies
themselves, and interfered with the
transportation facilities of the public
The two companies have often worked
in opposition in money matters, as re-
CARDS train service, rates, distribut on
and movement of tonnage. The Union
Paclfic's other lines are naturally allied
with the interests of California and the
Southwest, and form transportation
system complete and valuable in itself,
even without the direct ownership of the
Central Pacific
1t is believed that the plans of the
syndicate now holding the Southern Pa
cific for the Union Pacific for financing
the property will not be definitely formed
until TIE Central Pacific lease has been
carefully gone over to see If that prop
erty can be segregated from the other
lines under feasible conditions. The adop-
ton of the plan of issuing collateral trust
notes, as in other recent mergers, it is
not regarded as likely to be accepted I'M
til other plans have been thoroughly can
vassed. The syndicate managers have de-
cIared that control of the Central Pa
cifc will not be held in any way which
will create a burden on the Union Pa
cifc
The terms under which the Central Pa
cific is held by Southern Pacific there
fore becomes a point of special interest.
They would seem to be most definitely
fixed by the terms of the Southern Pa
cif1c, / per cent collateral trust bonds Is
sued in 1899. These are secured by de-
post of all the outstanding shares of the
Central Pacific which are owned by the
Southern Pacific. The section of this
mortgage bearing on this point says:
1.-The existing lease of the properties
of the Central Pacific railway to the
Southern Pacific company shall terminate
In case the pledged stocks shall be sold
in consequence of default hereunder.
The Southern Pacific company will not
assent to any other lease of such prop
critics unless such lease shall have been
approved by the holders of majority in
amount of bonds outstanding hereunder,
or shall contain a provision terminating
the same in case such pledged stocks
shall be Sold
This would mean to afford ample au-
thority and feasible means for the Union
Pacific assuming the Central Pacific
lease, if it should be decided to turn that
property directly over to the Union Pa
cifc.