Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1903-05-02
Clause Is Made That Each Side
Retains SO Per Cent
N, Y. HERALD STATEMENT,
How the Interests OF Bondhoiders are
Protected In Deals Of this Sort
Bonds and stocks Issued.

Now that all the furry is over re-
garding the recent san Pedro and
Oregon Short Line deal, and the az
fairs OF life have settled back into their
ordinary grooves. facts are beginning
to come 10 the surface which were not
obtainable in the first hurrah that at
tended the announcement. The deal
was, Of course, so large a one that the
exact details are very closely guarded
but enough has peroolated through the
reserve Of the high contracting parties
TO Justify the printing OF the follow
ing:
II may be set down as certain that In
spite OF the ilgurative halos that have
been placed upon the brows OF various
people concerned the Short Line has
parted with nothing for which II did
not obtain full quid pro quo, In fact,
! p ahrewd guess might be hazarded that
Whe inside OF the Short Line books
$d be consulted Il would be found
n the part Of the system which they
I've sold has run at a steady loss Tor
flyears. II is said also that the Short
Line has parted with nothing OF us
privileges to Salt Lake city, but that
through the whole deal IL has kept some
Kind Of a strong string attached to ~
rights to the road, reaching from SAT-
Lake as far as Sandy South Of san
dy the sale has been absolute, The ter
minal rights and depot privileges VIII
be shared between the two roads under
q reciprocal arrangement subject how
ever, 70 the powerful string above re-
ferred TO.
Another query that has excited a
great deal OF comment among those Who
know how railroads are financed mas
been as to how the Short Line, which
u moftgaged under various bond issues.
could sell part OF It's system without
consulting its bondholders, and how the
rights OF those bondholders could be
protected In a sale OF this sort The
answer furnished is that the various
bondholders are represented by trus-
tee who was fully aware Of the trans
action. and that the portion OF the road
sold, Is simply handed over 20 the new
company, subject to the existing in-
debtedness upon 1t, lust as a m0rtgaged
house Is transferred from one owner to
another, the mortgage following the
property.
The talk about the amount Of actual
cash that changed hands IN the trans
action has been greatly exaggerated. II
IL said In fact, by those we'll Informed,
10 have been a comparatively SINAI,
asnount The plan followed was tie
common sense business one, OF ha; ing
the two parties, the Short Line On one
side and the San Pedro on the other,
enter into q merger and form new
rfmpany, the San Pedro putting in all
IT'S assets og the. Los Angeles end al
certain figure, the Snort Line putting In
all its assets south OF Salt Lake at am
other figuret and stock or bonds, OF
both being issued 10 the two parties at
the respective values agreed upon. The
precise figures are not obtainable, but
well founded report states that each
sides interest reached sl2,50Q,eQ0, each
owning exactly so per cent OF the new
concern. and each contributing It's quota
FOR the completion OF the road
Further light upon the subject Is shed
by q recent article in the New York
Herald which is as follows
Senator Clark's purchase OF the Ore
gon Short Line extension has necessi-
tated the complete REIMBURSEMENT of the
funded debt OF the San Pedro. Los An
geles and Salt Lake Railroad Directors
of the company have authorized a new
general mortgage bond issue OF $4,000
800 five per cent gold bonds. The date
Of maturity and other details OF the ls.
sue have not been determined About
fSb, 600. 0C0 VIII be issued ia the near fu-
ture to provide for the purchase Of the
Oregon Short Line from Salt Lake CITY